BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 67| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED SB 67 Page 2 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 CONTINUED SB 67 Page 3 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. CONTINUED SB 67 Page 4 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. CONTINUED SB 67 Page 5 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 **** END **** CONTINUED