Bill Text: CA AB1469 | 2011-2012 | Regular Session | Amended
Bill Title: Public health: Medi-Cal: skilled nursing facility and
Spectrum: Partisan Bill (Democrat 15-0)
Status: (Engrossed - Dead) 2012-08-23 - Read second time. Ordered to third reading. Re-referred to Com. on RLS. pursuant to Senate Rule 29.10. [AB1469 Detail]
Download: California-2011-AB1469-Amended.html
BILL NUMBER: AB 1469 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 22, 2012
AMENDED IN SENATE AUGUST 21, 2012
AMENDED IN SENATE JUNE 25, 2012
INTRODUCED BY Committee on Budget (Blumenfield (Chair), Alejo,
Bonilla, Brownley, Buchanan, Butler, Cedillo, Chesbro, Dickinson,
Feuer, Gordon, Huffman, Mitchell, Monning, and Swanson)
JANUARY 10, 2012
An act to amend Sections 1324.23, 1324.27, 1324.29, and 1324.30 of
the Health and Safety Code, to amend Sections 12009, 12201, 12204,
12207, 12242, 12251, 12253, 12254, 12257, 12258, 12260, 12301, 12302,
12303, 12304, 12305, 12307, 12412, 12413, 12421, 12422, 12423,
12427, 12428, 12429, 12431, 12433, 12434, 12491, 12493, 12494, 12601,
12602, 12631, 12632, 12636, 12636.5, 12679, 12681, 12801, 12951,
12977, 12983, 12984, and 13108 of, and to add Section 12201.5 to, the
Revenue and Taxation Code, to amend Sections 14126.022, 14126.027,
14126.033, 14126.036, and 14301.11 of, and to add Section 14126.028
to, the Welfare and Institutions Code, and to repeal Section 92 of
Chapter 11 of the First Extraordinary Session of the Statutes of
2011, relating to public health, making an appropriation therefor,
and declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1469, as amended, Committee on Budget. Public health: Medi-Cal:
skilled nursing facility and managed care plan charges.
(1) 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 requires the department to impose a uniform quality
assurance fee on each skilled nursing facility, with certain
exceptions, in accordance with a prescribed formula. The formula is
based on the determination of the projected net revenues, as defined,
of skilled nursing facilities. Under existing law, the charge will
cease to be assessed after July 31, 2013, and these provisions will
be repealed on January 1, 2014. Existing law, the Medi-Cal Long-Term
Care Reimbursement Act, requires the department to implement a
facility-specific reimbursement ratesetting system for certain
skilled nursing facilities. Reimbursement rates for freestanding
skilled nursing facilities are funded by a combination of federal
funds and moneys collected pursuant to the skilled nursing uniform
quality assurance fee. Existing law also establishes the Skilled
Nursing Facility Quality and Accountability Special Fund in the State
Treasury, which is a continuously appropriated fund that contains
moneys from the assessment of specified administrative penalties and
set asides of General Fund moneys, for the purposes of making quality
and accountability payments. Existing law provides that this rate
methodology shall cease to be implemented after July 31, 2013, and
that these provisions shall be repealed on January 1, 2014.
This bill would modify the calculation of rates under the
above-referenced rate methodology, and would extend the assessment of
the charge, implementation of the rate methodology, and
implementation of related provisions until July 31, 2015. By
extending the period of time during which transfers are made to the
Skilled Nursing Facility Quality and Accountability Special Fund,
this bill would make an appropriation. This bill would also modify
the amount of moneys to be deposited into the Skilled Nursing
Facility Quality and Accountability Special Fund, by, among other
things, requiring that specified set-asides under the rate
methodology remain in the General Fund instead of transferring to the
Skilled Nursing Facility Quality and Accountability Special Fund and
increasing the amount of certain set-asides to be transferred to the
fund. This bill would instead require that the quality and
accountability payments be made beginning with the 2013-14 rate year.
(2) Existing federal Medicaid law requires nursing facilities, as
defined, to perform an assessment of each resident's functional
capacity that is based on a uniform minimum data set, as specified.
This bill would require nursing facilities, the State Department
of Health Care Services, and the State Department of Public Health to
perform various duties with respect to the federal government's
nursing home quality initiative and this assessment.
(3) Under existing law, one of the methods by which Medi-Cal
services are provided is through contracts with various types of
managed care plans. Existing law imposes a tax at a specified rate on
the gross premiums of an insurer, as defined, and, until July 1,
2012, on the total operating revenue, as specified, of a Medi-Cal
managed care plan, as defined. Existing law exempts from that tax the
total operating revenue of a Medi-Cal managed care plan, if
specified events occur before July, 1, 2012. Existing law
continuously appropriates the revenues derived from the tax on
Medi-Cal managed care plans for specified purposes.
This bill would extend the imposition of the tax on the total
operating revenue of Medi-Cal managed care plans until July 1, 2014,
and would make other conforming changes. This bill would, beginning
January 1, 2013, allocate the sum of $15 million dollars from the
revenues derived after July 1, 2012, to the State Department of
Health Care Services for the purpose of creating a performance-based
incentive payment program for specified Medi-Cal managed care plans.
This bill also would authorize the Controller to loan funds in the
Children's Health and Human Services Special Fund to the General
Fund, as provided, until July 1, 2014. By extending the imposition of
a charge whose revenues are continuously appropriated, this bill
would make an appropriation.
(4) Existing law requires, until July 1, 2012, every return
required to be filed with the Insurance Commissioner pursuant to
provisions governing taxes on the total operating revenue of Medi-Cal
managed care plans to be signed by the insurer or the Medi-Cal
managed care plan or an executive officer of the insurer or the plan
and to be made under oath or contain a written declaration that is
made under penalty of perjury.
This bill would instead apply this signature requirement until
July 1, 2014. By expanding the crime of perjury, this bill would
impose a state-mandated local program.
(5) Section 92 of Chapter 11 of the First Extraordinary Session of
the Statutes of 2011 provides that the act becomes inoperative if
any of its provisions are amended or repealed.
This bill would repeal that provision and would provide that,
notwithstanding Section 92 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, the provisions of Chapter 11 of the
First Extraordinary Session of the Statutes of 2011 do not become
inoperative upon the amendment or repeal of any provision of that
chapter made by this bill.
(6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(7) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1324.23 of the Health and Safety Code is
amended to read:
1324.23. (a) The Director of Health Care Services, or his or her
designee, shall administer this article.
(b) The director may adopt regulations as are necessary to
implement this article. These regulations may be adopted as emergency
regulations in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
For purposes of this article, the adoption of regulations shall be
deemed an emergency and necessary for the immediate preservation of
the public peace, health and safety, or general welfare. The
regulations shall include, but need not be limited to, any
regulations necessary for any of the following purposes:
(1) The administration of this article, including the proper
imposition and collection of the quality assurance fee not to exceed
amounts reasonably necessary for purposes of this article.
(2) The development of any forms necessary to obtain required
information from facilities subject to the quality assurance fee.
(3) To provide details, definitions, formulas, and other
requirements.
(c) As an alternative to subdivision (b), and notwithstanding the
rulemaking provisions of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code, the
director may implement this article, in whole or in part, by means of
a provider bulletin or other similar instructions, without taking
regulatory action, provided that no such bulletin or other similar
instructions shall remain in effect after July 31, 2015. It is the
intent of the Legislature that the regulations adopted pursuant to
subdivision (b) shall be adopted on or before July 31, 2015.
SEC. 2. Section 1324.27 of the Health and Safety Code is amended
to read:
1324.27. (a) (1) 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 facilities identified in
subdivision (c) of Section 1324.20, including the submission of a
request for waiver of broad-based requirement, waiver of 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.
(2) The director may alter the methodology specified in this
article, to the extent necessary to meet the requirements of federal
law or regulations or to obtain federal approval. The Director of
Health Care Services may also add new categories of exempt facilities
or apply a nonuniform fee to the skilled nursing facilities subject
to the fee in order to meet requirements of federal law or
regulations. The Director of Health Care Services may apply a zero
fee to one or more exempt categories of facilities, if necessary to
obtain federal approval.
(3) If after seeking federal approval, federal approval is not
obtained, this article shall not be implemented.
(b) The department shall make retrospective adjustments, as
necessary, to the amounts calculated pursuant to Section 1324.21 in
order to assure that the aggregate quality assurance fee for any
particular state fiscal year does not exceed 6 percent of the
aggregate annual net revenue of facilities subject to the fee.
SEC. 3. Section 1324.29 of the Health and Safety Code is amended
to read:
1324.29. (a) The quality assurance fee shall cease to be assessed
after July 31, 2015.
(b) Notwithstanding subdivision (a) and Section 1324.30, the
department's authority and obligation to collect all quality
assurance fees and penalties, including interest, shall continue in
effect and shall not cease until the date that all amounts are paid
or recovered in full.
(c) This section shall remain operative until the date that all
fees and penalties, including interest, have been recovered pursuant
to subdivision (b), and as of that date is repealed.
SEC. 4. Section 1324.30 of the Health and Safety Code is amended
to read:
1324.30. This article shall become inoperative after July 31,
2015, and, as of January 1, 2016, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2016,
deletes or extends the dates on which it becomes inoperative and is
repealed.
SEC. 5. Section 12009 of the Revenue and Taxation Code is amended
to read:
12009. (a) "Medi-Cal managed care plan" or "plan" means any
individual, organization, or entity, other than an insurer as
described in Section 12003 or a dental managed care plan as described
in Section 14087.46 of the Welfare and Institutions Code, that
enters into a contract with the State Department of Health Care
Services pursuant to Article 2.7 (commencing with Section 14087.3),
Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), Article 2.9 (commencing with
Section 14088), or Article 2.91 (commencing with Section 14089) of
Chapter 7 of, or pursuant to Article 1 (commencing with Section
14200) or Article 7 (commencing with Section 14490) of Chapter 8 of,
Part 3 of Division 9 of the Welfare and Institutions Code.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 6. Section 12201 of the Revenue and Taxation Code, as amended
by Section 2 of Chapter 11 of the First Extraordinary Session of the
Statutes of 2011, is amended to read:
12201. (a) Every insurer and Medi-Cal managed care plan doing
business in this state shall annually pay to the state a tax on the
bases, at the rates, and subject to the deductions from the tax
hereinafter specified. For purposes of the tax imposed by this
chapter, "insurer" shall be deemed to include a home protection
company as defined in Section 12740 of the Insurance Code.
(b) Notwithstanding Section 13340 of the Government Code, the
revenues derived from the imposition of the tax by this chapter on
Medi-Cal managed care plans are hereby continuously appropriated as
follows:
(1) A percentage of the revenues derived from the imposition of
the tax by this chapter on Medi-Cal managed care plans equal to the
difference between 100 percent and the applicable federal medical
assistance percentage (FMAP) to the department for purposes of the
Medi-Cal program.
(2) After deducting the revenues appropriated pursuant to
paragraph (1), any remaining revenue to the Managed Risk Medical
Insurance Board for purposes of the Healthy Families Program.
(c) The Insurance Commissioner shall report the amount of revenue
derived from the tax imposed on Medi-Cal managed care plans pursuant
to this section to the California Health and Human Services Agency,
the Joint Legislative Budget Committee, and the Department of
Finance.
(d) Notwithstanding any other law, the Controller may use the
funds in the Children's Health and Human Services Special Fund for
cashflow loans to the General Fund as provided in Sections 16310 and
16381 of the Government Code.
(e) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed. Any tax
imposed by this section shall continue to be due and payable until
the tax is paid.
SEC. 7. Section 12201 of the Revenue and Taxation Code, as amended
by Section 3 of Chapter 11 of the First Extraordinary Session of the
Statutes of 2011, is amended to read:
12201. (a) Every insurer doing business in this state shall
annually pay to the state a tax on the bases, at the rates, and
subject to the deductions from the tax hereinafter specified. For
purposes of the tax imposed by this chapter, "insurer" shall be
deemed to include a home protection company as defined in Section
12740 of the Insurance Code.
(b) This section shall become operative on July 1, 2014.
