Amended in Assembly May 6, 2015

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 insert regional center contracts or agreements withend insert contracting entities that provide in-home respite services and that have an annual revenue attributable tobegin insert in-homeend insert respite services provided to regional center consumers of at least $7,000,000, as specified, 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: no. State-mandated local program: no.

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

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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.

P3    1(J) Taxes.

2(K) Interest.

3(L) Property insurance.

4(M) Personal liability insurance directly associated with
5administrative functions.

6(N) Depreciation.

7(O) General expenses, including, but not limited to,
8communication costs and supplies directly associated with
9administrative functions.

10(P) Consultants and professional services, including, but not
11limited to, accounting and legal services.

12(Q) Distributions to shareholders.

13(R) Advertising costs.

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

15(T) Facility and office equipment costs, including, but not
16limited to, rent, lease, and mortgage payments, directly associated
17with administrative functions.

18(U) Transfers to a corporate parent or franchisor, including, but
19not limited to, franchise fees, fees for copyright or trademark usage,
20fees for advertising materials, royalty fees, or conference fees.

21(V) Other general operating and overhead costs.

22(2) “Direct service expenditures” means all amounts actually
23paid and all accounts payable, as calculated in accordance with
24generally accepted accounting principles, in the following
25categories:

26(A) Wages and benefits, including state, federal, and local
27payroll taxes, workers’ compensation and unemployment insurance
28premiums, and recruiting, training, orientation, and background
29checks for respite care aides.

30(B) Expenses substantially similar to those in subparagraph (A)
31that are directly related to the provision of in-home respite services.

32(b) (1) Notwithstanding Section 4629.7 or any other law,begin insert all
33regional center contracts or agreements with end insert
contracting entities
34that provide in-home respite services and that have an annual
35revenue attributable tobegin insert in-homeend insert respite services provided to regional
36center consumers of at least seven million dollars ($7,000,000)
37shall expressly require that at least 85 percent of regional center
38funds be spent on direct service expenditures.begin delete Funds spent on directend delete
39begin insert Directend insert service expenditures shall not include administrative costs.

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

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

7(B) The annual revenue of the contracting entity’s parent
8organization that is attributable tobegin insert in-homeend insert respite services provided
9to regional 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).

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’begin delete negotiatedend delete rates.



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