This document includes House Committee Amendments incorporated into the bill on Wed, Feb 28, 2018 at 1:44 PM by bbryner.
This document includes House Floor Amendments incorporated into the bill on Fri, Mar 2, 2018 at 4:07 PM by lerror.
This document includes Senate 2nd and 3rd Reading Floor Amendments incorporated into the bill on Thu, Mar 8, 2018 at 3:43 PM by estauffer.
Representative Francis D. Gibson proposes the following substitute bill:


1     
FEDERAL GRANTS MANAGEMENT AMENDMENTS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Francis D. Gibson

5     
Senate Sponsor: Evan J. Vickers

6     

7     LONG TITLE
8     General Description:
9          This bill makes changes relating to the review and approval of certain
10     intergovernmental transfer programs under the Federal Funds Procedures Act.
11     Highlighted Provisions:
12          This bill:
13          ▸     amends definitions;
14          ▸     specifies that restrictions on certain hospitals and nursing care facilities only apply
15     to certain cities or towns;
16          ▸     amends the federal funds requests that are subject to the review and approval
17     procedures under the Federal Funds Procedures Act; Ĥ→ and
18      [     ▸     amends provisions related to the Medicaid Growth Reduction and Stablization
19     Account; and] ←Ĥ
20          ▸     makes technical changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          This bill provides a special effective date.
25     Utah Code Sections Affected:
26     AMENDS:
27          10-8-90, as last amended by Laws of Utah 2017, Chapter 247
28          26-18-21, as enacted by Laws of Utah 2017, Chapter 247
29     Ĥ→ [     63J-1-315, as last amended by Laws of Utah 2016, Chapter 183] ←Ĥ
30          63J-5-102, as last amended by Laws of Utah 2017, Chapter 247
31          63J-5-206, as enacted by Laws of Utah 2017, Chapter 247
32     

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 10-8-90 is amended to read:
35          10-8-90. Ownership and operation of hospitals.
36          (1) Each city of the third, fourth, or fifth class and each town of the state is authorized
37     to construct, own, and operate hospitals and to join with other cities, towns, and counties in the
38     construction, ownership, and operation of hospitals.
39          (2) (a) Beginning July 1, 2017, a hospital under Subsection (1) that owns a nursing care
40     facility regulated under Title 26, Chapter 21, Health Care Facility Licensing and Inspection
41     Act, and uses an intergovernmental transfer as that term is defined in Section 26-18-21 may not
42     enter into a new agreement or arrangement to operate a nursing care facility in another city,
43     town, or county without first entering into an agreement under Title 11, Chapter 13, Interlocal
44     Cooperation Act, or other contract with the other city, town, or county to operate the nursing
45     care facility.
46          (b) Subsection (2)(a) only applies to a city or town described in Subsection (1).
47          Section 2. Section 26-18-21 is amended to read:
48          26-18-21. Medicaid intergovernmental transfer report -- Approval requirements.
49          (1) As used in this section:
50          (a) (i) "Intergovernmental transfer" means the transfer of public funds from:
51          (A) a local government entity to another nonfederal governmental entity; or
52          (B) from a nonfederal, government owned health care facility regulated under Chapter
53     21, Health Care Facility Licensing and Inspection Act, to another nonfederal governmental
54     entity.
55          (ii) "Intergovernmental transfer" does not include:
56          (A) the transfer of public funds from one state agency to another state agency[.]; or
57          (B) a transfer of funds from the University of Utah Hospitals and Clinics.
58          (b) (i) "Intergovernmental transfer program" means a federally approved
59     reimbursement program or category that is authorized by the Medicaid state plan or waiver
60     authority for intergovernmental transfers.
61          (ii) "Intergovernmental transfer program" does not include the addition of a provider to
62     an existing intergovernmental transfer program.
63          (c) "Local government entity" means a county, city, town, special service district, local
64     district, or local education agency as that term is defined in Section 63J-5-102.
65          (d) "Non-state government entity" means a hospital authority, hospital district, health
66     care district, special services district, county, or city.