SEC. 8. Section 12201.5 is added to the Revenue and Taxation Code,
to read:
12201.5. Notwithstanding Section 13340 of the Government Code,
subdivision (b) of Section 12201, or any other law, beginning January
1, 2013, the sum of fifteen million dollars ($15,000,000) from the
revenues derived after July 1, 2012, from the imposition of the tax
by this chapter on Medi-Cal managed care plans is allocated to the
State Department of Health Care Services for the purpose of creating
a performance-based incentive payment program for Medi-Cal managed
care plans subject to the following:
(a) Only Medi-Cal managed care plans in the two-plan model
counties, county organized health systems, and geographic managed
care pursuant to Article 2.7 (commencing with Section 14087.3),
Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), and Article 2.91 (commencing with
Section 14089) of Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code shall be eligible for this program.
(b) Payments to Medi-Cal managed care plans under this program
shall be determined annually by the department based on a Medi-Cal
managed care plan's performance on child-only Health Care
Effectiveness Data and Information Set measures for all children
enrolled in the plan under the Medi-Cal program.
(c) The revenues shall be allocated as follows:
(1) Eleven million dollars ($11,000,000) to two-plan model
counties.
(2) Three million dollars ($3,000,000) to county organized health
system counties.
(3) One million dollars ($1,000,000) to geographic managed care.
(d) The revenues shall be matched with federal financial
participation to the extent that federal financial participation is
available.
SEC. 9. Section 12204 of the Revenue and Taxation Code, as amended
by Section 4 of Chapter 11 of the First Extraordinary Session of the
Statutes of 2011, is amended to read:
12204. (a) The tax imposed on insurers by this chapter is in lieu
of all other taxes and licenses, state, county, and municipal, upon
those insurers and their property, except:
(1) Taxes upon their real estate.
(2) Any retaliatory exactions imposed by paragraph (3) of
subdivision (f) of Section 28 of Article XIII of the Constitution.
(3) The tax on ocean marine insurance.
(4) Motor vehicle and other vehicle registration license fees and
any other tax or license fee imposed by the state upon vehicles,
motor vehicles or the operation thereof.
(5) That each corporate or other attorney-in-fact of a reciprocal
or interinsurance exchange shall be subject to all taxes imposed upon
corporations or others doing business in the state, other than taxes
on income derived from its principal business as attorney-in-fact.
(b) This section shall not apply to any Medi-Cal managed care plan
and to any tax imposed on that plan by this chapter.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 10. Section 12204 of the Revenue and Taxation Code, as
amended by Section 5 of Chapter 11 of the First Extraordinary Session
of the Statutes of 2011, is amended to read:
12204. (a) The tax imposed on insurers by this chapter is in lieu
of all other taxes and licenses, state, county, and municipal, upon
those insurers and their property, except:
(1) Taxes upon their real estate.
(2) Any retaliatory exactions imposed by paragraph (3) of
subdivision (f) of Section 28 of Article XIII of the California
Constitution.
(3) The tax on ocean marine insurance.
(4) Motor vehicle and other vehicle registration license fees and
any other tax or license fee imposed by the state upon vehicles,
motor vehicles or the operation thereof.
(5) That each corporate or other attorney-in-fact of a reciprocal
or interinsurance exchange shall be subject to all taxes imposed upon
corporations or others doing business in the state, other than taxes
on income derived from its principal business as attorney-in-fact.
(b) This section shall become operative on July 1, 2014.
SEC. 11. Section 12207 of the Revenue and Taxation Code is amended
to read:
12207. (a) Notwithstanding any other provision of this part, no
credit shall be allowed under Section 12206, 12208, or 12209 against
the tax imposed on Medi-Cal managed care plans pursuant to Section
12201.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 12. Section 12242 of the Revenue and Taxation Code is amended
to read:
12242. This article shall become inoperative on July 1, 2014,
and, as of January 1, 2015, is repealed, unless a later enacted
statute, that becomes operative on or before July 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 13. Section 12251 of the Revenue and Taxation Code, as
amended by Section 8 of Chapter 11 of the First Extraordinary Session
of the Statutes of 2011, is amended to read:
12251. (a) For the calendar year 1970, and each calendar year
thereafter, insurers transacting insurance in this state and whose
annual tax for the preceding calendar year was five thousand dollars
($5,000) or more shall make prepayments of the annual tax for the
current calendar year imposed by Section 28 of Article XIII of the
California Constitution and this part, provided that no prepayments
shall be made with respect to the tax on ocean marine insurance
underwriting profit or any retaliatory tax.
(b) Medi-Cal managed care plans shall make prepayments of the tax
imposed by Section 12201 for the current calendar year, except that
no prepayments shall be required prior to the effective date of the
act adding this subdivision, and no penalties and interest shall be
imposed pursuant to Section 12261 for not making those prepayments.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 14. Section 12251 of the Revenue and Taxation Code, as
amended by Section 9 of Chapter 11 of the First Extraordinary Session
of the Statutes of 2011, is amended to read:
12251. (a) For the calendar year 1970, and each calendar year
thereafter, insurers transacting insurance in this state and whose
annual tax for the preceding calendar year was five thousand dollars
($5,000) or more shall make prepayments of the annual tax for the
current calendar year imposed by Section 28 of Article XIII of the
California Constitution and this part, provided that no prepayments
shall be made with respect to the tax on ocean marine insurance
underwriting profit or any retaliatory tax.
(b) This section shall become operative on July 1, 2014.
SEC. 15. Section 12253 of the Revenue and Taxation Code, as
amended by Section 10 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12253. (a) Each insurer and Medi-Cal managed care plan required
to make prepayments shall remit them on or before each of the dates
of April 1st, June 1st, September 1st, and December 1st of the
current calendar year. Remittances for prepayments shall be made
payable to the Controller and shall be delivered to the office of the
commissioner, accompanied by a prepayment form prescribed by the
commissioner.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 16. Section 12253 of the Revenue and Taxation Code, as
amended by Section 11 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12253. (a) Each insurer required to make prepayments shall remit
them on or before each of the dates of April 1st, June 1st, September
1st, and December 1st of the current calendar year. Remittances for
prepayments shall be made payable to the Controller and shall be
delivered to the office of the commissioner, accompanied by a
prepayment form prescribed by the commissioner.
(b) This section shall become operative on July 1, 2014.
SEC. 17. Section 12254 of the Revenue and Taxation Code, as
amended by Section 12 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12254. (a) (1) For each insurer, the amount of each prepayment
shall be 25 percent of the amount of the annual insurance tax
liability reported on the return of the insurer for the preceding
calendar year.
(2) For each Medi-Cal managed care plan, the amount of each
prepayment shall be 25 percent of the amount of tax the plan
estimates as the amount of tax imposed by Section 12201 with respect
to the plan.
(b) In establishing the prepayment amount of an insurer that has
acquired the business of another insurer, the amount of tax liability
of the acquiring insurer reported for the preceding calendar year
shall be deemed to include the amount of tax liability of the
acquired insurer reported for that year.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 18. Section 12254 of the Revenue and Taxation Code, as
amended by Section 13 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12254. (a) The amount of each prepayment shall be 25 percent of
the amount of the annual insurance tax liability reported on the
return of the insurer for the preceding calendar year.
(b) In establishing the prepayment amount of an insurer that has
acquired the business of another insurer, the amount of tax liability
of the acquiring insurer reported for the preceding calendar year
shall be deemed to include the amount of tax liability of the
acquired insurer reported for that year.
(c) This section shall become operative on July 1, 2014.
SEC. 19. Section 12257 of the Revenue and Taxation Code, as
amended by Section 14 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12257. (a) If the total amount of prepayments for any calendar
year exceeds the amount of annual tax for that year, the excess shall
be treated as an overpayment of annual tax and, at the election of
the insurer or Medi-Cal managed care plan, may be credited against
the amounts due and payable for the first prepayment of the following
year. Any amount of the overpayment not so credited shall be allowed
as a credit or refund under Article 2 (commencing with Section
12977) of Chapter 7 of this part.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 20. Section 12257 of the Revenue and Taxation Code, as
amended by Section 15 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12257. (a) If the total amount of prepayments for any calendar
year exceeds the amount of annual tax for that year, the excess shall
be treated as an overpayment of annual tax and, at the election of
the insurer, may be credited against the amounts due and payable for
the first prepayment of the following year. Any amount of the
overpayment not so credited shall be allowed as a credit or refund
under Article 2 (commencing with Section 12977) of Chapter 7 of this
part.
(b) This section shall become operative on July 1, 2014.
SEC. 21. Section 12258 of the Revenue and Taxation Code, as
amended by Section 16 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12258. (a) Any insurer or Medi-Cal managed care plan that fails
to pay any prepayment within the time required shall pay a penalty of
10 percent of the amount of the required prepayment, plus interest
at the modified adjusted rate per month, or fraction thereof,
established pursuant to Section 6591.5, from the due date of the
prepayment until the date of payment but not for any period after the
due date of the annual tax. Assessments of prepayment deficiencies
may be made in the manner provided by deficiency assessments of the
annual tax.
(b) Notwithstanding any other law, the prepayment due on September
1, 2011, shall be due no later than 30 days after the effective date
of this act for a Medi-Cal managed care plan as defined in
subdivision (a) of Section 12009.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 22. Section 12258 of the Revenue and Taxation Code, as
amended by Section 17 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12258. (a) Any insurer that fails to pay any prepayment within
the time required shall pay a penalty of 10 percent of the amount of
the required prepayment, plus interest at the modified adjusted rate
per month, or fraction thereof, established pursuant to Section
6591.5, from the due date of the prepayment until the date of payment
but not for any period after the due date of the annual tax.
Assessments of prepayment deficiencies may be made in the manner
provided by deficiency assessments of the annual tax.
(b) This section shall become operative on July 1, 2014.
SEC. 23. Section 12260 of the Revenue and Taxation Code, as
amended by Section 18 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12260. (a) Notwithstanding any other provision of this article,
the commissioner may relieve an insurer or Medi-Cal managed care plan
of its obligation to make prepayments where the insurer or Medi-Cal
managed care plan establishes to the satisfaction of the commissioner
that the insurer has ceased to transact insurance in this state or
the Medi-Cal managed care plan has ceased to operate a plan in this
state, or the insurer's or Medi-Cal managed care plan's annual tax
for the current year will be less than five thousand dollars
($5,000).
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 24. Section 12260 of the Revenue and Taxation Code, as
amended by Section 19 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12260. (a) Notwithstanding any other provision of this article,
the commissioner may relieve an insurer of its obligation to make
prepayments where the insurer establishes to the satisfaction of the
commissioner that either the insurer has ceased to transact insurance
in this state, or the insurer's annual tax for the current year will
be less than five thousand dollars ($5,000).
(b) This section shall become operative on July 1, 2014.
SEC. 25. Section 12301 of the Revenue and Taxation Code, as
amended by Section 20 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12301. (a) The taxes imposed upon insurers by Section 28 of
Article XIII of the California Constitution and this part, except
with respect to taxes on ocean marine insurance and retaliatory
taxes, are due and payable annually on or before April 1st of the
year following the calendar year in which the insurer engaged in the
business of insurance or transacted insurance in this state. The
taxes imposed with respect to ocean marine insurance are due and
payable on or before June 15th of that year.
(b) With respect to Medi-Cal managed care plans, the taxes imposed
by Section 12201 shall be due and payable on or before April 1st of
the year following the calendar year in which the plan contracted
with the State Department of Health Care Services as described in
Section 12009.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed. However,
any tax imposed by Section 12201 shall continue to be due and payable
until the tax is paid.
SEC. 26. Section 12301 of the Revenue and Taxation Code, as
amended by Section 21 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12301. (a) The taxes imposed upon insurers by Section 28 of
Article XIII of the California Constitution and this part, except
with respect to taxes on ocean marine insurance and retaliatory
taxes, are due and payable annually on or before April 1st of the
year following the calendar year in which the insurer engaged in the
business of insurance or transacted insurance in this state. The
taxes imposed with respect to ocean marine insurance are due and
payable on or before June 15th of that year.
