Amended in Senate September 3, 2015

Amended in Senate August 26, 2015

California Legislature—2015–16 Second Extraordinary Session

Senate BillNo. 1


Introduced by Senator Beall

(Principal coauthors: Senators Monning and Pavley)

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(Coauthors: Senators Block, Hertzberg, Hueso, and Mendoza)

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July 2, 2015


An act to amend Sections 4648.4,begin insert 4652.5,end insert 4681.3, 4681.6, 4688.21, 4689.8, 4691.9, and 4860, and to add Sections 4681.2, 4690.7, 4795, and 4796 to, the Welfare and Institutions Code, relating to developmental services.

LEGISLATIVE COUNSEL’S DIGEST

SB 1, as amended, Beall. Developmental services: funding.

(1) The Lanterman Developmental Disabilities Services Act requires the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities. Under existing law, the regional centers purchase needed services for individuals with developmental disabilities through approved service providers or arrange for those services through other publicly funded agencies. The annual Budget Act also appropriates funds to the department to fund regional center operations.

This bill would require the department, subject to an appropriation by the Legislature for these purposes, to increase the funding paid to a regional center for the regional center’s operating budget by 10%, and to increase funding to enable the regional center and the regional center’s purchase-of-service vendors to fund certain costs related to minimum wage requirements. The bill would also require the department to develop a 10-year financial sustainability plan to ensure that the state’s community-based developmental services system effectively serves all individuals with developmental disabilities.

(2) Existing law establishes specified rates to be paid to certain service providers and the rates to be paid for certain developmental services. Existing law requires that rates to be paid to other developmental service providers either be set by the department or negotiated between the regional center and the service provider.

This bill would increase the rates established by existing law by 10%, as specified, and would require a 10% increase to the rates set by the department and the rates negotiated between regional centers and service providers, as specified.

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(3) Existing law requires an entity that receives payments between $250,000 and $500,000 per year from one or more regional centers to obtain either an independent audit or independent review report of its financial statements and requires an entity that receives payments that are equal to or more than $500,000 per year to obtain an independent audit. Existing law exempts payments made using usual and customary rates for services provided by regional centers from these requirements.

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This bill would instead require an entity to obtain only an independent review report of its financial statements relating to payments made by regional centers if it receives payments between $250,000 and $2,000,000 from one or more regional centers and would authorize these entities to apply for, and require the regional center to grant, a 2-year exemption from this requirement if the regional center does not find issues in the prior year’s independent review report that have an impact on regional center services. The bill would also require an entity to obtain an independent audit of its financial statements relating to payments made by regional centers if it receives payments that are equal to or more than $2,000,000 and would authorize these entities to apply for, and require the regional center to grant, a 2-year exemption from the audit requirement if the prior year’s audit resulted in an unmodified opinion, an unmodified opinion with additional communication, or a qualified opinion with issues that are not material and pervasive. The bill would require a regional center to notify the department of any exemption it grants to an entity that receives a qualified opinion report. The bill would also exempt social security benefit payments from these requirements.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P3    1

SECTION 1.  

Section 4648.4 of the Welfare and Institutions
2Code
is amended to read:

3

4648.4.  

(a) Notwithstanding any other law, commencing July
41, 2006, rates for services listed in paragraphs (1), (2), with the
5exception of travel reimbursement, (3) to (8), inclusive, (10), and
6(11) of subdivision (b), shall be increased by 3 percent, subject to
7funds specifically appropriated for this increase in the Budget Act
8of 2006. The increase shall be applied as a percentage, and the
9percentage shall be the same for all providers. Any subsequent
10change shall be governed by subdivision (b).

11(b) Notwithstanding any other law, except for subdivision (a),
12no regional center may pay any provider of the following services
13or supports a rate that is greater than the rate that is in effect on or
14after June 30, 2008, unless the increase is required by a contract
15between the regional center and the vendor that is in effect on June
1630, 2008, or the regional center demonstrates that the approval is
17necessary to protect the consumer’s health or safety and the
18department has granted prior written authorization:

19(1) Supported living services.

20(2) Transportation, including travel reimbursement.

21(3) Socialization training programs.

22(4) Behavior intervention training.

23(5) Community integration training programs.

24(6) Community activities support services.

25(7) Mobile day programs.

26(8) Creative art programs.

27(9) Supplemental day services program supports.

28(10) Adaptive skills trainers.

29(11) Independent living specialists.