67          (2) (a) An entity that receives federal Medicaid dollars from the department as a result
68     of an intergovernmental transfer shall, on or before August 1, 2017, and on or before August 1
69     each year thereafter, provide the department with:
70          (i) information regarding the payments funded with the intergovernmental transfer as
71     authorized by and consistent with state and federal law;
72          (ii) [the entity's analysis of] information regarding the entity's ability to repay federal
73     funds, to the extent required by the department in the contract for the intergovernmental
74     transfer[, if there is a federal disallowance of the intergovernmental transfer]; and
75          (iii) other information reasonably related to the intergovernmental transfer that may be
76     required by the department in the contract for the intergovernmental transfer.
77          (b) On or before October 15, 2017, and on or before October 15 each subsequent year
78     [thereafter], the department shall prepare a report for the Executive Appropriations Committee
79     that includes:
80          (i) the amount of each intergovernmental transfer under Subsection (2)(a);
81          [(ii) the department's analysis of the risk of a federal disallowance for the state; and]
82          (ii) a summary of changes to the Centers for Medicare and Medicaid Services
83     regulations and practices that are known by the department regarding federal funds related to
84     an intergovernmental transfer program; and
85          (iii) other information the department gathers about the intergovernmental transfer
86     under Subsection (2)(a).
87          (3) The department shall not create a new intergovernmental transfer program after
88     July 1, 2017, unless the department reports to the Executive Appropriations Committee, in
89     accordance with Section 63J-5-206, before submitting the new intergovernmental transfer
90     program for federal approval. The report shall include information required by Subsection
91     63J-5-102(1)(d) and the analysis required in Subsections (2)(a) and (b).
92          (4) (a) The department shall enter into new Nursing Care Facility Non-State
93     Government-Owned Upper Payment Limit program contracts and contract amendments adding
94     new nursing care facilities and new non-state government entity operators in accordance with
95     this Subsection (4).
96          (b) (i) If the nursing care facility expects to receive less than $1,000,000 in federal
97     funds each year from the Nursing Care Facility Non-State Government-Owned Upper Payment
98     Limit program, excluding seed funding and administrative fees paid by the non-state
99     government entity, the department shall enter into a Nursing Care Facility Non-State
100     Government-Owned Upper Payment Limit program contract with the non-state government
101     entity operator of the nursing care facility.
102          (ii) If the nursing care facility expects to receive between $1,000,000 and $10,000,000
103     in federal funds each year from the Nursing Care Facility Non-State Government-Owned
104     Upper Payment Limit program, excluding seed funding and administrative fees paid by the
105     non-state government entity, the department shall enter into a Nursing Care Facility Non-State
106     Government-Owned Upper Payment Limit program contract with the non-state government
107     entity operator of the nursing care facility after receiving the approval of the Executive
108     Appropriations Committee.
109          (iii) If the nursing care facility expects to receive more than $10,000,000 in federal
110     funds each year from the Nursing Care Facility Non-State Government-Owned Upper Payment
111     Limit program, excluding seed funding and administrative fees paid by the non-state
112     government entity, the department may not approve the application without obtaining approval
113     from the Legislature and the governor.
114          (c) A non-state government entity may not participate in the Nursing Care Facility
115     Non-State Government-Owned Upper Payment Limit program unless the non-state government
116     entity is a special service district, county, or city that operates a hospital or holds a license
117     under Chapter 21, Health Care Facility Licensing and Inspection Act.
118          (d) Each non-state government entity that participates in the Nursing Care Facility
119     Non-State Government-Owned Upper Payment Limit program shall certify to the department
120     that:
121          (i) the non-state government entity is a local government entity that is able to make an
122     intergovernmental transfer under applicable state and federal law;
123          (ii) the non-state government entity has sufficient public funds or other permissible
124     sources of seed funding that comply with the requirements in 42 C.F.R. Part 433, Subpart B;
125          (iii) the funds received from the Nursing Care Facility Non-State Government-Owned
126     Upper Payment Limit program are:
127          (A) for each nursing care facility, available for patient care until the end of the
128     non-state government entity's fiscal year; and
129          (B) used exclusively for operating expenses for nursing care facility operations, patient
130     care, capital expenses, rent, royalties, and other operating expenses; and
131          (iv) the non-state government entity has completed all licensing, enrollment, and other
132     forms and documents required by federal and state law to register a change of ownership with
133     the department and with the Centers for Medicare and Medicaid Services.