(b) This section shall become operative on July 1, 2014.
SEC. 27. Section 12302 of the Revenue and Taxation Code, as
amended by Section 22 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12302. (a) On or before April 1st (or June 15th with respect to
taxes on ocean marine insurance) every person that is subject to any
tax imposed by Section 28 of Article XIII of the California
Constitution or this part, in respect to the preceding calendar year
shall file, in duplicate, a tax return with the commissioner in the
form as the commissioner may prescribe. The return shall show that
information pertaining to its insurance business, or in the case of a
Medi-Cal managed care plan,
pertaining to contracts for providing services as described in
Section 12009, in this state as will reflect the basis of its tax as
set forth in Chapter 2 (commencing with Section 12071) and Chapter 3
(commencing with Section 12201) of this part, the computation of the
amount of tax for the period covered by the return, the total amount
of any tax prepayments made pursuant to Article 5 (commencing with
Section 12251) of Chapter 3 of this part, and any other information
as the commissioner may require to carry out the purposes of this
part. Separate returns shall be filed with respect to the following
kinds of insurance:
(1) Life insurance (or life insurance and disability insurance).
(2) Ocean marine insurance.
(3) Title insurance.
(4) Insurance other than life insurance (or life insurance and
disability insurance), ocean marine insurance or title insurance.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 28. Section 12302 of the Revenue and Taxation Code, as
amended by Section 23 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12302. (a) On or before April 1st (or June 15th with respect to
taxes on ocean marine insurance) every person that is subject to any
tax imposed by Section 28 of Article XIII of the California
Constitution or this part, in respect to the preceding calendar year
shall file, in duplicate, an insurance tax return with the
commissioner in the form as the commissioner may prescribe. The
return shall show that information pertaining to its insurance
business in this state as will reflect the basis of its tax as set
forth in Chapter 2 (commencing with Section 12071) and Chapter 3
(commencing with Section 12201) of this part, the computation of the
amount of tax for the period covered by the return, the total amount
of any tax prepayments made pursuant to Article 5 (commencing with
Section 12251) of Chapter 3 of this part, and any other information
as the commissioner may require to carry out the purposes of this
part. Separate returns shall be filed with respect to the following
kinds of insurance:
(1) Life insurance (or life insurance and disability insurance).
(2) Ocean marine insurance.
(3) Title insurance.
(4) Insurance other than life insurance (or life insurance and
disability insurance), ocean marine insurance or title insurance.
(b) This section shall become operative on July 1, 2014.
SEC. 29. Section 12303 of the Revenue and Taxation Code, as
amended by Section 24 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12303. (a) Every return required by this article to be filed with
the commissioner shall be signed by the insurer or Medi-Cal managed
care plan or an executive officer of the insurer or plan and shall be
made under oath or contain a written declaration that it is made
under penalty of perjury. A return of a foreign insurer may be signed
and verified by its manager residing within this state. A return of
an alien insurer may be signed and verified by the United States
manager of the insurer.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 30. Section 12303 of the Revenue and Taxation Code, as
amended by Section 25 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12303. (a) Every return required by this article to be filed with
the commissioner shall be signed by the insurer or an executive
officer of the insurer and shall be made under oath or contain a
written declaration that it is made under penalty of perjury. A
return of a foreign insurer may be signed and verified by its manager
residing within this state. A return of an alien insurer may be
signed and verified by the United States manager of the insurer.
(b) This section shall become operative on July 1, 2014.
SEC. 31. Section 12304 of the Revenue and Taxation Code, as
amended by Section 26 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12304. (a) Blank forms of returns shall be furnished by the
commissioner on application, but failure to secure the form shall not
relieve any insurer or Medi-Cal managed care plan from making or
filing a timely return.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 32. Section 12304 of the Revenue and Taxation Code, as
amended by Section 27 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12304. (a) Blank forms of returns shall be furnished by the
commissioner on application, but failure to secure the form shall not
relieve any insurer from making or filing a timely return.
(b) This section shall become operative on July 1, 2014.
SEC. 33. Section 12305 of the Revenue and Taxation Code, as
amended by Section 28 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12305. (a) The insurer or Medi-Cal managed care plan required to
file a return shall deliver the return in duplicate, together with a
remittance payable to the Controller, for the amount of tax computed
and shown thereon, less any prepayments made pursuant to Article 5
(commencing with Section 12251) of Chapter 3 of this part, to the
office of the commissioner.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 34. Section 12305 of the Revenue and Taxation Code, as
amended by Section 29 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12305. (a) The insurer required to file a return shall deliver
the return in duplicate, together with a remittance payable to the
Controller, for the amount of tax computed and shown thereon, less
any prepayments made pursuant to Article 5 (commencing with Section
12251) of Chapter 3 of this part, to the office of the commissioner.
(b) This section shall become operative on July 1, 2014.
SEC. 35. Section 12307 of the Revenue and Taxation Code, as
amended by Section 30 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12307. (a) Any insurer or Medi-Cal managed care plan to which an
extension is granted shall pay, in addition to the tax, interest at
the modified adjusted rate per month, or fraction thereof,
established pursuant to Section 6591.5, from April 1st until the date
of payment.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 36. Section 12307 of the Revenue and Taxation Code, as
amended by Section 31 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12307. (a) Any insurer that is granted an extension shall pay, in
addition to the tax, interest at the modified adjusted rate per
month, or fraction thereof, established pursuant to Section 6591.5,
from April 1st until the date of payment.
(b) This section shall become operative on July 1, 2014.
SEC. 37. Section 12412 of the Revenue and Taxation Code, as
amended by Section 32 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12412. (a) Upon receipt of the duplicate copy of the return of an
insurer or Medi-Cal managed care plan the board shall initially
assess the tax in accordance with the data as reported by the insurer
or Medi-Cal managed care plan on the return.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 38. Section 12412 of the Revenue and Taxation Code, as
amended by Section 33 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12412. (a) Upon receipt of the duplicate copy of the return of an
insurer the board shall initially assess the tax in accordance with
the data as reported by the insurer on the return.
(b) This section shall become operative on July 1, 2014.
SEC. 39. Section 12413 of the Revenue and Taxation Code, as
amended by Section 34 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12413. (a) The board shall promptly transmit notice of its
initial assessment to the commissioner and the Controller, and if the
initial assessment differs from the amount computed by the insurer
or Medi-Cal managed care plan, notice shall also be given to the
insurer or Medi-Cal managed care plan.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 40. Section 12413 of the Revenue and Taxation Code, as
amended by Section 35 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12413. (a) The board shall promptly transmit notice of its
initial assessment to the commissioner and the Controller, and if the
initial assessment differs from the amount computed by the insurer,
notice shall also be given to the insurer.
(b) This section shall become operative on July 1, 2014.
SEC. 41. Section 12421 of the Revenue and Taxation Code, as
amended by Section 36 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12421. (a) As soon as practicable after an insurer's, surplus
line broker's, or Medi-Cal managed care plan's return is filed, the
commissioner shall examine it, together with any information within
his or her possession or that may come into his or her possession,
and he or she shall determine the correct amount of tax of the
insurer, surplus line broker, or Medi-Cal managed care plan.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 42. Section 12421 of the Revenue and Taxation Code, as
amended by Section 37 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12421. (a) As soon as practicable after an insurer's or surplus
line broker's return is filed, the commissioner shall examine it,
together with any information within his or her possession or that
may come into his or her possession, and he or she shall determine
the correct amount of tax of the insurer or surplus line broker.
(b) This section shall become operative on July 1, 2014.
SEC. 43. Section 12422 of the Revenue and Taxation Code, as
amended by Section 38 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12422. (a) If the commissioner determines that the amount of tax
disclosed by the insurer's tax return and assessed by the board is
less than the amount of tax disclosed by his or her examination, he
or she shall propose, in writing, to the board a deficiency
assessment for the difference. The proposal shall set forth the basis
for the deficiency assessment and the details of its computation.
(b) If the commissioner determines that the amount of tax
disclosed by the surplus line broker's tax return is less than the
amount of tax disclosed by his or her examination, he or she shall
propose, in writing, to the board a deficiency assessment for the
difference. The proposal shall set forth the basis for the deficiency
assessment and the details of its computation.
(c) If the commissioner determines that the amount of tax
disclosed by the Medi-Cal managed care plan's tax return is less than
the amount of tax disclosed by his or her examination, he or she
shall propose, in writing, to the board a deficiency assessment for
the difference. The proposal shall set forth the basis for the
deficiency assessment and the details of its computation.
(d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 44. Section 12422 of the Revenue and Taxation Code, as
amended by Section 39 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12422. (a) If the commissioner determines that the amount of tax
disclosed by the insurer's tax return and assessed by the board is
less than the amount of tax disclosed by his or her examination, he
or she shall propose, in writing, to the board a deficiency
assessment for the difference. The proposal shall set forth the basis
for the deficiency assessment and the details of its computation.
(b) If the commissioner determines that the amount of tax
disclosed by the surplus line broker's tax return is less than the
amount of tax disclosed by his or her examination, he or she shall
propose, in writing, to the board a deficiency assessment for the
difference. The proposal shall set forth the basis for the deficiency
assessment and the details of its computation.
(c) This section shall become operative on July 1, 2014.
SEC. 45. Section 12423 of the Revenue and Taxation Code, as
amended by Section 40 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12423. (a) If an insurer, surplus line broker, or Medi-Cal
managed care plan fails to file a return, the commissioner may
require a return by mailing notice to the insurer, surplus line
broker, or Medi-Cal managed care plan to file a return by a specified
date or he or she may without requiring a return, or upon no return
having been filed pursuant to the demand therefor, make an estimate
of the amount of tax due for the calendar year or years in respect to
which the insurer, surplus line broker, or Medi-Cal managed care
plan failed to file the return. The estimate shall be made from any
available information which is in the commissioner's possession or
may come into his or her possession, and the commissioner shall
propose, in writing, to the board a deficiency assessment for the
amount of the estimated tax. The proposal shall set forth the basis
of the estimate and the details of the computation of the tax.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 46. Section 12423 of the Revenue and Taxation Code, as
amended by Section 41 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12423. (a) If an insurer or surplus line broker fails to file a
return, the commissioner may require a return by mailing notice to
the insurer or surplus line broker to file a return by a specified
date or he or she may without requiring a return, or upon no return
having been filed pursuant to the demand therefor, make an estimate
of the amount of tax due for the calendar year or years in respect to
which the insurer or surplus line broker failed to file the return.
The estimate shall be made from any available information which is in
the commissioner's possession or may come into his or her
possession, and the commissioner shall propose, in writing, to the
board a deficiency assessment for the amount of the estimated tax.
The proposal shall set forth the basis of the estimate and the
details of the computation of the tax.
(b) This section shall become operative on July 1, 2014.
SEC. 47. Section 12427 of the Revenue and Taxation Code, as
amended by Section 42 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12427. (a) The board shall promptly notify the insurer, surplus
line broker, or Medi-Cal managed care plan of a deficiency assessment
made against the insurer, surplus line broker, or Medi-Cal managed
care plan.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 48. Section 12427 of the Revenue and Taxation Code, as
amended by Section 43 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12427. (a) The board shall promptly notify the insurer or surplus
line broker of a deficiency assessment made against the insurer or
surplus line broker.
(b) This section shall become operative on July 1, 2014.
SEC. 49. Section 12428 of the Revenue and Taxation Code, as
amended by Section 44 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12428. (a) An insurer, surplus line broker, or Medi-Cal managed
care plan against which a deficiency assessment is made under Section
12424 or 12425 may petition for redetermination of the deficiency
assessment within 30 days after service upon the insurer, surplus
line broker, or Medi-Cal managed care plan of the notice thereof, by
filing with the board a written petition setting forth the grounds of
objection to the deficiency assessment and the correction sought. At
the time the petition is filed with the board, a copy of the
petition shall be filed with the commissioner.
