APPROPRIATIONS

STAFF CONTACT: Theresa Kehoe

SSB 3024 — Mental Health Risk Pool

COMMITTEE ACTION

SSB 3024 appropriates funds from the sale of regulated utility property near Palo, Iowa to the Mental Health and Disabilities (MHDS) risk pool. Approximately four or five years ago, Iowa changed how it taxed regulated utilities. It is referred to as the “Replacement Generation Tax.” If certain circumstances occurred, revenue would be deposited in the property tax relief fund and distributed to all 99 Iowa counties. Up until now, no funds have been generated for this purpose. Now, due to the sale of property at the Palo plant to an out-of-state entity, funds will be available. SSB 3024 directs these funds to the MHDS risk pool. Counties will have until February 25, 2008, to apply for the funds, which are distributed by an independent review board. The board has until March 25, 2008, to make final decisions on the distribution.

Administrative rules spell out the allowable purposes for the funds. If adequate funds are not available, funds are pro-rated among all approved requests. Currently, the MDHS risk pool has a balance of $560,000. SSB 3024 will add an additional $627,000 in FY08 for the MDHS risk pool, for a total of $1,187,000 of available funds in FY08. Beginning in FY09, this legislation will provide $1.2 million annually to the MDHS risk pool for distribution to those counties that are in the most need of mental health funds. [1/16: short form]