BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 72
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          SENATE THIRD READING
          SB 72 (Budget and Fiscal Review Committee)
          As Amended March 14, 2011
          2/3 vote.  Urgency 

           SENATE VOTE  :Vote not relevant  
           
           SUMMARY  :  Makes statutory changes necessary to implement Human 
          Services-related portions of the 2011-12 Budget.  Specifically, 
           this bill  :

          1)Delays, for one additional year, to July 1, 2012, 
            implementation of provisions enacted by AB 2488 (Leno), 
            Chapter 386, Statutes of 2006 related to disclosure of 
            personal information between adoptees and their biological 
            siblings.  Declares intent for implementation to continue in 
            the interim to the extent possible.

          2)Suspends, for one year, the county share of child support 
            funds that are recovered by the government in cases where the 
            custodial family has received cash assistance.  Those funds 
            will instead be retained by the state.  This change results in 
            $24 million General Fund (GF) savings in the 2011-12 fiscal 
            year.

          3)Makes various changes to the California Work Opportunities and 
            Responsibility to Kids (CalWORKs) Program as follows: 

             a)   Effective June 1, 2011 or 90 days after enactment of 
               this legislation, whichever is later, reduces the number of 
               months parents or caregiver relatives can receive aid from 
               60 to 48.  This change is anticipated to result in $156 
               million ongoing, annual GF savings.  Also makes related 
               changes, including deletion of self-sufficiency reviews and 
               revised time limit and sanction policies that would 
               otherwise take effect on July 1, 2011 as enacted by AB 8 X4 
               (Evans), Chapter 8, Statutes of 2009-10 Fourth 
               Extraordinary Session;

             b)   Effective June 1, 2011 or 90 days after enactment of 
               this legislation, whichever is later, reduces the Maximum 
               Aid Payment in effect on July 1, 2009 by an additional 8%.  
               As a result, maximum grants for a family of three in a 
               high-cost county would be lowered from $694 to $638 per 








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               month.  This change is anticipated to result in $304 
               million ongoing, annual GF savings;

             c)   Effective June 1, 2011 or 90 days after enactment of 
               this legislation, whichever is later, further reduces, by 
               5% increments (for a maximum total reduction of 15%), 
               grants for children in cases without an aided adult who 
               have received assistance for more than 60, 72, and 84 
               months, respectively.  This change is anticipated to result 
               in $100 million ongoing, annual GF savings;

             d)   Lowers funding for these purposes in the counties' 
               "single allocation" by $427 million GF in the 2011-12 
               fiscal year.  Correspondingly, extends and expands upon 
               exemptions from welfare-to-work requirements for parents of 
               very young children (i.e., one child up to the age of 35 
               months or two children under the age of six years).  Also 
               grants counties flexibility to redirect between and among 
               specified funding for employment assistance, substance 
               abuse treatment, or mental health services during that same 
               year;

             e)   Suspends for one year the case management services and 
               sanctions otherwise available under the CalLearn program 
               for pregnant and parenting teenagers.  These teenagers 
               would instead be eligible for regular welfare-to-work 
               services that are available in their counties.  They would 
               also continue to be eligible for supplements or bonuses 
               related to progress in school, as specified.  These changes 
               are anticipated to result in $45 million GF savings in the 
               2011-12 fiscal year; 

             f)   Amends the state's current policy of disregarding the 
               first $225 of earned income and 50% of each dollar earned 
               beyond $225 when calculating a family's monthly grant.  
               Instead disregards the first $112 of earned income and then 
               50% of all other relevant earnings.  As a result, some 
               families who currently have qualifying earnings would have 
               their grants reduced.  This change is anticipated to result 
               in $95 million ongoing, annual GF savings;

             g)   Makes cost-neutral changes to expand the state's 
               participation in an existing subsidized employment program 
               and align the program more closely with operation of a 








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               related program that existed under the federal American 
               Recovery and Reinvestment Act of 2009's (Public Law 111-5) 
               Emergency Contingency Fund.  As a result, the state would 
               participate in half of the costs of the subsidized 
               employment participant's wages, up to the amount that the 
               state would instead have paid for the family's assistance 
               grant; and,

             h)   Delays to April 1, 2014 (from April 1, 2013), the date 
               by which the Work Incentive Nutritional Supplement (WINS) 
               program shall be fully implemented.  Delays to October 1, 
               2014 (from October 1, 2011), the date by which the 
               Temporary Assistance Program (TAP) must begin.  Further, 
               delays statewide implementation of a CalWORKs county peer 
               review process to no later than July 1, 2014.