If a petition for redetermination is not filed within the period
prescribed by this section, the deficiency assessment becomes final
and due and payable at the expiration of that period.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 50. Section 12428 of the Revenue and Taxation Code, as
amended by Section 45 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12428. (a) An insurer or surplus line broker against which a
deficiency assessment is made under Section 12424 or 12425 may
petition for redetermination of the deficiency assessment within 30
days after service upon the insurer or surplus line broker of the
notice thereof, by filing with the board a written petition setting
forth the grounds of objection to the deficiency assessment and the
correction sought. At the time the petition is filed with the board,
a copy of the petition shall be filed with the commissioner.
If a petition for redetermination is not filed within the period
prescribed by this section, the deficiency assessment becomes final
and due and payable at the expiration of that period.
(b) This section shall become operative on July 1, 2014.
SEC. 51. Section 12429 of the Revenue and Taxation Code, as
amended by Section 46 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12429. (a) If a petition for redetermination of a deficiency
assessment is filed within the time allowed under Section 12428, the
board shall reconsider the deficiency assessment and, if the insurer,
surplus line broker, or Medi-Cal managed care plan has so requested
in the petition, shall grant an oral hearing for the presentation of
evidence and argument before the board or its authorized
representative. The board shall give the petitioner and the
commissioner at least 20 days' notice of the time and place of
hearing. The hearing may be continued from time to time as may be
necessary.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 52. Section 12429 of the Revenue and Taxation Code, as
amended by Section 47 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12429. (a) If a petition for redetermination of a deficiency
assessment is filed within the time allowed under Section 12428, the
board shall reconsider the deficiency assessment and, if the insurer
or surplus line broker has so requested in the petition, shall grant
an oral hearing for the presentation of evidence and argument before
the board or its authorized representative. The board shall give the
petitioner and the commissioner at least 20 days' notice of the time
and place of hearing. The hearing may be continued from time to time
as may be necessary.
(b) This section shall become operative on July 1, 2014.
SEC. 53. Section 12431 of the Revenue and Taxation Code, as
amended by Section 48 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12431. (a) The order or decision of the board upon a petition for
redetermination of a deficiency assessment becomes final 30 days
after service on the insurer, surplus line broker, or Medi-Cal
managed care plan of a notice thereof, and any resulting deficiency
assessment is due and payable at the time the order or decision
becomes final.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 54. Section 12431 of the Revenue and Taxation Code, as
amended by Section 49 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12431. (a) The order or decision of the board upon a petition for
redetermination of a deficiency assessment becomes final 30 days
after service on the insurer or surplus line broker of a notice
thereof, and any resulting deficiency assessment is due and payable
at the time the order or decision becomes final.
(b) This section shall become operative on July 1, 2014.
SEC. 55. Section 12433 of the Revenue and Taxation Code, as
amended by Section 50 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12433. (a) If before the expiration of the time prescribed in
Section 12432 for giving of a notice of deficiency assessment the
insurer, surplus line broker, or Medi-Cal managed care plan has
consented in writing to the giving of the notice after that time, the
notice may be given at any time prior to the expiration of the time
agreed upon. The period so agreed upon may be extended by subsequent
agreements in writing made before the expiration of the period
previously agreed upon.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 56. Section 12433 of the Revenue and Taxation Code, as
amended by Section 51 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12433. (a) If before the expiration of the time prescribed in
Section 12432 for giving of a notice of deficiency assessment the
insurer or surplus line broker has consented in writing to the giving
of the notice after that time, the notice may be given at any time
prior to the expiration of the time agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made before
the expiration of the period previously agreed upon.
(b) This section shall become operative on July 1, 2014.
SEC. 57. Section 12434 of the Revenue and Taxation Code, as
amended by Section 52 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12434. (a) Any notice required by this article shall be placed in
a sealed envelope, with postage paid, addressed to the insurer,
surplus line broker, or Medi-Cal managed care plan at its address as
it appears in the records of the commissioner or the board. The
giving of notice shall be deemed complete at the time of deposit of
the notice in the United States Post Office, or a mailbox, subpost
office, substation or mail chute or other facility regularly
maintained or provided by the United States Postal Service, without
extension of time for any reason. In lieu of mailing, a notice may be
served personally by delivering to the person to be served and
service shall be deemed complete at the time of the delivery.
Personal service to a corporation may be made by delivery of a notice
to any person designated in the Code of Civil Procedure to be served
for the corporation with summons and complaint in a civil action.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 58. Section 12434 of the Revenue and Taxation Code, as
amended by Section 53 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12434. (a) Any notice required by this article shall be placed in
a sealed envelope, with postage paid, addressed to the insurer or
surplus line broker at its address as it appears in the records of
the commissioner or the board. The giving of notice shall be deemed
complete at the time of deposit of the notice in the United States
Post Office, or a mailbox, subpost office, substation or mail chute
or other facility regularly maintained or provided by the United
States Postal Service,
without extension of time for any reason. In lieu of mailing, a
notice may be served personally by delivering to the person to be
served and service shall be deemed complete at the time of the
delivery. Personal service to a corporation may be made by delivery
of a notice to any person designated in the Code of Civil Procedure
to be served for the corporation with summons and complaint in a
civil action.
(b) This section shall become operative on July 1, 2014.
SEC. 59. Section 12491 of the Revenue and Taxation Code, as
amended by Section 54 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12491. (a) Every tax levied upon an insurer under Article XIII of
the California Constitution and this part is a lien upon all
property and franchises of every kind and nature belonging to the
insurer, and has the effect of a judgment against the insurer.
(b) (1) Every tax levied upon a surplus line broker under Part 7.5
(commencing with Section 13201) of Division 2 is a lien upon all
property and franchises of every kind and nature belonging to the
surplus line broker, and has the effect of a judgment against the
surplus line broker.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the surplus line broker.
(c) (1) Every tax levied upon a Medi-Cal managed care plan under
Chapter 1 (commencing with Section 12001) is a lien upon all property
and franchises of every kind and nature belonging to the Medi-Cal
managed care plan, and has the effect of a judgment against the
Medi-Cal managed care plan.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the Medi-Cal managed care plan.
(d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 60. Section 12491 of the Revenue and Taxation Code, as
amended by Section 55 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12491. (a) Every tax levied upon an insurer under the provisions
of Article XIII of the California Constitution and of this part is a
lien upon all property and franchises of every kind and nature
belonging to the insurer, and has the effect of a judgment against
the insurer.
(b) (1) Every tax levied upon a surplus line broker under the
provisions of Part 7.5 (commencing with Section 13201) of Division 2
is a lien upon all property and franchises of every kind and nature
belonging to the surplus line broker, and has the effect of a
judgment against the surplus line broker.
(2) A lien levied pursuant to this subdivision shall not exceed
the amount of unpaid tax collected by the surplus line broker.
(c) This section shall become operative on July 1, 2014.
SEC. 61. Section 12493 of the Revenue and Taxation Code, as
amended by Section 56 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12493. (a) Every lien has the effect of an execution duly levied
against all property of a delinquent insurer, surplus line broker, or
Medi-Cal managed care plan.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 62. Section 12493 of the Revenue and Taxation Code, as
amended by Section 57 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12493. (a) Every lien has the effect of an execution duly levied
against all property of a delinquent insurer or surplus line broker.
(b) This section shall become operative on July 1, 2014.
SEC. 63. Section 12494 of the Revenue and Taxation Code, as
amended by Section 58 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12494. (a) No judgment is satisfied nor lien removed until
either:
(1) The taxes, interest, penalties, and costs are paid.
(2) The insurer's, surplus line broker's, or Medi-Cal managed care
plan's property is sold for the payment thereof.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 64. Section 12494 of the Revenue and Taxation Code, as
amended by Section 59 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12494. (a) No judgment is satisfied nor lien removed until
either:
(1) The taxes, interest, penalties, and costs are paid.
(2) The insurer's or surplus line broker's property is sold for
the payment thereof.
(b) This section shall become operative on July 1, 2014.
SEC. 65. Section 12601 of the Revenue and Taxation Code, as
amended by Section 60 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12601. (a) Amounts of taxes, interest, and penalties not remitted
to the commissioner with the original return of the insurer or
Medi-Cal managed care plan shall be payable to the Controller.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 66. Section 12601 of the Revenue and Taxation Code, as
amended by Section 61 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12601. (a) Amounts of taxes, interest, and penalties not remitted
to the commissioner with the original return of the insurer shall be
payable to the Controller.
(b) This section shall become operative on July 1, 2014.
SEC. 67. Section 12602 of the Revenue and Taxation Code, as
amended by Section 62 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12602. (a) (1) On and after January 1, 1994, and before January
1, 1995, each insurer whose annual taxes exceed fifty thousand
dollars ($50,000) shall make payment by electronic funds transfer, as
defined by Section 45 of the Insurance Code. On and after January 1,
1995, each insurer whose annual taxes exceed twenty thousand dollars
($20,000) shall make payment by electronic funds transfer. The
insurer shall choose one of the acceptable methods described in
Section 45 of the Insurance Code for completing the electronic funds
transfer.
(2) Each Medi-Cal managed care plan shall make payment by
electronic funds transfer, as defined by Section 45 of the Insurance
Code. The plan shall choose one of the acceptable methods described
in Section 45 of the Insurance Code for completing the electronic
funds transfer.
(b) Payment shall be deemed complete on the date the electronic
funds transfer is initiated, if settlement to the state's demand
account occurs on or before the banking day following the date the
transfer is initiated. If settlement to the state's demand account
does not occur on or before the banking day following the date the
transfer is initiated, payment shall be deemed to occur on the date
settlement occurs.
(c) (1) Any insurer or Medi-Cal managed care plan required to
remit taxes by electronic funds transfer pursuant to this section
that remits those taxes by means other than an appropriate electronic
funds transfer, shall be assessed a penalty in an amount equal to 10
percent of the taxes due at the time of the payment.
(2) If the Department of Insurance finds that an insurer's or
Medi-Cal managed care plan's failure to make payment by an
appropriate electronic funds transfer in accordance with subdivision
(a) is due to reasonable cause or circumstances beyond the insurer's
or Medi-Cal managed care plan's control, and occurred notwithstanding
the exercise of ordinary care and in the absence of willful neglect,
that insurer or Medi-Cal managed care plan shall be relieved of the
penalty provided in paragraph (1).
(3) Any insurer or Medi-Cal managed care plan seeking to be
relieved of the penalty provided in paragraph (1) shall file with the
Department of Insurance a statement under penalty of perjury setting
forth the facts upon which the claim for relief is based.
(d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 68. Section 12602 of the Revenue and Taxation Code, as
amended by Section 63 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12602. (a) On and after January 1, 1994, and before January 1,
1995, each insurer whose annual taxes exceed fifty thousand dollars
($50,000) shall make payment by electronic funds transfer, as defined
by Section 45 of the Insurance Code. On and after January 1, 1995,
each insurer whose annual taxes exceed twenty thousand dollars
($20,000) shall make payment by electronic funds transfer. The
insurer shall choose one of the acceptable methods described in
Section 45 of the Insurance Code for completing the electronic funds
transfer.
(b) Payment shall be deemed complete on the date the electronic
funds transfer is initiated, if settlement to the state's demand
account occurs on or before the banking day following the date the
transfer is initiated. If settlement to the state's demand account
does not occur on or before the banking day following the date the
transfer is initiated, payment shall be deemed to occur on the date
settlement occurs.
(c) (1) Any insurer required to remit taxes by electronic funds
transfer pursuant to this section that remits those taxes by means
other than an appropriate electronic funds transfer, shall be
assessed a penalty in an amount equal to 10 percent of the taxes due
at the time of the payment.
(2) If the Department of Insurance finds that an insurer's failure
to make payment by an appropriate electronic funds transfer in
accordance with subdivision (a) is due to reasonable cause or
circumstances beyond the insurer's control, and occurred
notwithstanding the exercise of ordinary care and in the absence of
willful neglect, that insurer shall be relieved of the penalty
provided in paragraph (1).
(3) Any insurer seeking to be relieved of the penalty provided in
paragraph (1) shall file with the Department of Insurance a statement
under penalty of perjury setting forth the facts upon which the
claim for relief is based.