30(c) Notwithstanding subdivisions (a) and (b), and subject to an
31appropriation of funds by the Legislature for these purposes, a
32regional center shall increase rates for services listed in paragraphs
33(1), (2), with the exception of travel reimbursement, and (3) to
34(11), inclusive, of subdivision (b), if the rates are determined
35through a negotiation between the regional center and the provider,
P4    1by 10 percent above the levels that otherwise would have been in
2effect on the effective date of the act that added this subdivision,
3unless the rate for a service was increased pursuant to another
4provision of the act that added this subdivision.

5begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 4652.5 of the end insertbegin insertWelfare and Institutions Codeend insert
6begin insert is amended to read:end insert

7

4652.5.  

(a) (1) An entitybegin delete receivingend deletebegin insert that receivesend insert payments
8from one or more regional centers shall contract with an
9independent accounting firmbegin delete forend deletebegin insert to obtainend insert anbegin insert independentend insert audit or
10review of its financial statementsbegin insert relating to payments made by
11 regional centers,end insert
subject tobegin delete allend deletebegin insert bothend insert of the following:

12(A) begin deleteWhen end deletebegin insertIf end insertthe amount received from the regional center or
13regional centers during the entity’s fiscal year is more than or equal
14to two hundred fifty thousand dollars ($250,000)begin delete but less than five
15hundred thousand dollars ($500,000),end delete
begin insert but less than two million
16dollars ($2,000,000),end insert
the entity shall obtain anbegin delete independent audit
17orend delete
independent review report of its financial statements for the
18period. Consistent with Subchapter 21 (commencing with Section
1958800)begin insert of Chapter 3 of Division 2end insert of Title 17 of the California
20Code of Regulations, this subdivision shall also apply to work
21activity program providers receiving less than two hundred fifty
22thousand dollars ($250,000).

23(B) begin deleteWhen end deletebegin insertIf end insertthe amount received from the regional center or
24regional centers during the entity’s fiscal year is equal to or more
25thanbegin delete five hundred thousand dollars ($500,000),end deletebegin insert two million dollars
26($2,000,000),end insert
the entity shall obtain an independent audit of its
27financial statements for the period.

28(2) This requirement does not apply to payments made using
29usual and customary rates, as defined by Title 17 of the California
30Code of Regulations, for services provided by regionalbegin delete centers.end deletebegin insert end insert
31begin insertcenters or social security benefit payments.end insert

32(3) This requirement does not apply to state and local
33governmental agencies, the University of California, or the
34California State University.

35(b) An entity subject to subdivision (a) shall provide copies of
36the independent audit or independent review report required by
37subdivision (a), and accompanying management letters, to the
38vendoring regional center withinbegin delete 30 days after completion of the
39audit or review.end delete
begin insert nine months of the end of the fiscal year for the
40entity.end insert

P5    1(c) Regional centersbegin delete receivingend deletebegin insert that receiveend insert the audit or review
2reports required by subdivision (b) shall review and require
3resolution by the entity for issues identified in the report that have
4an impact on regional center services. Regional centers shall take
5appropriate action, up to termination of vendorization, for lack of
6adequate resolution of issues.

7(d) Regional centers shall notify the department of all qualified
8opinion reports or reports noting significant issues that directly or
9indirectly impact regional center services within 30 days after
10receipt. Notification shall include a plan for resolution of issues.

11(e) For purposes of this section, an independent review of
12financial statementsbegin delete mustend deletebegin insert shallend insert be performed by an independent
13accounting firm and shall cover, at a minimum, all of the following:

14(1) An inquiry as to the entity’s accounting principles and
15practices and methods used in applying them.

16(2) An inquiry as to the entity’s procedures for recording,
17classifying, and summarizing transactions and accumulating
18information.

19(3) Analytical procedures designed to identify relationships or
20items that appear to be unusual.

21(4) An inquiry about budgetary actions taken at meetings of the
22board of directors or other comparable meetings.

23(5) An inquiry about whether the financial statements have been
24properly prepared in conformity with generally accepted accounting
25principles and whether any events subsequent to the date of the
26financial statements would have a material effect on the statements
27under review.

28(6) Working papers prepared in connection with a review of
29financial statements describing the items covered as well as any
30unusual items, including their disposition.

31(f) For purposes of this section, an independent review report
32shall cover, at a minimum, all of the following:

33(1) Certification that the review was performed in accordance
34with standards established by the American Institute of Certified
35Public Accountants.

