BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 67
          Author:   Senate Budget and Fiscal Review Committee
          Amended:  5/7/13
          Vote:     21 - Urgency

           
           SENATE BUDGET & FISCAL REVIEW COMMITTEE  :  10-4, 5/9/13
          AYES:  Leno, Beall, Block, DeSaulnier, Hancock, Jackson,  
            Monning, Roth, Wolk, Wright
          NOES:  Emmerson, Anderson, Nielsen, Wyland
          NO VOTE RECORDED:  Berryhill, Price


           SUBJECT  :    Budget Act of 2012:  In-Home Support Services

           SOURCE  :     Author


           DIGEST  :    This bill makes statutory changes needed to  
          effectuate a settlement agreement reached by plaintiffs and the  
          Administration in several lawsuits against the State based on  
          reductions to the In-Home Support Services (IHSS) program  
          enacted in recent years.

           ANALYSIS  :    Among several other changes to IHSS that were  
          adopted in the past four budgets, and that have taken effect, a  
          3.6% across-the-board reduction in authorized hours for all  
          recipients has been in effect since the 2010-11 fiscal year.   
          This reduction is currently scheduled to expire on June 30,  
          2013.  

          In 2010-11, the Budget also included savings that would have  
          resulted from enhanced federal funding obtained as a match on  
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          revenues the State expected to receive and use to fund IHSS from  
          extending the sales tax to support services, including IHSS.   
          IHSS providers would have received a supplemental payment equal  
          to the amount of their new tax liability.  The Department of  
          Health Care Services submitted its plan to implement this  
          funding mechanism to the federal government, but the State has  
          still not received a formal response.

          As summarized in the chart below, several additional reductions  
          to the IHSS program made in the last four state budgets were  
          enjoined by federal courts from taking effect.  


            ---------------------------------------------------------- 
           |               Policy               |   Name of Lawsuit   |
           |                                    |  Enjoining Policy   |
           |                                    | from Taking Effect  |
           |------------------------------------+---------------------|
           |Loss of eligibility for individuals |Oster (V.L.) v.      |
           |with assessed needs below specified |Lightbourne, et al.  |
           |thresholds                          |(Oster I)            |
           |                                    |                     |
           |------------------------------------+---------------------|
           |Across-the-board reduction of 20%   |Oster (V.L.) v.      |
           |of authorized hours, with           |Lightbourne, et al.  |
           |exceptions as specified             |(Oster II)           |
           |                                    |                     |
           |------------------------------------+---------------------|
           |Reduction in state participation in |Dominguez v.         |
           |provider wages (from maximum of     |Schwarzenegger, et   |
           |$12.10 to $10.10 per hour)          |al.                  |
           |                                    |                     |
           |                                    |                     |
            ---------------------------------------------------------- 

          In March 2013, the Administration and plaintiffs in these cases  
          reached a settlement agreement, which a federal district court  
          has tentatively approved.  This bill reflects the language  
          proposed to effectuate the settlement agreement, with some  
          technical, non-substantive changes.  

          This bill:

           1. Repeals the provisions underlying the reductions at issue in  

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             the lawsuits settled by the agreement, including: 

              A.    Provisions that had required the Department of Social  
                Services to implement, under specified circumstances, a  
                20% reduction in authorized hours of service for each IHSS  
                recipient, beginning January 1, 2012, except as specified.  
                 

              B.    Provisions that had reduced the state contribution to  
                IHSS provider wages and benefits from a maximum of $12.10  
                per hour to $10.10 per hour, effective July 1, 2009.  

              C.    Provisions that had established a stricter threshold  
                of need to receive IHSS hours based on a recipient's  
                assessed functional index score (requiring IHSS recipients  
                to have an overall functional index score equal to or  
                greater than two on the five-point scale in order to  
                qualify).  

              D.    Provisions that had established a stricter threshold  
                of need to receive domestic and related care services,  
                such as housework, meal preparation, and laundry  
                (requiring a functional index ranking greater than four  
                for each activity in order to receive service hours).  

           1. Establishes an across-the-board reduction of 8% in  
             authorized hours of IHSS that would apply to all recipients  
             for a period of 12 months, starting July 1, 2013; 

           2. Establishes an ongoing, across-the-board reduction of up to  
             7% in authorized hours of IHSS that would apply to all  
             recipients upon the expiration of the 8% reduction described  
             above, unless it is triggered off, in whole or in part, by an  
             "assessment" on home care services, including IHSS, which  
             results in enhanced federal funding for IHSS.

           3. Specifies with respect to these across-the-board reductions  
             that:

              A.    They shall be applied to the recipient's hours as  
                authorized pursuant to the most recent assessment, and, if  
                applicable, shall be taken first from any documented unmet  
                need.


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              B.    IHSS recipients may direct the manner in which the  
                reduction of hours is applied to previously authorized  
                services.

              C.    If a recipient requests a reassessment based only on  
                the 8% or 7% reductions, his/her request can be  
                administratively denied.  At the same time, this bill  
                reiterates existing law that a county shall assess a  
                recipient's need for supportive services any time the  
                recipient notifies the county of a need for adjustment or  
                when there are other indications of a change in  
                circumstances that affects the recipient's need for  
                services.  

              D.    The notices of action informing recipients of the 8%  
                and 7% reductions shall be mailed at least 10 and 20 days,  
                respectively, prior to the reduction taking effect and  
                include specified information.

              E.    Recipients continue to have all appeal rights as  
                otherwise provided under existing law.

           1. Establishes the intent of the Legislature to enact an  
             assessment on home care services, including IHSS, to offset  
             the up to 7% reduction described above.

           2. Specifies that, to the extent that the assessment is  
             implemented retroactively, any resulting funds shall be used  
             to provide one-time direct reinvestments benefiting IHSS  
             recipients that do not create ongoing General Fund (GF)  
             obligations.  Further, specifies that the fund created to  
             receive those retroactive resources shall be continuously  
             appropriated after specified notice or legislative approval  
             requirements, as applicable, are met.

           3. Specifies that the Department of Health Care Services and  
             Department of Social Services may implement and administer  
             its provisions through all-county letters or similar  
             instructions until regulations are adopted, as specified.

           4. Makes an appropriation and declares this bill to take effect  
             immediately as a bill providing for appropriations related to  
             the Budget Bill.


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           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Budget and Fiscal Review Committee, the  
          Administration estimates that the 8% and 7% across-the-board  
          reductions in 2013-14 and 2014-15 would save approximately $160  
          million GF and $159 million GF, respectively.  


          JA:k  5/10/13   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

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