(d) This section shall become operative on July 1, 2014.
SEC. 69. Section 12631 of the Revenue and Taxation Code, as
amended by Section 64 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12631. (a) Any insurer or Medi-Cal managed care plan that fails
to pay any tax, except a tax determined as a deficiency assessment by
the board under Article 3 (commencing with Section 12421) of Chapter
4, within the time required, shall pay a penalty of 10 percent of
the amount of the tax in addition to the tax, plus interest at the
modified adjusted rate per month, or fraction thereof, established
pursuant to Section 6591.5, from the due date of the tax until the
date of payment.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 70. Section 12631 of the Revenue and Taxation Code, as
amended by Section 65 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12631. (a) Any insurer that fails to pay any tax, except a tax
determined as a deficiency assessment by the board under Article 3
(commencing with Section 12421) of Chapter 4, within the time
required, shall pay a penalty of 10 percent of the amount of the tax
in addition to the tax, plus interest at the modified adjusted rate
per month, or fraction thereof, established pursuant to Section
6591.5, from the due date of the tax until the date of payment.
(b) This section shall become operative on July 1, 2014.
SEC. 71. Section 12632 of the Revenue and Taxation Code, as
amended by Section 66 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12632. (a) An insurer or Medi-Cal managed care plan that fails to
pay any deficiency assessment when it becomes due and payable shall,
in addition to the deficiency assessment, pay a penalty of 10
percent of the amount of the deficiency assessment, exclusive of
interest and penalties. The amount of any deficiency assessment,
exclusive of penalties, shall bear interest at the modified adjusted
rate per month, or fraction thereof, established pursuant to Section
6591.5, from the date on which the amount, or any portion thereof,
would have been payable if properly reported and assessed until the
date of payment.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 72. Section 12632 of the Revenue and Taxation Code, as
amended by Section 67 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12632. (a) An insurer that fails to pay any deficiency assessment
when it becomes due and payable shall, in addition to the deficiency
assessment, pay a penalty of 10 percent of the amount of the
deficiency assessment, exclusive of interest and penalties. The
amount of any deficiency assessment, exclusive of penalties, shall
bear interest at the modified adjusted rate per month, or fraction
thereof, established pursuant to Section 6591.5, from the date on
which the amount, or any portion thereof, would have been payable if
properly reported and assessed until the date of payment.
(b) This section shall become operative on July 1, 2014.
SEC. 73. Section 12636 of the Revenue and Taxation Code, as
amended by Section 68 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12636. (a) If the board finds that an insurer's or Medi-Cal
managed care plan's failure to make a timely return or payment is due
to reasonable cause and to circumstances beyond the insurer's or
Medi-Cal managed care plan's control, and which occurred despite the
exercise of ordinary care and in the absence of willful neglect, the
insurer or Medi-Cal managed care plan may be relieved of the penalty
provided by Section 12258, 12282, 12287, 12631, 12632, or 12633.
(b) Any insurer or Medi-Cal managed care plan seeking to be
relieved of the penalty shall file with the board a statement under
penalty of perjury setting forth the facts upon which the claim for
relief is based.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 74. Section 12636 of the Revenue and Taxation Code, as
amended by Section 69 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12636. (a) If the board finds that an insurer's failure to make a
timely return or payment is due to reasonable cause and to
circumstances beyond the insurer's control, and which occurred
despite the exercise of ordinary care and in the absence of willful
neglect, the insurer may be relieved of the penalty provided by
Section 12258, 12282, 12287, 12631, 12632, or 12633.
(b) Any insurer seeking to be relieved of the penalty shall file
with the board a statement under penalty of perjury setting forth the
facts upon which the claim for relief is based.
(c) This section shall become operative on July 1, 2014.
SEC. 75. Section 12636.5 of the Revenue and Taxation Code, as
amended by Section 70 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12636.5. (a) Every payment on an insurer's, surplus line broker'
s, or Medi-Cal managed care plan's delinquent annual tax shall be
applied as follows:
(1) First, to any interest due on the tax.
(2) Second, to any penalty imposed by this part.
(3) The balance, if any, to the tax itself.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 76. Section 12636.5 of the Revenue and Taxation Code, as
amended by Section 71 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12636.5. (a) Every payment on an insurer's or surplus line broker'
s delinquent annual tax shall be applied as follows:
(1) First, to any interest due on the tax.
(2) Second, to any penalty imposed by this part.
(3) The balance, if any, to the tax itself.
(b) This section shall become operative on July 1, 2014.
SEC. 77. Section 12679 of the Revenue and Taxation Code, as
amended by Section 72 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12679. (a) If an insurer's or Medi-Cal managed care plan's right
to do business has been forfeited or its corporate powers suspended,
service of summons may be made upon the persons designated by law to
be served as agents or officers of the insurer or Medi-Cal managed
care plan, and these persons are the agents of the insurer or
Medi-Cal managed care plan for all purposes necessary in order to
prosecute the action. In the case of corporations whose powers have
been suspended, the persons constituting the board of directors may
defend the action.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 78. Section 12679 of the Revenue and Taxation Code, as
amended by Section 73 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12679. (a) If an insurer's right to do business has been
forfeited or its corporate powers suspended, service of summons may
be made upon the persons designated by law to be served as agents or
officers of the insurer, and these persons are the agents of the
insurer for all purposes necessary in order to prosecute the action.
In the case of corporations whose powers have been suspended, the
persons constituting the board of directors may defend the action.
(b) This section shall become operative on July 1, 2014.
SEC. 79. Section 12681 of the Revenue and Taxation Code, as
amended by Section 74 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12681. (a) In the action, a certificate of the Controller or of
the secretary of the board, showing unpaid taxes against an insurer
or Medi-Cal managed care plan is prima facie evidence of:
(1) The assessment of the taxes.
(2) The delinquency.
(3) The amount of the taxes, interest, and penalties due and
unpaid to the state.
(4) That the insurer or Medi-Cal managed care plan is indebted to
the state in the amount of taxes, interest, and penalties appearing
unpaid.
(5) That there has been compliance with all the requirements of
law in relation to the assessment of the taxes.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 80. Section 12681 of the Revenue and Taxation Code, as
amended by Section 75 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12681. (a) In the action, a certificate of the Controller or of
the secretary of the board, showing unpaid taxes against an insurer
is prima facie evidence of:
(1) The assessment of the taxes.
(2) The delinquency.
(3) The amount of the taxes, interest, and penalties due and
unpaid to the state.
(4) That the insurer is indebted to the state in the amount of
taxes, interest, and penalties appearing unpaid.
(5) That there has been compliance with all the requirements of
law in relation to the assessment of the taxes.
(b) This section shall become operative on July 1, 2014.
SEC. 81. Section 12801 of the Revenue and Taxation Code, as
amended by Section 76 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12801. (a) Annually, between December 10th and 15th, the
Controller shall transmit to the commissioner a statement showing the
names of all insurers and Medi-Cal managed care plans that failed to
pay on or before December 10th the whole or any portion of the tax
that became delinquent in the preceding June or which has been unpaid
for more than 30 days from the date it became due and payable as a
deficiency assessment under this part or the whole or any part of the
interest or penalties due with respect to the tax. The statement
shall show the amount of the tax, interest, and penalties due from
each insurer or Medi-Cal managed care plan.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 82. Section 12801 of the Revenue and Taxation Code, as
amended by Section 77 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12801. (a) Annually, between December 10th and 15th, the
Controller shall transmit to the commissioner a statement showing the
names of all insurers that failed to pay on or before December 10th
the whole or any portion of the tax that became delinquent in the
preceding June or which has been unpaid for more than 30 days from
the date it became due and payable as a deficiency assessment under
this part or the whole or any part of the interest or penalties due
with respect to the tax. The statement shall show the amount of the
tax, interest, and penalties due from each insurer.
(b) This section shall become operative on July 1, 2014.
SEC. 83. Section 12951 of the Revenue and Taxation Code, as
amended by Section 78 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12951. (a) If any amount has been illegally assessed, the board
shall set forth that fact in its records, certify the amount
determined to be assessed in excess of the amount legally assessed
and the insurer, surplus line broker, or Medi-Cal managed care plan
against which the assessment was made, and authorize the cancellation
of the amount upon the records of the Controller and the board. The
board shall mail a notice to the insurer, surplus line broker, or
Medi-Cal managed care plan of any cancellation authorized. Any
proposed determination by the board pursuant to this section with
respect to an amount in excess of fifty thousand dollars ($50,000)
shall be available as a public record for at least 10 days prior to
the effective date of that determination.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 84. Section 12951 of the Revenue and Taxation Code, as
amended by Section 79 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12951. (a) If any amount has been illegally assessed, the board
shall set forth that fact in its records, certify the amount
determined to be assessed in excess of the amount legally assessed
and the insurer or surplus line broker against which the assessment
was made, and authorize the cancellation of the amount upon the
records of the Controller and the board. The board shall mail a
notice to the insurer or surplus line broker of any cancellation
authorized. Any proposed determination by the board pursuant to this
section with respect to an amount in excess of fifty thousand dollars
($50,000) shall be available as a public record for at least 10 days
prior to the effective date of that determination.
(b) This section shall become operative on July 1, 2014.
SEC. 85. Section 12977 of the Revenue and Taxation Code, as
amended by Section 80 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12977. (a) If the board determines that any tax, interest, or
penalty has been paid more than once or has been erroneously or
illegally collected or computed, the board shall set forth that fact
in its records of the board, certify the amount of the taxes,
interest, or penalties collected in excess of what was legally due,
and from whom they were collected or by whom paid, and certify the
excess to the Controller for credit or refund.
(b) The Controller upon receipt of a certification for credit or
refund shall credit the excess on any amounts then due and payable
from the insurer, surplus line broker, or Medi-Cal managed care plan
under this part and refund the balance.
(c) Any proposed determination by the board pursuant to this
section with respect to an amount in excess of fifty thousand dollars
($50,000) shall be available as a public record for at least 10 days
prior to the effective date of that determination.
(d) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 86. Section
12977 of the Revenue and Taxation Code, as amended by Section 81 of
Chapter 11 of the First Extraordinary Session of the Statutes of
2011, is amended to read:
12977. (a) If the board determines that any tax, interest, or
penalty has been paid more than once or has been erroneously or
illegally collected or computed, the board shall set forth that fact
in its records of the board, certify the amount of the taxes,
interest, or penalties collected in excess of what was legally due,
and from whom they were collected or by whom paid, and certify the
excess to the Controller for credit or refund.
(b) The Controller upon receipt of a certification for credit or
refund shall credit the excess on any amounts then due and payable
from the insurer or surplus line broker under this part and refund
the balance.
(c) Any proposed determination by the board pursuant to this
section with respect to an amount in excess of fifty thousand dollars
($50,000) shall be available as a public record for at least 10 days
prior to the effective date of that determination.
(d) This section shall become operative on July 1, 2014.
SEC. 87. Section 12983 of the Revenue and Taxation Code, as
amended by Section 82 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12983. (a) Interest shall be allowed upon the amount of any
overpayment of tax by an insurer or Medi-Cal managed care plan
pursuant to this part at the modified adjusted rate per month
established pursuant to Section 6591.5, from the first day of the
monthly period following the period during which the overpayment was
made. For purposes of this section, "monthly period" means the month
commencing on the day after the due date of the payment through the
same date as the due date in each successive month. In addition, a
refund or credit shall be made of any interest imposed upon the
claimant with respect to the amount being refunded or credited.
The interest shall be paid as follows:
(1) In the case of a refund, to the last day of the calendar month
following the date upon which the claimant is notified in writing
that a claim may be filed or the date upon which the claim is
approved by the board, whichever date is the earlier.