36(2) Certification that the statements are the representations of
37management.

38(3) Certification that the review consisted of inquiries and
39analytical procedures that are lesser in scope than those of an audit.

P6    1(4) Certification that the accountant is not aware of any material
2modifications that need to be made to the statements for them to
3be in conformity with generally accepted accounting principles.

4(g) The department shall not consider a request for adjustments
5to rates submitted in accordance with Title 17 of the California
6Code of Regulations by an entity receiving payments from one or
7more regional centers solely to fund either anticipated or
8unanticipated changes required to comply with this section.

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9(h) (1) An entity required to obtain an independent review
10report of its financial statement pursuant to subparagraph (A) of
11paragraph (1) of subdivision (a) may apply to the regional center
12for, and the regional center shall grant, a two-year exemption from
13the independent review report requirement if the regional center
14does not find issues in the prior year’s independent review report
15that have an impact on regional center services.

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16(2) An entity required to obtain an independent audit of its
17financial statements pursuant to subparagraph (B) of paragraph
18(1) of subdivision (a) may apply to the regional center for an
19exemption from the independent audit requirement, subject to both
20of the following conditions:

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21(A) If the independent audit for the prior year resulted in an
22unmodified opinion or an unmodified opinion with additional
23communication, the regional center shall grant the entity a
24two-year exemption.

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25(B) If the independent audit for the prior year resulted in a
26qualified opinion and the issues are not material and pervasive,
27the regional center shall grant the entity a two-year exemption.
28However, the entity and the regional center shall continue to
29address issues raised in this independent audit, regardless of
30whether the exemption is granted.

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31(3) A regional center shall notify the department of any
32exemption it grants to an entity that receives a qualified opinion
33report.

end insert
34begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 4681.2 is added to the end insertbegin insertWelfare and Institutions
35Code
end insert
begin insert, to read:end insert

begin insert
36

begin insert4681.2.end insert  

Notwithstanding any other law, and subject to an
37appropriation of funds by the Legislature for these purposes, the
38department shall increase the rates set for community care facilities
39serving persons with developmental disabilities by 10 percent
P7    1above the levels that otherwise would have been in effect on the
2effective date of the act that added this section.

end insert
3

begin deleteSEC. 2.end delete
4begin insertSEC. 4.end insert  

Section 4681.3 of the Welfare and Institutions Code
5 is amended to read:

6

4681.3.  

(a) Notwithstanding any other provision of this article,
7for the 1996-97 fiscal year, the rate schedule authorized by the
8department in operationbegin insert onend insert June 30, 1996, shall be increased based
9upon the amount appropriated in the Budget Act of 1996 for that
10purpose. The increase shall be applied as a percentage, and the
11percentage shall be the same for all providers.

12(b) Notwithstanding any other provision of this article, for the
131997-98 fiscal year, the rate schedule authorized by the department
14in operation on June 30, 1997, shall be increased based upon the
15amount appropriated in the Budget Act of 1997 for that purpose.
16The increase shall be applied as a percentage, and the percentage
17shall be the same for all providers.

18(c) Notwithstanding any other provision of this article, for the
191998-99 fiscal year, the rate schedule authorized by the department
20in operation on June 30, 1998, shall be increased commencing July
211, 1998, based upon the amount appropriated in the Budget Act
22of 1998 for that purpose. The increase shall be applied as a
23percentage, and the percentage shall be the same for all providers.

24(d) Notwithstanding any other provision of this article, for the
251998-99 fiscal year, the rate schedule authorized by the department
26in operation on December 31, 1998, shall be increased January 1,
271999, based upon the cost-of-living adjustments in the
28Supplemental Security Income/State Supplementary Program for
29the Aged, Blind, and Disabled appropriated in the Budget Act of
301998 for that purpose. The increase shall be applied as a percentage
31and the percentage shall be the same for all providers.

32(e) Notwithstanding any other provision of this article, for the
331999-2000 fiscal year, the rate schedule authorized by the
34department in operation on June 30, 1999, shall be increased July
351, 1999, based upon the amount appropriated in the Budget Act
36of 1999 for that purpose. The increase shall be applied as a
37percentage and the percentage shall be the same for all providers.

38(f) In addition, commencing January 1, 2000, any funds available
39from cost-of-living adjustments in the Supplemental Security
40Income/State Supplementary Payment (SSI/SSP) for the 1999-2000
P8    1fiscal year shall be used to further increase the community care
2facility rate. The increase shall be applied as a percentage, and the
3percentage shall be the same for all providers.

