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Implementation of Tax
(a) In implementing the tax imposed by subdivision (b) of Section 14199.123, the department shall adhere to all of the following:
(1) The tax shall not exceed the limits set forth in Section 14199.126.
(2) The models and methodologies utilized by the department shall be substantially similar to those relied upon for imposition of the tax set forth in Article 7.1 (commencing with Section 14199.80) of Chapter 7.
(3) The tax shall comply with federal Medicaid requirements applicable to permissible health care-related taxes, including, but not limited to, Section 433.68 of Title 42 of the Code of Federal Regulations.
(4) Consistent with the limits set forth in Section 14199.126, the department shall attempt to maximize the amount of federal matching funds.
(b) (1) Except as provided in paragraph (2), if the requirements set forth in Section 433.68 of Title 42 of the Code of Federal Regulations, or any other provision of federal law with which the tax imposed by this article must comply, are replaced by amended or successor requirements, the department shall ensure the tax imposed pursuant to this article complies with those amended or successor requirements.
(2) Notwithstanding paragraph (1), the limits set forth in Section 14199.126 shall not be exceeded.
(c) (1) Commencing on the effective date of this chapter, the department shall be required to seek federal renewal and reauthorization as necessary to continue the imposition of the tax imposed by this article.
(2) The department shall request approval from the federal Centers for Medicare and Medicaid Services as is necessary to implement this article. The department shall not impose or collect the tax imposed pursuant to this article until the department receives approval from the federal Centers for Medicare and Medicaid Services that the tax is a permissible health care-related tax in accordance with Section 433.68 of Title 42 of the Code of Federal Regulations and is eligible for federal financial participation.
(d) (1) Consistent with the limits set forth in Section 14199.126, the department may, upon consultation with affected taxpayers, modify or make minor adjustments to any methodology, tax amount, taxing tier, or other provision specified in this article to the extent it is reasonably necessary to meet the requirements of federal statute or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or is not otherwise jeopardized.
(2) When making, or considering making, any adjustment described in paragraph (1), the department shall share with affected taxpayers and the stakeholder advisory committee relevant information, proposals, drafts, and any information affecting tax liability at least 90 calendar days in advance of seeking federal approval for the adjustment. The department shall provide notice of any final adjustment in tax liability to affected taxpayers at least 45 calendar days before the adjustment takes effect.
(e) In implementing this article, the department may establish a specific calendar year as the base year and use the base data source to determine for each health plan each of the enrollment totals described in paragraphs (1) to (6), inclusive, of subdivision (a) of Section 14199.83, as that section read in Chapter 13 of the Statutes of 2023.