134          (5) The department shall add a nursing care facility to an existing Nursing Care Facility
135     Non-State Government-Owned Upper Payment Limit program contract if:
136          (a) the nursing care facility is managed by or affiliated with the same non-state
137     government entity that also manages one or more nursing care facilities that are included in an
138     existing Nursing Care Facility Non-State Government-Owned Upper Payment Limit program
139     contract; and
140          (b) the non-state government entity makes the certification described in Subsection
141     (4)(d)(ii).
142          (6) The department may not increase the percentage of the administrative fee paid by a
143     non-state government entity to the department under the Nursing Care Facility Non-State
144     Government-Owned Upper Payment Limit program.
145          (7) The department may not condition participation in the Nursing Care Facility
146     Non-State Government-Owned Upper Payment Limit program on:
147          (a) a requirement that the department be allowed to direct or determine the types of
148     patients that a non-state government entity will treat or the course of treatment for a patient in a
149     non-state government nursing care facility; or
150          (b) a requirement that a non-state government entity or nursing care facility post a
151     bond, purchase insurance, or create a reserve account of any kind.
152          (8) The Ĥ→ [department may not audit a] ←Ĥ non-state Ĥ→ [governmental entity's]
152a      government entity shall have the primary responsibility for ensuring ←Ĥ compliance with
153     Subsection (4)(d)(ii).
154          (9) (a) The department may not enter into a new Nursing Care Facility Non-State
155     Government-Owned Upper Payment Limit program contract before January 1, 2019.
156          (b) Subsection (9)(a) does not apply to Ŝ→ : ←Ŝ
156a     Ŝ→ (i) ←Ŝ a new Nursing Care Facility Non-State
157     Government-Owned Upper Payment Limit program contract that was included in the federal
158     funds request summary under Section 63J-5-201 for fiscal year 2018 Ŝ→ [.] ; or ←Ŝ
158a     Ŝ→ (ii) a nursing care facility that is operated or managed by the same company as a nursing
158b     care facility that was included in the federal funds request summary under Section 63J-5-201
158c     for fiscal year 2018. ←Ŝ
159          Ĥ→ [Section 3. Section 63J-1-315 is amended to read:
160          63J-1-315. Medicaid Growth Reduction and Budget Stabilization Account --
161     Transfers of Medicaid growth savings -- Base budget adjustments.
162          (1) As used in this section:
163          (a) "Department" means the Department of Health created in Section 26-1-4.
164          (b) "Division" means the Division of Health Care Financing created within the
165     department under Section 26-18-2.1.
166          (c) "General Fund revenue surplus" means a situation where actual General Fund
167     revenues collected in a completed fiscal year exceed the estimated revenues for the General
168     Fund for that fiscal year that were adopted by the Executive Appropriations Committee of the
169     Legislature.
170          (d) "Medicaid growth savings" means the Medicaid growth target minus Medicaid
171     program expenditures, if Medicaid program expenditures are less than the Medicaid growth
172     target.
173          (e) "Medicaid growth target" means Medicaid program expenditures for the previous
174     year multiplied by 1.08.
175          (f) "Medicaid program" is as defined in Section 26-18-2.
176          (g) "Medicaid program expenditures" means total state revenue expended for the
177     Medicaid program from the General Fund, including restricted accounts within the General
178     Fund, during a fiscal year.
179          (h) "Medicaid program expenditures for the previous year" means total state revenue
180     expended for the Medicaid program from the General Fund, including restricted accounts] ←Ĥ
181     Ĥ→ [within the General Fund, during the fiscal year immediately preceding a fiscal year for which
182     Medicaid program expenditures are calculated.
183          (i) "Operating deficit" means that, at the end of the fiscal year, the unassigned fund
184     balance in the General Fund is less than zero.