4(g) Notwithstanding any other law, for the 2006-07 fiscal year,
5the rate schedule in effect on June 30, 2006, shall be increased on
6July 1, 2006, by 3 percent, subject to funds specifically
7appropriated for this increase in the Budget Act of 2006. The
8increase shall be applied as a percentage and the percentage shall
9be the same for all providers. Any subsequent increase shall be
10governed by Sections 4681.5 and 4681.6.

11(h) Notwithstanding any other law, for the 2015-16 fiscal year,
12the rate schedule and rates set by the department that are in effect
13on June 30, 2015, shall be increased by 10 percent, subject to funds
14specifically appropriated for this purpose. The increase shall be
15applied as a percentage and the percentage shall be the same for
16all providers. The increase required by this subdivision shall be in
17addition to the rate changes required by Chapter 23 of the Statutes
18of 2015.

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SEC. 3.  

Section 4681.2 is added to the Welfare and Institutions
20Code
, to read:

21

4681.2.  

Notwithstanding any other law, and subject to an
22appropriation of funds by the Legislature for these purposes, the
23department shall increase the rates set for community care facilities
24serving persons with developmental disabilities by 10 percent
25above the levels that otherwise would have been in effect on the
26effective date of the act that added this section.

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27

begin deleteSEC. 4.end delete
28begin insertSEC. 5.end insert  

Section 4681.6 of the Welfare and Institutions Code
29 is amended to read:

30

4681.6.  

(a) Notwithstanding any other law, commencing July
311, 2008:

32(1) A regional center shall not pay an existing residential service
33provider, for services for which rates are determined through a
34negotiation between the regional center and the provider, a rate
35higher than the rate in effect on June 30, 2008, unless the increase
36is required by a contract between the regional center and the vendor
37that is in effect on June 30, 2008, or the regional center
38demonstrates that the approval is necessary to protect the
39consumer’s health or safety and the department has granted prior
40written authorization.

P9    1(2) A regional center shall not negotiate a rate with a new
2residential service provider, for services for which rates are
3determined through a negotiation between the regional center and
4the provider, that is higher than the regional center’s median rate
5for the same service code and unit of service, or the statewide
6median rate for the same service code and unit of service,
7whichever is lower. The unit of service designation shall conform
8with an existing regional center designation or, if none exists, a
9designation used to calculate the statewide median rate for the
10same service. The regional center shall annually certify to the
11department its median rate for each negotiated rate service code,
12by designated unit of service. This certification shall be subject to
13verification through the department’s biennial fiscal audit of the
14regional center.

15(b) Notwithstanding subdivision (a), commencing July 1, 2014,
16regional centers may negotiate a rate adjustment with residential
17service providers regarding rates that are otherwise restricted
18pursuant to subdivision (a), if the adjustment is necessary in order
19to pay employees no less than the minimum wage as established
20by Section 1182.12 of the Labor Code, as amended by Chapter
21351 of the Statutes of 2013, and only for the purpose of adjusting
22payroll costs associated with the minimum wage increase. The
23rate adjustment shall be specific to the unit of service designation
24that is affected by the increased minimum wage, shall be specific
25to payroll costs associated with any increase necessary to adjust
26employee pay only to the extent necessary to bring pay into
27compliance with the increased state minimum wage, and shall not
28be used as a general wage enhancement for employees paid above
29the minimum wage. Regional centers shall maintain documentation
30on the process to determine, and the rationale for granting, any
31rate adjustment associated with the minimum wage increase.

32(c) Notwithstanding subdivision (a), commencing July 1, 2015,
33regional centers may negotiate a rate adjustment with residential
34service providers regarding rates that are otherwise restricted
35pursuant to subdivision (a), if the adjustment is necessary to
36implement Article 1.5 (commencing with Section 245) of Chapter
371 of Part 1 of Division 2 of the Labor Code, as added by Chapter
38317 of the Statutes of 2014. The rate adjustment may be applied
39only if a minimum of 24 hours or three days of paid sick leave per
40year was not a benefit provided to employees as of June 30, 2015,
P10   1and shall be specific to payroll costs associated with any increase
2necessary to compensate an employee up to a maximum of 24
3hours or three days of paid sick leave in each year of employment.