(2) In the case of a credit, to the same date as that to which
interest is computed on the tax or amount against which the credit is
applied.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 88. Section 12983 of the Revenue and Taxation Code, as
amended by Section 83 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12983. (a) Interest shall be allowed upon the amount of any
overpayment of tax by an insurer pursuant to this part at the
modified adjusted rate per month established pursuant to Section
6591.5, from the first day of the monthly period following the period
during which the overpayment was made. For purposes of this section,
"monthly period" means the month commencing on the day after the due
date of the payment through the same date as the due date in each
successive month. In addition, a refund or credit shall be made of
any interest imposed upon the claimant with respect to the amount
being refunded or credited.
The interest shall be paid as follows:
(1) In the case of a refund, to the last day of the calendar month
following the date upon which the claimant is notified in writing
that a claim may be filed or the date upon which the claim is
approved by the board, whichever date is the earlier.
(2) In the case of a credit, to the same date as that to which
interest is computed on the tax or amount against which the credit is
applied.
(b) This section shall become operative on July 1, 2014.
SEC. 89. Section 12984 of the Revenue and Taxation Code, as
amended by Section 84 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12984. (a) If the board determines that any overpayment has been
made intentionally or made not incident to a bona fide and orderly
discharge of a liability reasonably assumed by the insurer, surplus
line broker, or Medi-Cal managed care plan to be imposed by law, no
interest shall be allowed on the overpayment.
(b) If any insurer, surplus line broker, or Medi-Cal managed care
plan which has filed a claim for refund requests the board to defer
action on its claim, the board, as a condition to deferring action,
may require the claimant to waive interest for the period during
which the insurer, surplus line broker, or Medi-Cal managed care plan
requests the board to defer action on the claim.
(c) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 90. Section 12984 of the Revenue and Taxation Code, as
amended by Section 85 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
12984. (a) If the board determines that any overpayment has been
made intentionally or made not incident to a bona fide and orderly
discharge of a liability reasonably assumed by the insurer or surplus
line broker to be imposed by law, no interest shall be allowed on
the overpayment.
(b) If any insurer or surplus line broker which has filed a claim
for refund requests the board to defer action on its claim, the
board, as a condition to deferring action, may require the claimant
to waive interest for the period during which the insurer or surplus
line broker requests the board to defer action on the claim.
(c) This section shall become operative on July 1, 2014.
SEC. 91. Section 13108 of the Revenue and Taxation Code, as
amended by Section 86 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
13108. (a) A judgment shall not be rendered in favor of the
plaintiff when the action is brought by or in the name of an assignee
of the insurer paying the tax, interest, or penalties, or by any
person other than the insurer or Medi-Cal managed care plan that has
paid the tax, interest, or penalties.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 92. Section 13108 of the Revenue and Taxation Code, as
amended by Section 87 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is amended to read:
13108. (a) A judgment shall not be rendered in favor of the
plaintiff when the action is brought by or in the name of an assignee
of the insurer paying the tax, interest, or penalties, or by any
person other than the insurer that has paid the tax, interest, or
penalties.
(b) This section shall become operative on July 1, 2014.
SEC. 93. Section 14126.022 of the Welfare and Institutions Code is
amended to read:
14126.022. (a) (1) By August 1, 2011, the department shall
develop the Skilled Nursing Facility Quality and Accountability
Supplemental Payment System, subject to approval by the federal
Centers for Medicare and Medicaid Services, and the availability of
federal, state, or other funds.
(2) (A) The system shall be utilized to provide supplemental
payments to skilled nursing facilities that improve the quality and
accountability of care rendered to residents in skilled nursing
facilities, as defined in subdivision (c) of Section 1250 of the
Health and Safety Code, and to penalize those facilities that do not
meet measurable standards.
(B) A freestanding pediatric subacute care facility, as defined in
Section 51215.8 of Title 22 of the California Code of Regulations,
shall be exempt from the Skilled Nursing Facility Quality and
Accountability Supplemental Payment System.
(3) The system shall be phased in, beginning with the 2010-11 rate
year.
(4) The department may utilize the system to do all of the
following:
(A) Assess overall facility quality of care and quality of care
improvement, and assign quality and accountability payments to
skilled nursing facilities pursuant to performance measures described
in subdivision (i).
(B) Assign quality and accountability payments or penalties
relating to quality of care, or direct care staffing levels, wages,
and benefits, or both.
(C) Limit the reimbursement of legal fees incurred by skilled
nursing facilities engaged in the defense of governmental legal
actions filed against the facilities.
(D) Publish each facility's quality assessment and quality and
accountability payments in a manner and form determined by the
director, or his or her designee.
(E) Beginning with the 2011-12 fiscal year, establish a base year
to collect performance measures described in subdivision (i).
(F) Beginning with the 2011-12 fiscal year, in coordination with
the State Department of Public Health, publish the direct care
staffing level data and the performance measures required pursuant to
subdivision (i).
(b) (1) There is hereby created in the State Treasury, the Skilled
Nursing Facility Quality and Accountability Special Fund. The fund
shall contain moneys deposited pursuant to subdivisions (g) and (j)
to (l), inclusive. Notwithstanding Section 16305.7 of the Government
Code, the fund shall contain all interest and dividends earned on
moneys in the fund.
(2) Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated without regard to fiscal year to
the department for making quality and accountability payments, in
accordance with subdivision (m), to facilities that meet or exceed
predefined measures as established by this section.
(3) Upon appropriation by the Legislature, moneys in the fund may
also be used for any of the following purposes:
(A) To cover the administrative costs incurred by the State
Department of Public Health for positions and contract funding
required to implement this section.
(B) To cover the administrative costs incurred by the State
Department of Health Care Services for positions and contract funding
required to implement this section.
(C) To provide funding assistance for the Long-Term Care Ombudsman
Program activities pursuant to Chapter 11 (commencing with Section
9700) of Division 8.5.
(c) No appropriation associated with this bill is intended to
implement the provisions of Section 1276.65 of the Health and Safety
Code.
(d) (1) There is hereby appropriated for the 2010-11 fiscal year,
one million nine hundred thousand dollars ($1,900,000) from the
Skilled Nursing Facility Quality and Accountability Special Fund to
the California Department of Aging for the Long-Term Care Ombudsman
Program activities pursuant to Chapter 11 (commencing with Section
9700) of Division 8.5. It is the intent of the Legislature for the
one million nine hundred thousand dollars ($1,900,000) from the fund
to be in addition to the four million one hundred sixty-eight
thousand dollars ($4,168,000) proposed in the Governor's May Revision
for the 2010-11 Budget. It is further the intent of the Legislature
to increase this level of appropriation in subsequent years to
provide support sufficient to carry out the mandates and activities
pursuant to Chapter 11 (commencing with Section 9700) of Division
8.5.
(2) The department, in partnership with the California Department
of Aging, shall seek approval from the federal Centers for Medicare
and Medicaid Services to obtain federal Medicaid reimbursement for
activities conducted by the Long-Term Care Ombudsman Program. The
department shall report to the fiscal committees of the Legislature
during budget hearings on progress being made and any unresolved
issues during the 2011-12 budget deliberations.
(e) There is hereby created in the Special Deposit Fund
established pursuant to Section 16370 of the Government Code, the
Skilled Nursing Facility Minimum Staffing Penalty Account. The
account shall contain all moneys deposited pursuant to subdivision
(f).
(f) (1) Beginning with the 2010-11 fiscal year, the State
Department of Public Health shall use the direct care staffing level
data it collects to determine whether a skilled nursing facility has
met the nursing hours per patient per day requirements pursuant to
Section 1276.5 of the Health and Safety Code.
(2) (A) Beginning with the 2010-11 fiscal year, the State
Department of Public Health shall assess a skilled nursing facility,
licensed pursuant to subdivision (c) of Section 1250 of the Health
and Safety Code, an administrative penalty if the State Department of
Public Health determines that the skilled nursing facility fails to
meet the nursing hours per patient per day requirements pursuant to
Section 1276.5 of the Health and Safety Code as follows:
(i) Fifteen thousand dollars ($15,000) if the facility fails to
meet the requirements for 5 percent or more of the audited days up to
49 percent.
(ii) Thirty thousand dollars ($30,000) if the facility fails to
meet the requirements for over 49 percent or more of the audited
days.
(B) (i) If the skilled nursing facility does not dispute the
determination or assessment, the penalties shall be paid in full by
the licensee to the State Department of Public Health within 30 days
of the facility's receipt of the notice of penalty and deposited into
the Skilled Nursing Facility Minimum Staffing Penalty Account.
(ii) The State Department of Public Health may, upon written
notification to the licensee, request that the department offset any
moneys owed to the licensee by the Medi-Cal program or any other
payment program administered by the department to recoup the penalty
provided for in this section.
(C) (i) If a facility disputes the determination or assessment
made pursuant to this paragraph, the facility shall, within 15 days
of the facility's receipt of the determination and assessment,
simultaneously submit a request for appeal to both the department and
the State Department of Public Health. The request shall include a
detailed statement describing the reason for appeal and include all
supporting documents the facility will present at the hearing.
(ii) Within 10 days of the State Department of Public Health's
receipt of the facility's request for appeal, the State Department of
Public Health shall submit, to both the facility and the department,
all supporting documents that will be presented at the hearing.
(D) The department shall hear a timely appeal and issue a decision
as follows:
(i) The hearing shall commence within 60 days from the date of
receipt by the department of the facility's timely request for
appeal.
(ii) The department shall issue a decision within 120 days from
the date of receipt by the department of the facility's timely
request for appeal.
(iii) The decision of the department's hearing officer, when
issued, shall be the final decision of the State Department of Public
Health.
(E) The appeals process set forth in this paragraph shall be
exempt from Chapter 4.5 (commencing with Section 11400) and Chapter 5
(commencing with Section 11500), of Part 1 of Division 3 of Title 2
of the Government Code. The provisions of Section 100171 and 131071
of the Health and Safety Code shall not apply to appeals under this
paragraph.
(F) If a hearing decision issued pursuant to subparagraph (D) is
in favor of the State Department of Public Health, the skilled
nursing facility shall pay the penalties to the State Department of
Public Health within 30 days of the facility's receipt of the
decision. The penalties collected shall be deposited into the Skilled
Nursing Facility Minimum Staffing Penalty Account.
(G) The assessment of a penalty under this subdivision does not
supplant the State Department of Public Health's investigation
process or issuance of deficiencies or citations under Chapter 2.4
(commencing with Section 1417) of Division 2 of the Health and Safety
Code.
(g) The State Department of Public Health shall transfer, on a
monthly basis, all penalty payments collected pursuant to subdivision
(f) into the Skilled Nursing Facility Quality and Accountability
Special Fund.
(h) Nothing in this section shall impact the effectiveness or
utilization of Section 1278.5 or 1432 of the Health and Safety Code
relating to whistleblower protections, or Section 1420 of the Health
and Safety Code relating to complaints.
(i) (1) Beginning in the 2010-11 fiscal year, the department, in
consultation with representatives from the long-term care industry,
organized labor, and consumers, shall establish and publish quality
and accountability measures, benchmarks, and data submission
deadlines by November 30, 2010.
(2) The methodology developed pursuant to this section shall
include, but not be limited to, the following requirements and
performance measures:
(A) Beginning in the 2011-12 fiscal year:
(i) Immunization rates.
(ii) Facility acquired pressure ulcer incidence.
(iii) The use of physical restraints.
(iv) Compliance with the nursing hours per patient per day
requirements pursuant to Section 1276.5 of the Health and Safety
Code.
(v) Resident and family satisfaction.
(vi) Direct care staff retention, if sufficient data is available.
(B) If this act is extended beyond the dates on which it becomes
inoperative and is repealed, in accordance with Section 14126.033,
the department, in consultation with representatives from the
long-term care industry, organized labor, and consumers, beginning in
the 2013-14 rate year, shall incorporate additional measures into
the system, including, but not limited to, quality and accountability
measures required by federal health care reform that are identified
by the federal Centers for Medicare and Medicaid Services.
(C) The department, in consultation with representatives from the
long-term care industry, organized labor, and consumers, may
incorporate additional performance measures, including, but not
limited to, the following:
(i) Compliance with state policy associated with the United States
Supreme Court decision in Olmstead v. L.C. ex rel. Zimring (1999)
527 U.S. 581.
(ii) Direct care staff retention, if not addressed in the 2012-13
rate year.