185          (j) "State revenue" means revenue other than federal revenue.
186          (k) "State revenue expended for the Medicaid program" includes money transferred or
187     appropriated to the Medicaid Growth Reduction and Budget Stabilization Account only to the
188     extent the money is appropriated for the Medicaid program by the Legislature.
189          (2) There is created within the General Fund a restricted account to be known as the
190     Medicaid Growth Reduction and Budget Stabilization Account.
191          (3) (a) (i) Except as provided in Subsection (6), if, at the end of a fiscal year, there is a
192     General Fund revenue surplus, the Division of Finance shall transfer an amount equal to
193     Medicaid growth savings from the General Fund to the Medicaid Growth Reduction and
194     Budget Stabilization Account.
195          (ii) If the amount transferred is reduced to prevent an operating deficit, as provided in
196     Subsection (6), the Legislature shall include, to the extent revenue is available, an amount
197     equal to the reduction as an appropriation from the General Fund to the account in the base
198     budget for the second fiscal year following the fiscal year for which the reduction was made.
199          (b) If, at the end of a fiscal year, there is not a General Fund revenue surplus, the
200     Legislature shall include, to the extent revenue is available, an amount equal to Medicaid
201     growth savings as an appropriation from the General Fund to the account in the base budget for
202     the second fiscal year following the fiscal year for which the reduction was made.
203          (c) Subsections (3)(a) and (3)(b) apply only to the fiscal year in which the department
204     implements the proposal developed under Section 26-18-405 to reduce the long-term growth in
205     state expenditures for the Medicaid program, and to each fiscal year after that year.
206          (4) The Division of Finance shall calculate the amount to be transferred under
207     Subsection (3):
208          (a) before transferring revenue from the General Fund revenue surplus to:
209          (i) the General Fund Budget Reserve Account under Section 63J-1-312;
210          (ii) the Wildland Fire Suppression Fund created in Section 65A-8-204, as described in
211     Section 63J-1-314; and] ←Ĥ
212     Ĥ→ [     (iii) the State Disaster Recovery Restricted Account under Section 63J-1-314;
213          (b) before earmarking revenue from the General Fund revenue surplus to the Industrial
214     Assistance Account under Section 63N-3-106; and
215          (c) before making any other year-end contingency appropriations, year-end set-asides,
216     or other year-end transfers required by law.
217          (5) (a) If, at the close of any fiscal year, there appears to be insufficient money to pay
218     additional debt service for any bonded debt authorized by the Legislature, the Division of
219     Finance may hold back from any General Fund revenue surplus money sufficient to pay the
220     additional debt service requirements resulting from issuance of bonded debt that was
221     authorized by the Legislature.
222          (b) The Division of Finance may not spend the hold back amount for debt service
223     under Subsection (5)(a) unless and until it is appropriated by the Legislature.
224          (c) If, after calculating the amount for transfer under Subsection (3), the remaining
225     General Fund revenue surplus is insufficient to cover the hold back for debt service required by
226     Subsection (5)(a), the Division of Finance shall reduce the transfer to the Medicaid Growth
227     Reduction and Budget Stabilization Account by the amount necessary to cover the debt service
228     hold back.
229          (d) Notwithstanding Subsections (3) and (4), the Division of Finance shall hold back
230     the General Fund balance for debt service authorized by this Subsection (5) before making any
231     transfers to the Medicaid Growth Reduction and Budget Stabilization Account or any other
232     designation or allocation of General Fund revenue surplus.
