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 all regional center contracts or agreements with contracting entities that provide in-home respite services and that have an annual revenue attributable to in-home 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:
Section 4629.8 is added to the Welfare and
2Institutions Code, to read:
(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.
P3 1(H) Travel directly associated with administrative functions.
2(I) Licenses directly associated with administrative functions.
3(J) Taxes.
4(K) Interest.
5(L) Property insurance.
6(M) Personal liability insurance directly associated with
7administrative functions.
8(N) Depreciation.
9(O) General expenses, including, but not limited to,
10communication costs and supplies directly associated with
11administrative functions.
12(P) Consultants and professional services, including, but not
13limited to, accounting and legal services.
14(Q) Distributions to shareholders.
15(R) Advertising costs.
16(S) Conference, convention, and meeting costs.
17(T) Facility and office equipment costs, including, but not
18limited to, rent, lease, and mortgage payments, directly
associated
19with administrative functions.
20(U) Transfers to a corporate parent or franchisor, including, but
21not limited to, franchise fees, fees for copyright or trademark usage,
22fees for advertising materials, royalty fees, or conference fees.
23(V) Other general operating and overhead costs.
24(2) “Direct service expenditures” means all amounts actually
25paid and all accounts payable, as calculated in accordance with
26generally accepted accounting principles, in the following
27categories:
28(A) Wages and benefits, including state, federal, and local
29payroll taxes, workers’ compensation and unemployment insurance
30premiums, and recruiting, training, orientation, and
background
31checks for respite care aides.
32(B) Expenses substantially similar to those in subparagraph (A)
33that are directly related to the provision of in-home respite services.
34(b) (1) Notwithstanding Section 4629.7 or any other law, all
35regional center contracts or agreements with contracting entities
36that provide in-home respite services and that have an annual
37revenue attributable to in-home respite services provided to
38regional center consumers of at least seven million dollars
39($7,000,000) shall expressly require that at least 85 percent of
P4 1regional center funds be spent on direct service expenditures. Direct
2service expenditures shall not include administrative costs.
3(2) A contracting
entity may meet the annual revenue
4attributable to in-home respite services specified in paragraph (1)
5in either of the following ways:
6(A) The annual revenue of the contracting entity that is
7attributable to in-home respite services provided to regional center
8begin delete consumersend deletebegin insert consumers, excluding financial management services
9and other administrative services,end insert meets or exceeds seven million
10dollars ($7,000,000).
11(B) The annual revenue of the contracting entity’s parent
12organization that is attributable to in-home respite services provided
13to regional center consumers in this state,begin insert
excluding financial
14management services and other administrative services,end insert whether
15earned directly by the parent organization or by subcontractors
16and subsidiaries of the parent organization, meets or exceeds seven
17million dollars ($7,000,000).
18(c) Consistent with subdivision (b), service providers and
19contractors, upon request, shall provide regional centers with access
20to books, documents, papers, computerized data, source documents,
21consumer records, or other records pertaining to the service
22providers’ and contractors’ rates.
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