(iii) The use of chemical restraints.
(j) (1) Beginning with the 2010-11 rate year, and pursuant to
subparagraph (B) of paragraph (5) of subdivision (a) of Section
14126.023, the department shall set aside savings achieved from
setting the professional liability insurance cost category, including
any insurance deductible costs paid by the facility, at the 75th
percentile. From this amount, the department shall transfer the
General Fund portion into the Skilled Nursing Facility Quality and
Accountability Special Fund. A skilled nursing facility shall provide
supplemental data on insurance deductible costs to facilitate this
adjustment, in the format and by the deadlines determined by the
department. If this data is not provided, a facility's insurance
deductible costs will remain in the administrative costs category.
(2) Notwithstanding paragraph (1), for the 2012-13 rate year only,
savings from capping the professional liability insurance cost
category pursuant to paragraph (1) shall remain in the General Fund
and shall not be transferred to the Skilled Nursing Facility Quality
and Accountability Special Fund.
(k) Beginning with the 2013-14 rate year, if there is a rate
increase in the weighted average Medi-Cal reimbursement rate, the
department shall set aside the first 1 percent of the weighted
average Medi-Cal reimbursement rate increase for the Skilled Nursing
Facility Quality and Accountability Special Fund.
(l) If this act is extended beyond the dates on which it becomes
inoperative and is repealed, in accordance with Section 14126.033,
beginning with the 2014-15 rate year, in addition to the amount set
aside pursuant to subdivision (k), if there is a rate increase in the
weighted average Medi-Cal reimbursement rate, the department shall
set aside at least one-third of the weighted average Medi-Cal
reimbursement rate increase, up to a maximum of 1 percent, from which
the department shall transfer the General Fund portion of this
amount into the Skilled Nursing Facility Quality and Accountability
Special Fund.
(m) (1) (A) Beginning with the 2013-14 rate year, the department
shall pay a supplemental payment, by April 30, 2014, to skilled
nursing facilities based on all of the criteria in subdivision (i),
as published by the department, and according to performance measure
benchmarks determined by the department in consultation with
stakeholders.
(B) (i) The department may convene a diverse stakeholder group,
including, but not limited to, representatives from consumer groups
and organizations, labor, nursing home providers, advocacy
organizations involved with the aging community, staff from the
Legislature, and other interested parties, to discuss and analyze
alternative mechanisms to implement the quality and accountability
payments provided to nursing homes for reimbursement.
(ii) The department shall articulate in a report to the fiscal and
appropriate policy committees of the Legislature the implementation
of an alternative mechanism as described in clause (i) at least 90
days prior to any policy or budgetary changes, and seek subsequent
legislation in order to enact the proposed changes.
(2) Skilled nursing facilities that do not submit required
performance data by the department's specified data submission
deadlines pursuant to subdivision (i) shall not be eligible to
receive supplemental payments.
(3) Notwithstanding paragraph (1), if a facility appeals the
performance measure of compliance with the nursing hours per patient
per day requirements, pursuant to Section 1276.5 of the Health and
Safety Code, to the State Department of Public Health, and it is
unresolved by the department's published due date, the department
shall not use that performance measure when determining the facility'
s supplemental payment.
(4) Notwithstanding paragraph (1), if the department is unable to
pay the supplemental payments by April 30, 2014, then on May 1, 2014,
the department shall use the funds available in the Skilled Nursing
Facility Quality and Accountability Special Fund as a result of
savings identified in subdivisions (k) and (l), less the
administrative costs required to implement subparagraphs (A) and (B)
of paragraph (3) of subdivision (b), in addition to any Medicaid
funds that are available as of December 31, 2013, to increase
provider rates retroactively to August 1, 2013.
(n) The department shall seek necessary approvals from the federal
Centers for Medicare and Medicaid Services to implement this
section. The department shall implement this section only in a manner
that is consistent with federal Medicaid law and regulations, and
only to the extent that approval is obtained from the federal Centers
for Medicare and Medicaid Services and federal financial
participation is available.
(o) In implementing this section, the department and the State
Department of Public Health may contract as necessary, with
California's Medicare Quality Improvement Organization, or other
entities deemed qualified by the department or the State Department
of Public Health, not associated with a skilled nursing facility, to
assist with development, collection, analysis, and reporting of the
performance data pursuant to subdivision (i), and with demonstrated
expertise in long-term care quality, data collection or analysis, and
accountability performance measurement models pursuant to
subdivision (i). This subdivision establishes an accelerated process
for issuing any contract pursuant to this section. Any contract
entered into pursuant to this subdivision shall be exempt from the
requirements of the Public Contract Code, through December 31, 2013.
(p) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
following shall apply:
(1) The director shall implement this section, in whole or in
part, by means of provider bulletins, or other similar instructions
without taking regulatory action.
(2) The State Public Health Officer may implement this section by
means of all facility letters, or other similar instructions without
taking regulatory action.
(q) Notwithstanding paragraph (1) of subdivision (m), if a final
judicial determination is made by any state or federal court that is
not appealed, in any action by any party, or a final determination is
made by the administrator of the federal Centers for Medicare and
Medicaid Services, that any payments pursuant to subdivisions (a) and
(m), are invalid, unlawful, or contrary to any provision of federal
law or regulations, or of state law, these subdivisions shall become
inoperative, and for the 2011-12 rate year, the rate increase
provided under subparagraph (A) of paragraph (4) of subdivision (c)
of Section 14126.033 shall be reduced by the amounts described in
subdivision (j). For the 2013-14 rate year, and for each subsequent
rate year, any rate increase shall be reduced by the amounts
described in subdivisions (j) to (l), inclusive.
SEC. 94. Section 14126.027 of the Welfare and Institutions Code is
amended to read:
14126.027. (a) (1) The Director of Health Care Services, or his
or her designee, shall administer this article.
(2) The regulations and other similar instructions adopted
pursuant to this article shall be developed in consultation with
representatives of the long-term care industry, organized labor,
seniors, and consumers.
(b) (1) The director may adopt regulations as are necessary to
implement this article. The adoption, amendment, repeal, or
readoption of a regulation authorized by this section is deemed to be
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, for purposes of Sections 11346.1 and
11349.6 of the Government Code, and the department is hereby
exempted from the requirement that it describe specific facts showing
the need for immediate action.
(2) The regulations adopted pursuant to this section may include,
but need not be limited to, any regulations necessary for any of the
following purposes:
(A) The administration of this article, including the
specific analytical process for the proper determination of long-term
care rates.
(B) The development of any forms necessary to obtain required cost
data and other information from facilities subject to the
ratesetting methodology.
(C) To provide details, definitions, formulas, and other
requirements.
(c) As an alternative to the adoption of regulations pursuant to
subdivision (b), and notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the director may implement this article, in whole or in part,
by means of a provider bulletin or other similar instructions,
without taking regulatory action, provided that no such bulletin or
other similar instructions shall remain in effect after July 31,
2015. It is the intent of the Legislature that regulations adopted
pursuant to subdivision (b) shall be in place on or before July 31,
2015.
SEC. 95. Section 14126.028 is added to the Health
Welfare and Safety
Institutions Code, to read:
14126.028. (a) The Legislature finds and declares both of the
following:
(1) Section Q of the Minimum Data Set, Version 3.0, developed as
part of the federal government's nursing home quality initiative,
uses a person-centered approach to ensure that all individuals have
the opportunity to learn about home- and community-based services and
have the opportunity to receive long-term care services in the least
restrictive setting possible.
(2) More community care services and support options and choices
are now available to meet the care preferences and needs in the least
restrictive setting possible.
(b) Nursing facilities shall either meet the residents' discharge
planning and referral needs, or make referrals to a designated local
contact agency (LCA) as determined by the State Department of Health
Care Services. The LCA is responsible for contacting referred
residents, and for providing information and counseling on available
home- and community-based services. The LCA shall also either assist
directly with transition services or make referrals to organizations
that assist with transition services, as appropriate.
(c) It is the intent of the Legislature to ensure that nursing
home residents who, during the Minimum Data Set, Version 3.0, Section
Q assessment, express interest in the possibility of receiving care
and services in the community are appropriately referred by nursing
facilities to the LCA, as appropriate.
(d) The State Department of Health Care Services, in collaboration
with the State Department of Public Health, shall, by April 1, 2013,
provide the Legislature an analysis of the appropriate sections of
the Minimum Data Set, Version 3.0, Section Q and nursing facilities
referrals made to the LCA. This analysis shall also document the LCA'
s response to referrals from nursing facilities and the outcomes of
those referrals.
(e) The State Department of Public Health and the State Department
of Health Care Services shall regularly, and at least quarterly,
meet with representatives from the long-term care industry, organized
labor, consumers, and consumer advocates to provide updates and
receive input on the planning for, implementation of, and progress of
the skilled nursing facility quality improvement program. To
facilitate decisionmaking, the State Department of Public Health and
the State Department of Health Care Services shall promptly convene
this workgroup and provide ongoing guidance to reach tangible
outcomes for implementation by no later than January 2013.
SEC. 96. Section 14126.033 of the Welfare and Institutions Code is
amended to read:
14126.033. (a) The Legislature finds and declares all of the
following:
(1) Costs within the Medi-Cal program continue to grow due to the
rising cost of providing health care throughout the state and also
due to increases in enrollment, which are more pronounced during
difficult economic times.
(2) In order to minimize the need for drastically cutting
enrollment standards or benefits during times of economic crisis, it
is crucial to find areas within the program where reimbursement
levels are higher than required under the standard provided in
Section 1902(a)(30)(A) of the federal Social Security Act and can be
reduced in accordance with federal law.
(3) The Medi-Cal program delivers its services and benefits to
Medi-Cal beneficiaries through a wide variety of health care
providers, some of which deliver care via managed care or other
contract models while others do so through fee-for-service
arrangements.
(4) The setting of rates within the Medi-Cal program is complex
and is subject to close supervision by the United States Department
of Health and Human Services.
(5) As the single state agency for Medicaid in California, the
State Department of Health Care Services has unique expertise that
can inform decisions that set or adjust reimbursement methodologies
and levels consistent with the requirements of federal law.
(b) Therefore, it is the intent of the Legislature for the
department to analyze and identify where reimbursement levels can be
reduced consistent with the standard provided in Section 1902(a)(30)
(A) of the federal Social Security Act and also consistent with
federal and state law and policies, including any exemptions
contained in the act that added this section, provided that the
reductions in reimbursement shall not exceed 10 percent on an
aggregate basis for all providers, services, and products.
(c) This article, including Section 14126.031, shall be funded as
follows:
(1) General Fund moneys appropriated for purposes of this article
pursuant to Section 6 of the act adding this section shall be used
for increasing rates, except as provided in Section 14126.031, for
freestanding skilled nursing facilities, and shall be consistent with
the approved methodology required to be submitted to the federal
Centers for Medicare and Medicaid Services pursuant to Article 7.6
(commencing with Section 1324.20) of Chapter 2 of Division 2 of the
Health and Safety Code.
(2) (A) Notwithstanding Section 14126.023, for the 2005-06 rate
year, the maximum annual increase in the weighted average Medi-Cal
rate required for purposes of this article shall not exceed 8 percent
of the weighted average Medi-Cal reimbursement rate for the 2004-05
rate year as adjusted for the change in the cost to the facility to
comply with the nursing facility quality assurance fee for the
2005-06 rate year, as required under subdivision (b) of Section
1324.21 of the Health and Safety Code, plus the total projected
Medi-Cal cost to the facility of complying with new state or federal
mandates.
(B) Beginning with the 2006-07 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate required
for purposes of this article shall not exceed 5 percent of the
weighted average Medi-Cal reimbursement rate for the prior fiscal
year, as adjusted for the projected cost of complying with new state
or federal mandates.
(C) Beginning with the 2007-08 rate year and continuing through
the 2008-09 rate year, the maximum annual increase in the weighted
average Medi-Cal reimbursement rate required for purposes of this
article shall not exceed 5.5 percent of the weighted average Medi-Cal
reimbursement rate for the prior fiscal year, as adjusted for the
projected cost of complying with new state or federal mandates.