233          (6) Notwithstanding Subsections (3) and (4), if, at the end of a fiscal year, the Division
234     of Finance determines that an operating deficit exists and that holding back earmarks to the
235     Industrial Assistance Account under Section 63N-3-106, transfers to the Wildland Fire
236     Suppression Fund and State Disaster Recovery Restricted Account under Section 63J-1-314,
237     transfers to the General Fund Budget Reserve Account under Section 63J-1-312, or earmarks
238     and transfers to more than one of those accounts, in that order, does not eliminate the operating
239     deficit, the Division of Finance may reduce the transfer to the Medicaid Growth Reduction and
240     Budget Stabilization Account by the amount necessary to eliminate the operating deficit.
241          (7) The Legislature may appropriate money from the Medicaid Growth Reduction and
242     Budget Stabilization Account only:] ←Ĥ
243     Ĥ→ [     (a) if Medicaid program expenditures for the fiscal year for which the appropriation is
244     made are estimated to be 108% or more of Medicaid program expenditures for the previous
245     year; [and]
246          (b) for the Medicaid program[.]; and
247          (c) if non-state government entities are unable to repay federal funds relating to the
248     Nursing Care Facility Non-State Government-Owned Upper Payment Limit program.
249          (8) The Division of Finance shall deposit interest or other earnings derived from
250     investment of Medicaid Growth Reduction and Budget Stabilization Account money into the
251     General Fund.] ←Ĥ
252          Section Ĥ→ [4] 3 ←Ĥ . Section 63J-5-102 is amended to read:
253          63J-5-102. Definitions.
254          (1) As used in this chapter:
255          (a) (i) "Agency" means a department, division, committee, commission, council, court,
256     or other administrative subunit of the state.
257          (ii) "Agency" includes:
258          (A) executive branch entities;
259          (B) judicial branch entities; and
260          (C) the State Board of Education.
261          (iii) "Agency" does not mean higher education institutions or political subdivisions.
262          (b) (i) "Federal funds" means cash or other money received from the United States
263     government or from other individuals or entities for or on behalf of the United States and
264     deposited with the state treasurer or any agency of the state.
265          (ii) "Federal funds" includes federal assistance and federal assistance programs,
266     however described.
267          (iii) "Federal funds" does not include money received from the United States
268     government to reimburse the state or local government entity for money expended by the state
269     or local government entity.
270          (c) "Federal funds reauthorization" means:
271          (i) the formal submission from an agency to the federal government applying for or
272     seeking reauthorization of federal funds which the state is currently receiving;
273          (ii) the formal submission from an agency to the federal government applying for or
274     seeking reauthorization to participate in a federal program in which the state is currently
275     participating that will result in federal funds being transferred to an agency; or
276          (iii) that period after the first year of a previously authorized and awarded grant or
277     funding award, during which federal funds are disbursed or are scheduled to be disbursed after
278     the first year because the term of the grant or financial award extends for more than one year.
279          (d) (i) "Federal funds request summary" means a document detailing:
280          (A) the amount of money that is being requested or is available to be received by the
281     state from the federal government for each federal funds reauthorization or new federal funds
282     request;
283          (B) those federal funds reauthorizations and new federal funds requests that are
284     included as part of the agency's proposed budget for the fiscal year, and the amount of those
285     requests;
286          (C) the amount of new state money, if any, that will be required to receive the federal
287     funds or participate in the federal program;
288          (D) the number of additional permanent full-time employees, additional permanent
289     part-time employees, or combination of additional permanent full-time employees and
290     additional permanent part-time employees, if any, that the state estimates are needed in order to
291     receive the federal funds or participate in the federal program; and
292          (E) any requirements that the state must meet as a condition for receiving the federal
293     funds or participating in the federal program.
294          (ii) "Federal funds request summary" includes, if available:
295          (A) the letter awarding an agency a grant of federal funds or other official
296     documentation awarding an agency a grant of federal funds; and
297          (B) a document detailing federal maintenance of effort requirements.
298          (e) "Federal maintenance of effort requirements" means any matching, level of effort,
299     or earmarking requirements, as defined in Office of Management and Budget requirements,
300     that are imposed on an agency as a condition of receiving federal funds.