          1)Makes various changes to In-Home Supportive Services (IHSS) as 
            follows:

             a)   Requires applicants for and recipients of IHSS to obtain 
               certification from a licensed health care professional, as 
               specified, declaring that the applicant or recipient is 
               unable to perform one or more activities of daily living 
               independently, and that without one or more IHSS services, 
               the applicant or recipient is at risk of placement in 
               out-of-home care.  This change is anticipated to result in 
               $120 million ongoing, annual GF savings;

             b)   Requires the Department of Health Care Services to 
               assess and determine whether it would be cost-efficient for 
               the state to exercise the Community First Choice Option 
               made available under section 1915(k) of the federal Social 
               Security Act (42 U.S.C. Sec. 1396n(k)).  This new state 
               plan option becomes available October 1, 2011.  States that 
               take up the option receive a six percentage point increase 
               in federal matching payments for costs associated with the 
               covered home and community-based services programs.  This 
               change is anticipated to result in $128 million ongoing, 
               annual GF savings; and, 

             c)   Authorizes counties to establish IHSS Advisory 
               Committees that submit recommendations to the county board 
               of supervisors on the preferred mode or modes of service to 
               be utilized in the county.  Under existing law, these 








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               Advisory Committees are instead required.  This change is 
               anticipated to result in $1.4 million ongoing, annual GF 
               savings.

          1)Makes various changes to the Medication Dispensing Pilot 
            Project & Related Triggers as follows:

             a)   Requires the Department of Health Care Services (DHCS) 
               to identify individuals who receive Medi-Cal benefits on a 
               fee-for-service basis and who are at high risk of not 
               taking their medications as prescribed.  To the extent 
               necessary, also requires the DHCS to procure automated 
               medication dispensing machines to be installed in 
               participants' homes and monitored as indicated.  Further 
               requires the DHCS to report on and evaluate the pilot 
               project.  Also allows the DHCS to terminate the pilot 
               project under specified circumstances.  These changes are 
               anticipated to result in $140 million ongoing, annual GF 
               savings; and, 

             b)   If the Department of Finance determines that data 
               reported regarding the pilot project does not demonstrate 
               the ability to achieve annualized net savings of $140 
               million GF (after offsetting administrative costs), the 
               director shall notify the Legislature by April 10, 2012, 
               and request the passage of legislation by July 1, 2012 that 
               provides alternative options for achieving any additional 
               savings needed to reach this target.  If the pilot and any 
               subsequent legislation requested by the Department of 
               Finance are not anticipated to result in $140 million 
               annualized GF savings, requires the Department of Social 
               Services to implement an across-the-board reduction in IHSS 
               services beginning October 1, 2012, with specified 
               exceptions.

          1)Includes costs associated with the Long-Term Care Ombudsman 
            Program among the authorized uses of funds in the State Health 
            Facilities Citation Penalties Account.

          2)Effective June 1, 2011 or 90 days after enactment of this 
            legislation, whichever is later, reduces to the minimum amount 
            required by federal maintenance of effort requirements, as 
            specified, the State Supplementary Payment (SSP) portion of 
            grants for individuals.  As a result, the maximum combined 








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            Supplemental Security Income (SSI)/SSP grant for most 
            individuals would be reduced from $845 to $830.  This change 
            is anticipated to result in $177 million ongoing, annual GF 
            savings.

          3)Adds an urgency clause allowing this bill to take effect 
            immediately upon enactment.

          FISCAL EFFECT  :  Makes statutory changes to achieve a total of 
          over $1.7 billion in savings assumed in the 2011-12 Budget Act.  



           Analysis Prepared by  :   Nicole Vazquez / BUDGET / (916) 319-2099

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