4(d) Notwithstanding subdivision (a), and subject to an
5appropriation of funds by the Legislature for these purposes,
6regional centers shall increase the rates paid to residential service
7providers, for services for which rates are determined through a
8negotiation between the regional center and the provider, by 10
9percent above the levels that otherwise would have been in effect
10on the effective date of the act that added this subdivision.

11(e) For purposes of this section, “residential service provider”
12includes Adult Residential Facilities for Persons with Special
13Health Care Needs, as described in Section 4684.50.

14(f) This section shall not apply to those services for which rates
15are determined by the State Department of Health Care Services,
16or the State Department of Developmental Services, or are usual
17and customary.

18

begin deleteSEC. 5.end delete
19begin insertSEC. 6.end insert  

Section 4688.21 of the Welfare and Institutions Code
20 is amended to read:

21

4688.21.  

(a) The Legislature places a high priority on
22opportunities for adults with developmental disabilities to choose
23and customize day services to meet their individualized needs;
24have opportunities to further the development or maintenance of
25employment and volunteer activities; direct their services; pursue
26postsecondary education; and increase their ability to lead
27integrated and inclusive lives. To further these goals, a consumer
28may choose a tailored day service or vouchered community-based
29training service, in lieu of any other regional center vendored day
30program, look-alike day program, supported employment program,
31or work activity program.

32(b) (1) A tailored day service shall do both of the following:

33(A) Include an individualized service design, as determined
34through the individual program plan (IPP) and approved by the
35regional center, that maximizes the consumer’s individualized
36choices and needs. This service design may include, but may not
37be limited to, the following:

38(i) Fewer days or hours than in the program’s approved day
39program, look-alike day program, supported employment program,
40or work activity program design.

P11   1(ii) Flexibility in the duration and intensity of services to meet
2the consumer’s individualized needs.

3(B) Encourage opportunities to further the development or
4maintenance of employment, volunteer activities, or pursuit of
5postsecondary education; maximize consumer direction of the
6service; and increase the consumer’s ability to lead an integrated
7and inclusive life.

8(2) The type and amount of tailored day service shall be
9determined through the IPP process, pursuant to Section 4646.
10The IPP shall contain, but not be limited to, the following:

11(A) A detailed description of the consumer’s individualized
12choices and needs and how these choices and needs will be met.

13(B) The type and amount of services and staffing needed to
14meet the consumer’s individualized choices and needs, and unique
15health and safety and other needs.

16(3) The staffing requirements set forth in Section 55756 of Title
1717 of the California Code of Regulations and subdivision (r) of
18Section 4851 of this code shall not apply to a tailored day service.

19(4) For currently vendored programs wishing to offer a tailored
20day service option, the regional center shall vendor a tailored day
21service option upon negotiating a rate and maximum units of
22service design that includes, but is not limited to, the following:

23(A) A daily or hourly rate and maximum units of service design
24that does not exceed the equivalent cost of four days per week of
25 the vendor’s current rate, if the vendor has a daily day program
26rate.

27(B) A rate and maximum units of service design that does not
28exceed the equivalent cost of four-fifths of the hours of the vendor’s
29current rate, if the vendor has an hourly rate.

30(5) The regional center shall ensure that the vendor is capable
31of complying with, and will comply with, the consumer’s IPP,
32individual choice, and health and safety needs.

33(6) For new programs wishing to offer a tailored day service
34option, the regional center shall vendor a tailored day service option
35upon negotiating a rate and maximum units of service design. The
36rate paid to the new vendor shall not exceed four-fifths of the
37temporary payment rate or the median rate, whichever is applicable.

38(7) Notwithstanding any other law, and subject to an
39appropriation of funds by the Legislature for these purposes, the
40rates paid to tailored day service providers shall be increased by
P12   110 percent above the levels that otherwise would have been in
2effect on the effective date of the act that added this paragraph.

3(8) Effective July 1, 2011, and prior to the time of development,
4review, or modification of a consumer’s IPP, regional centers shall
5provide information about tailored day service to eligible adult
6consumers. A consumer may request information about tailored
7day services from the regional center at any time and may request
8an IPP meeting to secure those services.

9(c) (1) A vouchered community-based training service is
10defined as a consumer-directed service that assists the consumer
11in the development of skills required for community integrated
12employment or participation in volunteer activities, or both, and
13the assistance necessary for the consumer to secure employment
14or volunteer positions or pursue secondary education.