301          (f) (i) "Intergovernmental transfer program" means an existing reimbursement program
302     or category that is authorized by the Medicaid state plan or waiver authority for
303     intergovernmental transfers.
304          (ii) "Intergovernmental transfer program" does not include the addition of a provider to
305     an existing intergovernmental transfer program.
306          [(f)] (g) "Local education agency" or "LEA" means:
307          (i) a school district;
308          (ii) a charter school; or
309          (iii) the Utah Schools for the Deaf and the Blind.
310          [(g)] (h) "New federal funds" means:
311          (i) federal assistance or other federal funds that are available from the federal
312     government that:
313          (A) the state is not currently receiving; or
314          (B) exceed the federal funds amount most recently approved by the Legislature by
315     more than 25% for a federal grant or program in which the state is currently participating;
316          (ii) a federal assistance program or other federal program in which the state is not
317     currently participating; or
318          (iii) a one-time TANF request.
319          [(h)] (i) "New federal funds request" means:
320          (i) the formal submission from an agency to the federal government:
321          (A) applying for or otherwise seeking to obtain new federal funds; or
322          (B) applying for or seeking to participate in a new federal program that will result in
323     federal funds being transferred to an agency; or
324          (ii) a one-time TANF request.
325          [(i)] (j) (i) "New state money" means money, whether specifically appropriated by the
326     Legislature or not, that the federal government requires Utah to expend as a condition for
327     receiving the federal funds or participating in the federal program.
328          (ii) "New state money" includes money expended to meet federal maintenance of effort
329     requirements.
330          [(j)] (k) "One-time TANF request" means a proposed expenditure by the Department of
331     Workforce Services from its reserves of federal Temporary Assistance for Needy Families
332     funds:
333          (i) for a project or program that will last for a fixed amount of time and is not an
334     ongoing project or program of the Department of Workforce Services; and
335          (ii) that is greater than $1,000,000 over the amount most recently approved by the
336     Legislature.
337          [(k)] (l) (i) "Pass-through federal funds" means federal funds provided to an agency
338     that are distributed to local governments or private entities without being used by the agency.
339          (ii) "Pass-through federal funds" does not include federal funds provided to the State
340     Board of Education that are distributed to a local education agency or other subrecipient
341     without being used by the State Board of Education.
342          [(l)] (m) "State" means the state of Utah and all of its agencies, and any administrative
343     subunits of those agencies.
344          (2) When this chapter describes an employee as a "permanent full-time employee" or a
345     "permanent part-time employee," it is not intended to, and may not be construed to, affect the
346     employee's status as an at-will employee.
347          Section Ĥ→ [5] 4 ←Ĥ . Section 63J-5-206 is amended to read:
348          63J-5-206. Intergovernmental transfers for Medicaid.
349          (1) Subject to Subsections (2) and (3), an intergovernmental transfer program under
350     Section 26-18-21 is subject to the same review provisions as a federal funds request under this
351     chapter.
352          (2) Notwithstanding Subsection (1), if [an] a new intergovernmental transfer program
353     created under Subsection 26-18-21(3) will result in the state receiving total payments of
354     [$1,000,000] $10,000,000 or more per year from the federal government, the intergovernmental
355     transfer program is subject to the same review provisions as a high impact federal funds request
356     in Subsections 63J-5-204(3), (4), and (5).
357          (3) (a) Beginning on July 1, 2017, an intergovernmental transfer program created
358     before July 1, 2017, is subject to the federal funds review process of Section 63J-5-201 for
359     periods after July 1, 2017.
360          (b) The addition of a new participant into an existing intergovernmental transfer
361     program, or the addition by the department of a nursing care facility or a non-state government
362     entity to the Nursing Care Facility Non-State Government-Owned Upper Payment Limit
363     program, is not subject to the requirements of this section.
364          Section Ĥ→ [6] 5 ←Ĥ . Effective date.
365          If approved by two-thirds of all the members elected to each house, this bill takes effect
366     upon approval by the governor, or the day following the constitutional time limit of Utah
367     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
368     the date of veto override.