(D) For the 2009-10 rate year, the weighted average Medi-Cal
reimbursement rate required for purposes of this article shall not be
increased with respect to the weighted average Medi-Cal
reimbursement rate for the 2008-09 rate year, as adjusted for the
projected cost of complying with new state or federal mandates.
(3) (A) For the 2010-11 rate year, if the increase in the federal
medical assistance percentage (FMAP) pursuant to the federal American
Recovery and Reinvestment Act of 2009 (ARRA) (Public Law 111-5) is
extended for the entire 2010-11 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate for the
purposes of this article shall not exceed 3.93 percent, or 3.14
percent, if the increase in the FMAP pursuant to ARRA is not extended
for that period of time, plus the projected cost of complying with
new state or federal mandates. If the increase in the FMAP pursuant
to ARRA is extended at a different rate, or for a different time
period, the rate adjustment for facilities shall be adjusted
accordingly.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(iii) To ensure that the state does not incur any additional
General Fund expenses to pay for the 2010-11 weighted average
Medi-Cal reimbursement rate increase.
(C) If the maximum annual increase in the weighted average
Medi-Cal rate is reduced pursuant to subparagraph (B), the department
shall recalculate and publish the final maximum annual increase in
the weighted average Medi-Cal reimbursement rate.
(4) (A) Subject to the following provisions, for the 2011-12 rate
year, the increase in the Medi-Cal reimbursement rate for the purpose
of this article, for each skilled nursing facility as defined in
subdivision (c) of Section 1250 of the Health and Safety Code, shall
not exceed 2.4 percent of the rate on file that was applicable on May
31, 2011, plus the projected cost of complying with new state or
federal mandates. The percentage increase shall be applied equally to
each rate on file as of May 31, 2011.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(iii) To ensure that the state does not incur any additional
General Fund expenses to pay for the 2011-12 weighted average
Medi-Cal reimbursement rate increase.
(C) The department may recalculate and publish the weighted
average Medi-Cal reimbursement rate increase for the 2011-12 rate
year if the difference in the projected quality assurance fee
collections from the 2011-12 rate year, compared to the projected
quality assurance fee collections for the 2010-11 rate year, would
result in any additional General Fund expense to pay for the 2011-12
rate year weighted average reimbursement rate increase.
(5) To the extent that rates are projected to exceed the adjusted
limits calculated pursuant to subparagraphs (A) to (D), inclusive, of
paragraph (2) and, as applicable, paragraphs (3) and (4), the
department shall adjust each skilled nursing facility's projected
rate for the applicable rate year by an equal percentage.
(6) (A) (i) Notwithstanding any other provision of law, and except
as provided in subparagraph (B), payments resulting from the
application of paragraphs (3) and (4), the provisions of paragraph
(5), and all other applicable adjustments and limits as required by
this section, shall be reduced by 10 percent for dates of service on
and after June 1, 2011, through July 31, 2012. This is a one-time
reduction evenly distributed across all facilities to ensure
long-term stability of nursing homes serving the Medi-Cal population.
(ii) Notwithstanding any other provision of law, the director may
adjust the percentage reductions specified in clause (i), as long as
the resulting reductions, in the aggregate, total no more than 10
percent.
(iii) The adjustments authorized under this subparagraph shall be
implemented only if the director determines that the payments
resulting from the adjustments comply with paragraph (7).
(B) Payments to facilities owned or operated by the state shall be
exempt from the payment reduction required by this paragraph.
(7) (A) Notwithstanding any other provision of this section, the
payment reductions and adjustments required by paragraph (6) shall be
implemented only if the director determines that the payments that
result from the application of paragraph (6) will comply with
applicable federal Medicaid requirements and that federal financial
participation will be available.
(B) In determining whether federal financial participation is
available, the director shall determine whether the payments comply
with applicable federal Medicaid requirements, including those set
forth in Section 1396a(a)(30)(A) of Title 42 of the United States
Code.
(C) To the extent that the director determines that the payments
do not comply with applicable federal Medicaid requirements or that
federal financial participation is not available with respect to any
payment that is reduced pursuant to this section, the director
retains the discretion to not implement the particular payment
reduction or adjustment and may adjust the payment as necessary to
comply with federal Medicaid requirements.
(8) For managed care health plans that contract with the
department pursuant to this chapter and Chapter 8 (commencing with
Section 14200), except for contracts with the Senior Care Action
Network and AIDS Healthcare Foundation, and to the extent that these
services are provided through any of those contracts, payments shall
be reduced by the actuarial equivalent amount of the reduced provider
reimbursements specified in paragraph (6) pursuant to contract
amendments or change orders effective on July 1, 2011, or thereafter.
(9) (A) For the 2012-13 rate year, all of the following shall
apply:
(i) The department shall determine the amounts of reduced payments
for each skilled nursing facility, as defined in subdivision (c) of
Section 1250 of the Health and Safety Code, resulting from the
10-percent reduction imposed pursuant to clause (i) of subparagraph
(A) of paragraph (6) for the period beginning on June 1, 2011,
through July 31, 2012.
(ii) For claims adjudicated through October 1, 2012, each skilled
nursing facility as defined in subdivision (c) of Section 1250 of the
Health and Safety Code that is reimbursed under the Medi-Cal
fee-for-service program, shall receive the total payments calculated
by the department in clause (i), not later than December 31, 2012.
(iii) For managed care plans that contract with the department
pursuant to this chapter or Chapter 8 (commencing with Section
14200), except contracts with Senior Care Action Network and AIDS
Healthcare Foundation, and to the extent that skilled nursing
services are provided through any of those contracts, payments shall
be adjusted by the actuarial equivalent amount of the reimbursements
calculated in clause (i) pursuant to contract amendments or change
orders effective on July 1, 2012, or thereafter.
(B) Notwithstanding subparagraph (A), beginning on August 1, 2012,
through July 31, 2013, the department shall pay the facility
specific Medi-Cal reimbursement rate that was on file and applicable
to the specific skilled nursing facility on August 1, 2011, prior to
and excluding any rate reduction implemented pursuant to clause (i)
of subparagraph (A) of paragraph (6) for the period beginning on June
1, 2011, to July 31, 2012, inclusive, and adjusted for the projected
costs of complying with new state or federal mandates. These rates
are deemed to be sufficient to meet operating expenses.
(C) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (B) shall be adjusted by the department if
the federal Centers for Medicare and Medicaid Services does not
approve any proposed modification to the methodology for calculation
of the skilled nursing quality assurance fee pursuant to Article 7.6
(commencing with Section 1324.20) of Chapter 2 of Division 2 of the
Health and Safety Code.
(D) Notwithstanding any other provision of law, beginning on
January 1, 2013, Article 7.6 (commencing with Section 1324.20) of
Chapter 2 of Division 2 of the Health and Safety Code, which imposes
a skilled nursing facility quality assurance fee, shall not be
enforceable against any skilled nursing facility unless each skilled
nursing facility is paid the rate provided for in subparagraphs (A)
and (B). Any amount collected during the 2012-13 rate year by the
department pursuant to Article 7.6 (commencing with Section 1324.20)
of Chapter 2 of Division 2 of the Health and Safety Code shall be
refunded to each facility not later than February 1, 2013.
(E) The provisions of this paragraph shall also be included as
part of a state plan amendment implementing the 2011-12 and 2012-13
Medi-Cal reimbursement rates authorized under this article.
(10) (A) Subject to the following provisions, for the 2013-14 and
2014-15 rate years, the annual increase in the weighted average
Medi-Cal reimbursement rate for the purpose of this article, for each
skilled nursing facility as defined in subdivision (c) of Section
1250 of the Health and Safety Code, shall be 3 percent for each rate
year, respectively, plus the projected cost of complying with new
state or federal mandates.
(B) (i) For the 2013-14 rate year, if there is a rate increase in
the weighted average Medi-Cal reimbursement rate, the department
shall set aside 1 percent of the increase in the weighted average
Medi-Cal reimbursement rate, from which the department shall transfer
the nonfederal portion into the Skilled Nursing Facility Quality and
Accountability Special Fund, to be used for the supplemental rate
pool.
(ii) For the 2014-15 rate year, if there is a rate increase in the
weighted average Medi-Cal reimbursement rate, the department shall
set aside at least one-third of the weighted average Medi-Cal
reimbursement rate increase, up to a maximum of 1 percent, from which
the department shall transfer the nonfederal portion of this amount
into the Skilled Nursing Facility Quality and Accountability Special
Fund.
(C) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(11) The director shall seek any necessary federal approvals for
the implementation of this section. This section shall not be
implemented until federal approval is obtained. When federal approval
is obtained, the payments resulting from the application of
paragraph (6) shall be implemented retroactively to June 1, 2011, or
on any other date or dates as may be applicable.
(d) The rate methodology shall cease to be implemented after July
31, 2015.
(e) (1) It is the intent of the Legislature that the
implementation of this article result in individual access to
appropriate long-term care services, quality resident care, decent
wages and benefits for nursing home workers, a stable workforce,
provider compliance with all applicable state and federal
requirements, and administrative efficiency.
(2) Not later than December 1, 2006, the Bureau of State Audits
shall conduct an accountability evaluation of the department's
progress toward implementing a facility-specific reimbursement
system, including a review of data to ensure that the new system is
appropriately reimbursing facilities within specified cost categories
and a review of the fiscal impact of the new system on the General
Fund.
(3) Not later than January 1, 2007, to the extent information is
available for the three years immediately preceding the
implementation of this article, the department shall provide baseline
information in a report to the Legislature on all of the following:
(A) The number and percent of freestanding skilled nursing
facilities that complied with minimum staffing requirements.
(B) The staffing levels prior to the implementation of this
article.
(C) The staffing retention rates prior to the implementation of
this article.
(D) The numbers and percentage of freestanding skilled nursing
facilities with findings of immediate jeopardy, substandard quality
of care, or actual harm, as determined by the certification survey of
each freestanding skilled nursing facility conducted prior to the
implementation of this article.
(E) The number of freestanding skilled nursing facilities that
received state citations and the number and class of citations issued
during calendar year 2004.
(F) The average wage and benefits for employees prior to the
implementation of this article.
(4) Not later than January 1, 2009, the department shall provide a
report to the Legislature that does both of the following:
(A) Compares the information required in paragraph (2) to that
same information two years after the implementation of this article.
(B) Reports on the extent to which residents who had expressed a
preference to return to the community, as provided in Section 1418.81
of the Health and Safety Code, were able to return to the community.
(5) The department may contract for the reports required under
this subdivision.
SEC. 97. Section 14126.036 of the Welfare and Institutions Code is
amended to read:
14126.036. This article shall become inoperative on August 1,
2015, and as of January 1, 2016, is repealed, unless a later enacted
statute that is enacted before January 1, 2016, deletes or extends
that date.
SEC. 98. Section 14301.11 of the Welfare and Institutions Code is
amended to read:
14301.11. (a) The department shall use funds attributable to the
tax on Medi-Cal managed care plans imposed by Section 12201 of the
Revenue and Taxation Code for the purpose specified in paragraph (1)
of subdivision (b) of Section 12201 of the Revenue and Taxation Code.
(b) This section shall become inoperative on July 1, 2014, and, as
of January 1, 2015, is repealed, unless a later enacted statute,
that becomes operative on or before July 1, 2014, deletes or extends
the dates on which it becomes inoperative and is repealed.
SEC. 99. Section 92 of Chapter 11 of the First Extraordinary
Session of the Statutes of 2011, is repealed.
SEC. 100. Notwithstanding Section 92 of Chapter 11 of the First
Extraordinary Session of the Statutes of 2011, the provisions of
Chapter 11 of the First Extraordinary Session of the Statutes of 2011
shall not become inoperative upon the amendment or repeal of those
provisions made by this act.
SEC. 101. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 102. 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 make statutory changes necessary for implementation of
the Budget Act of 2012, it is necessary that this act take effect
immediately.
