BILL NUMBER: AB 564	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 23, 2009
	AMENDED IN SENATE  JUNE 26, 2009
	AMENDED IN ASSEMBLY  MAY 14, 2009
	AMENDED IN ASSEMBLY  MAY 5, 2009

INTRODUCED BY   Assembly Members Portantino and Bonnie Lowenthal

                        FEBRUARY 25, 2009

   An act to  amend Section 11999.6 of   add
Division 10.75 (commencing with Section 11999.3.1) to  the
Health and Safety Code, relating to substance abuse.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 564, as amended, Portantino. Substance  Abuse Treatment
Fund   abuse treatment  : prohibition of excessive
salaries.
   Existing law, the Substance Abuse and Crime Prevention Act of
2000, was enacted by the voters at the November 2000 general
election. Amendment of the act by the Legislature requires a 2/3 vote
of both houses of the Legislature. The act requires all amendments
to further the act and be consistent with its purposes. The act
creates a Substance Abuse Treatment Trust Fund to provide moneys to
cover county costs associated with drug treatment programs, as
specified. The act also requires annual and long-term effectiveness
and financial impact studies on the programs funded by the act as
well as periodic audits of the expenditures.  Existing law places
certain conditions on the allocation of state funds to entities,
whether public or private, for drug- or alcohol-related programs and
  requires state agencies that distribute state funds to
these entities to establish and provide guidelines and procedures for
these ent   ities to use to ensure compliance with those
conditions.  
   This bill would establish a limitation on the amount of
compensation a director, officer, or employee of a nonprofit
substance abuse treatment facility may receive from public sources,
not to exceed a certain federal compensation limitation, and
establish specified compensation requirements for any director,
officer, or employee who collects rent from a drug treatment
facility. Because this bill would establish restrictions on the
distribution of funds from the Substance Abuse Treatment Trust Fund,
it would amend the Substance Abuse and Crime Prevention Act of 2000
and therefore require a 2/3 vote of both houses of the Legislature.
 
   This bill would provide that the moneys in the Substance Abuse
Treatment Trust Fund shall not be used to provide a special benefit
that is unreasonable under the circumstances to any private person or
entity because of his, her, or its relationship to a nonprofit
corporation receiving funding from the fund, including excessive
executive compensation, as specified. 
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  It is the intent of Legislature in enacting this act to
reinforce the goals of Proposition 36 of the November 2000 statewide
general election by ensuring that money directed by the voters for
drug treatment should be used for that purpose and not to provide
large salaries to the executives of large drug treatment facilities.
   SEC. 2.    Division 10.75 (commencing with Section
11999.3.1) is added to the   Health and Safety Code 
 , to read:  

      DIVISION 10.75.  Compensation of Substance Abuse Treatment
Providers


   11999.3.1.  The following restrictions shall apply to the
compensation of any director, officer, or employee of any nonprofit
corporation providing substance abuse treatment in the state:
   (a) The maximum amount of public funds that may be used for
compensation for a full-time director, officer, or employee shall not
exceed the salary limitation established by the federal government
on awards made by the federal Substance Abuse and Mental Health
Services Administration (SAMHSA). This amount shall be prorated for
any person working less than full time.
   (b) Public funds shall not be used for compensation for any
director, officer, or employee who collects rent from a substance
abuse treatment facility unless that person certifies that he or she
is in compliance with the federal Office of Management and Budget
Circular A-122, relating to cost principles for nonprofit
organizations.  
  SEC. 2.    Section 11999.6 of the Health and
Safety Code is amended to read:
   11999.6.  (a) Moneys deposited in the Substance Abuse Treatment
Trust Fund shall be distributed annually by the Secretary of the
Health and Human Services Agency through the State Department of
Alcohol and Drug Programs to counties to cover the costs of placing
persons in and providing drug treatment programs under this act, and
vocational training, family counseling, and literacy training under
this act. Additional costs that may be reimbursed from the Substance
Abuse Treatment Trust Fund include probation department costs, court
monitoring costs and any miscellaneous costs made necessary by the
provisions of this act other than drug testing services of any kind.
Incarceration costs cannot be reimbursed from the fund. Those moneys
shall be allocated to counties through a fair and equitable
distribution formula that includes, but is not limited to, per capita
arrests for controlled substance possession violations and substance
abuse treatment caseload, as determined by the department as
necessary to carry out the purposes of this act. The department may
reserve a portion of the fund to pay for direct contracts with drug
treatment service providers in counties or areas in which the
director of the department has determined that demand for drug
treatment services is not adequately met by existing programs.
However, nothing in this section shall be interpreted or construed to
allow any entity to use funds from the Substance Abuse Treatment
Trust Fund to supplant funds from any existing fund source or
mechanism currently used to provide substance abuse treatment. In
addition, funds from the Substance Abuse Treatment Trust Fund shall
not be used to fund in any way the drug treatment courts established
pursuant to Article 2 (commencing with Section 11970.1) or Article 3
(commencing with Section 11970.4) of Chapter 2 of Part 3 of Division
10.5, including drug treatment or probation supervision associated
with those drug treatment courts.
   (b) (1) Funds from the Substance Abuse Treatment Trust Fund shall
not be used to provide an individual or entity with any special
benefit that is unreasonable under the circumstances because of his,
her, or its relationship to any nonprofit corporation receiving
funding from the fund, including excessive compensation to directors,
officers, or employees of any nonprofit corporation receiving that
funding.
   (2) In order to effectuate this subdivision, the following
requirements shall apply to the compensation of any executive of a
nonprofit corporation providing services under this division:
   (A) The amount of any grant of funds under this section which can
be used for executive compensation may not exceed 1 percent of the
value of the grant multiplied by the percentage of total revenues
received by the corporation for substance abuse treatment activities
that come from public sources. However, if this calculation yields an
amount less than one-quarter of 1 percent of the value of the grant,
an amount that does not exceed one-quarter of 1 percent of the grant
may be used for executive compensation.
   (B) No grant of funds under this section shall be used for
executive compensation for anyone who collects rent from a treatment
facility in an amount that exceeds 1 percent of the value of the
grant.