Amended in Assembly April 21, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1400


Introduced by Assembly Member Santiago

February 27, 2015


An act to add Section 4629.8 to the Welfare and Institutions Code, relating to developmental services.

LEGISLATIVE COUNSEL’S DIGEST

AB 1400, as amended, Santiago. Developmental services: regional center contracts.

Existing law, the Lanterman Developmental Disabilities Services Act, requires the State Department of Developmental Services to enter into contracts with private nonprofit corporations to operate regional centers for the provision of community services and support for persons with developmental disabilities and their families. Existing law sets forth the duties of the regional centers, including, but not limited to, development of individual program plans, the purchase of needed services to implement the plan, and monitoring of the delivery of those services.

Existing law requires the regional center contracts and agreements with service providers in which rates are determined through negotiations between the regional center and the service providers to expressly require that not more than 15% of regional center funds be spent on administrative costs, as defined.

This bill would require allbegin delete regional center contracts or agreements with service providersend deletebegin insert contracting entitiesend insert that provide in-home respite servicesbegin insert and that have an annual revenue attributable to respite services provided to regional center consumers of at least $7,000,000, as specified,end insert to expressly require that at least 85% of regional center funds be spent on direct service expenditures, as defined.

Vote: majority. Appropriation: no. Fiscal committee: begin deleteyes end deletebegin insertnoend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 4629.8 is added to the Welfare and
2Institutions Code
, to read:

3

4629.8.  

(a) For purposes of this section, the following
4definitions apply:

5(1) “Administrative costs” means all costs other than direct
6service expenditures, including all amounts actually paid and all
7accounts payable, as calculated in accordance with generally
8accepted accounting principles, including, but not limited to, all
9of the following:

10(A) Compensation and benefits, including federal, state, and
11local payroll taxes, workers’ compensation and unemployment
12insurance premiums, and recruiting, training, orientation, and
13background checks for managerial personnel whose primary
14purpose is the administrative management of the entity, including,
15but not limited to, directors and chief executive officers.

16(B) Compensation and benefits, including federal, state, and
17local payroll taxes, workers’ compensation and unemployment
18insurance premiums, and recruiting, training, orientation, and
19background checks for employees who perform administrative
20functions, including, but not limited to, payroll management,
21personnel functions, accounting, budgeting, and facility
22management.

23(C) Facility and occupancy costs directly associated with
24administrative functions.

25(D) Maintenance and repair.

26(E) Data processing and computer support services.

27(F) Contract and procurement activities, except those provided
28by a direct service employee.

29(G) Training directly associated with administrative functions.

30(H) Travel directly associated with administrative functions.

31(I) Licenses directly associated with administrative functions.

32(J) Taxes.

33(K) Interest.

P3    1(L) Property insurance.

2(M) Personal liability insurance directly associated with
3administrative functions.

4(N) Depreciation.

5(O) General expenses, including, but not limited to,
6communication costs and supplies directly associated with
7administrative functions.

8(P) Consultants and professional services, including, but not
9limited to, accounting and legal services.

10(Q) Distributions to shareholders.

11(R) Advertising costs.

12(S) Conference, convention, and meeting costs.

13(T) Facility and office equipment costs, including, but not
14limited to, rent, lease, and mortgage payments, directly associated
15with administrative functions.

16(U) Transfers to a corporate parent or franchisor, including, but
17not limited to, franchise fees, fees for copyright or trademark usage,
18fees for advertising materials, royalty fees, or conference fees.

19(V) Other general operating and overhead costs.

20(2) “Direct service expenditures” means all amounts actually
21paid and all accounts payable, as calculated in accordance with
22generally accepted accounting principles, in the following
23categories:

24(A) Wages and benefits, including state, federal, and local
25payroll taxes, workers’ compensation and unemployment insurance
26premiums, and recruiting, training, orientation, and background
27checks for respite care aides.

28(B) Expenses substantially similar to those in subparagraph (A)
29that are directly related to the provision of in-home respite services.

30(b) begin insert(1)end insertbegin insertend insertNotwithstanding Section 4629.7 or any other law,begin delete all
31regional center contracts or agreements with service providersend delete

32begin insert contracting entitiesend insert that provide in-home respite servicesbegin insert and that
33have an annual revenue attributable to respite services provided
34to regional center consumers of at least seven million dollars
35($7,000,000)end insert
shall expressly require that at least 85 percent of
36regional center funds be spent on direct service expenditures. Funds
37spent on direct service expenditures shall not include administrative
38costs.

begin insert

P4    1(2) A contracting entity may meet the annual revenue
2attributable to respite services specified in paragraph (1) in either
3of the following ways:

end insert
begin insert

4(A) The annual revenue of the contracting entity that is
5attributable to respite services provided to regional center
6consumers meets or exceeds seven million dollars ($7,000,000).

end insert
begin insert

7(B) The annual revenue of the contracting entity’s parent
8organization that is attributable to respite services provided to
9regional center consumers in this state, whether earned directly
10by the parent organization or by subcontractors and subsidiaries
11of the parent organization, meets or exceeds seven million dollars
12($7,000,000).

end insert

13(c) Consistent with subdivision (b), service providers and
14contractors, upon request, shall provide regional centers with access
15to books, documents, papers, computerized data, source documents,
16consumer records, or other records pertaining to the service
17providers’ and contractors’ negotiated rates.



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