BILL ANALYSIS Ó
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ITEM VETO
Bill No: SB 74
Author: Senate Budget and Fiscal Review Committee
Amended: 3/14/11
Vote: 27 - Urgency
PRIOR SENATE VOTES NOT RELEVANT
SENATE FLOOR : 35-1, 3/16/11
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, De León, DeSaulnier, Dutton, Evans,
Fuller, Gaines, Hancock, Harman, Hernandez, Huff, Kehoe,
La Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod,
Padilla, Price, Rubio, Runner, Simitian, Steinberg,
Strickland, Vargas, Wolk, Wright, Wyland
NOES: Yee
NO VOTE RECORDED: Correa, Emmerson, Pavley, Walters
ASSEMBLY FLOOR : 58-17, 3/16/11 - See last page for vote
SUBJECT : Budget Act of 2011: Developmental Services
SOURCE : Author
DIGEST : This bill makes various changes to statutes
related to developmental services which are necessary to
enact provisions contained in the Budget Bill for 2011-12.
Assembly Amendments delete the prior version of the bill
and inserts the current language to make various changes to
statutes related to developmental services provided under
CONTINUED
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the Lanterman Act.
ANALYSIS : This is the Omnibus Developmental Services
Trailer Bill. It contains necessary changes to enact the
Budget Bill for 2011-12. It makes the following key
changes:
Best Practices for Purchase of Services. The Budget Bill
reflects a reduction of $174 million (General Fund) through
the development of (1) best practices to provide more
uniformity and consistency in administrative practices of
Regional Centers; and (2) best practices for the purchase
of services. This bill provides a framework for the
Department of Developmental Services (DDS) to proceed with
the development of proposed best practices to be provided
to the fiscal and policy committees of the Legislature by
no later than May 15, 2011.
The submission to the Legislature from the DDS shall be
provided by no later than May 15, 2011 and shall include,
among other things: (1) the anticipated impact of the best
practices; (2) estimated cost savings associated with each
practice; (3) and draft statutory language necessary to
implement the best practices.
Implementation of the best practices shall take effect only
upon subsequent legislative enactment.
Conflict of Interest. A reduction of $11 million (General
Fund) has been identified for this component. Of this
cost-avoidance amount, $900,000 (General Fund) is from
Regional Center Operations and $10.1 million (General Fund)
is from the Purchase of Services.
This language requires the DDS to adopt emergency
regulations to establish standard conflict-of-interest
reporting requirements regarding Regional Centers (Board
Members, Directors, and identified employees).
It requires each Regional Center to submit a
conflict-of-interest policy to the DDS by July 1, 2011 and
to post this information on-line by August 1, 2011.
It states that the DDS shall ensure that no Regional Center
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employee or Board Member has a conflict of interest with an
entity that receives Regional Center funding as specified.
Regional Center Board Members and specified staff shall
complete conflict of interest statements as specified. A
person who knowingly provides false information on a
conflict of interest statement shall be subject to a civil
penalty in an amount up to $50,000, in addition to any
civil remedies available to the department.
Accountability and Transparency. A reduction of $27.1
million (General Fund) has been identified for this
component.
First, it requires each Regional Center Board to submit to
the DDS detailed documentation that the composition of the
Board is in compliance with state law as specified.
Second, it requires the Regional Center Board to adopt
written policy that requires contracts to be discussed and
approved by the Board. This information would be placed on
its Internet Website, along with many other provisions
regarding public information policies and requirements.
Third, it would make certain persons or entities
ineligible, to be Regional Center Vendors if convicted of
prescribed crimes or have been found liable for fraud or
abuse of civil proceedings within the previous 10 years.
This statutory change was necessary to comply with federal
Medicaid law.
Fourth, it provides for emergency regulation authority to
amend provider and vendor eligibility and disclosure
criteria to meet federal requirements.
Administrative Cost Cap. Savings of $39.5 million (General
Fund) have been identified for this component. Of this
amount, $1.3 million (General Fund) is from Regional Center
Operations and $38.2 million (General Fund) is from the
Purchase of Services.
First, this language requires all contracts between DDS and
the Regional Centers for Operations funding to have no more
than 15 percent spent on administrative functions as
specified.
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Second, it requires all Regional Center contracts or
agreements in which rates are determined through
negotiation to have no more than 15 percent spent on
administrative functions as specified.
Third, it requires Service Providers and Contractors, upon
request, to provide Regional Centers with access to any
documents, books, papers, computerized data, or related
information pertaining to negotiated rates.
Dispute Resolution and Third Party Liability. A reduction
of $10.5 million (General Fund) has been identified for
this component.
First, this language authorizes DDS or Regional Centers to
institute legal proceedings against a Third party payer
(insurance companies) as a result of an injury in which the
Third Party payer is liable. The language underscores that
DDS and Regional Centers are the payers of last resort when
Third Party payment is responsible.
Second, the language provides for recovery of reasonable
value for services provided. It establishes procedures for
the enforcement of a lien by the DDS or Regional Center
upon a judgment or award in favor of a consumer for Third
Party injury.
Audits. A reduction of $21.5 million (General Fund) has
been identified for this component. Of this amount,
$200,000 is from Regional Center Operations and $21.3
million (General Fund) is from the Purchase of Services.
First, this language restricts Regional Centers from using
the same accounting firm more than five times in every
10-year period.
Second, it requires non-governmental entities receiving
payments from Regional Centers to contract with an
independent accounting firm for an audit or review of
financial statements as specified. This would not apply to
payments made using usual and customary rates as contained
in state regulation (Title 17).
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Third, it requires Regional Centers to review the audit
results and take any necessary action to resolve issues.
Other. This bill appropriates $1,000 (General Fund) to the
Department of Developmental Services for State support.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR :
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Donnelly, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Galgiani, Gatto,
Gordon, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma,
Mendoza, Mitchell, Monning, Nestande, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Skinner, Solorio,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
Pérez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Garrick,
Grove, Hagman, Halderman, Jeffries, Knight, Logue,
Mansoor, Miller, Morrell, Smyth, Valadao, Wagner
NO VOTE RECORDED: Gorell, Jones, Nielsen, Silva, Vacancy
GOVERNOR'S VETO MESSAGE:
"I am signing Senate Bill 74 with the following objection:
I am deleting the appropriation in Section 17 of this bill,
which provides $1,000 General Fund to the State Department
of Developmental Services for administrative costs.
Sufficient appropriation authority will be provided in the
Budget Bill; therefore this additional appropriation is
unnecessary."
CTW:kc:nl 3/30/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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