15(2) Implementation of vouchered community-based training
16service is contingent upon the approval of the federal Centers for
17Medicare and Medicaid Services.

18(3) Vouchered community-based training service shall be
19provided in natural environments in the community, separate from
20the consumer’s residence.

21(4) A consumer, parent, or conservator vendored as a vouchered
22community-based training service shall utilize the services of a
23financial management services (FMS) entity. The regional center
24shall provide information about available financial management
25services and shall assist the consumer in selecting a FMS vendor
26to act as coemployer.

27(5) A parent or conservator shall not be the direct support worker
28employed by the vouchered community-based training service
29vendor.

30(6) If the direct support worker is required to transport the
31consumer, the vouchered community-based training service vendor
32shall verify that the direct support worker can transport the
33consumer safely and has a valid California driver’s license and
34proof of insurance.

35(7) (A) The rate for vouchered community-based training
36service shall not exceed thirteen dollars and forty-seven cents
37($13.47) per hour. The rate includes employer-related taxes and
38all transportation needed to implement the service, except as
39described in paragraph (8). The rate does not include the cost of
40the FMS.

P13   1(B) Notwithstanding subparagraph (A), and subject to an
2appropriation of funds by the Legislature for these purposes, the
3rate described in subparagraph (A) shall be fourteen dollars and
4eighty-two cents ($14.82) per hour.

5(8) A consumer vendored as a vouchered community-based
6training service shall also be eligible for a regional center-funded
7bus pass, if appropriate and needed.

8(9) Vouchered community-based training service shall be limited
9to a maximum of 150 hours per quarter. The services to be provided
10and the service hours shall be documented in the consumer’s IPP.

11(10) A direct support worker of vouchered community-based
12training service shall be an adult who possesses the skill, training,
13and experience necessary to provide services in accordance with
14the IPP.

15(11) Effective July 1, 2011, and prior to the time of development,
16review, or modification of a consumer’s IPP, regional centers shall
17provide information about vouchered community-based training
18service to eligible adult consumers. A consumer may request
19information about vouchered community-based training service
20from the regional center at any time and may request an IPP
21meeting to secure those services.

22(12) The type and amount of vouchered community-based
23training service shall be determined through the IPP process
24pursuant to Section 4646. The IPP shall contain, but not be limited
25to, the following:

26(A) A detailed description of the consumer’s individualized
27choices and needs and how these choices and needs will be met.

28(B) The type and amount of services and staffing needed to
29meet the consumer’s individualized choices and unique health and
30safety and other needs.

31(d) The department may adopt emergency regulations for
32tailored day service or vouchered community-based training
33service. The adoption, amendment, repeal, or readoption of a
34regulation authorized by this subdivision is deemed to be necessary
35for the immediate preservation of the public peace, health and
36safety, or general welfare, for purposes of Sections 11346.1 and
3711349.6 of the Government Code, and the department is hereby
38exempted from the requirement that it describe specific facts
39showing the need for immediate action. A certificate of compliance
40for these implementing regulations shall be filed within 24 months
P14   1following the adoption of the first emergency regulations filed
2pursuant to this subdivision.

3

begin deleteSEC. 6.end delete
4begin insertSEC. 7.end insert  

Section 4689.8 of the Welfare and Institutions Code
5 is amended to read:

6

4689.8.  

(a) Notwithstanding any other law, commencing July
71, 2008:

8(1) A regional center shall not pay an existing supported living
9service provider, for services for which rates are determined
10through a negotiation between the regional center and the provider,
11a rate higher than the rate in effect on June 30, 2008, unless the
12increase is required by a contract between the regional center and
13the vendor that is in effect on June 30, 2008, or the regional center
14demonstrates that the approval is necessary to protect the
15consumer’s health or safety and the department has granted prior
16written authorization.

17(2) A regional center shall not negotiate a rate with a new
18supported living service provider, for services for which rates are
19determined through a negotiation between the regional center and
20the provider, that is higher than the regional center’s median rate
21for the same service code and unit of service, or the statewide
22median rate for the same service code and unit of service,
23whichever is lower. The unit of service designation shall conform
24with an existing regional center designation or, if none exists, a
25designation used to calculate the statewide median rate for the
26same service. The regional center shall annually certify to the State
27Department of Developmental Services its median rate for each
28negotiated rate service code, by designated unit of service. This
29certification shall be subject to verification through the
30department’s biennial fiscal audit of the regional center.

31(b) Notwithstanding subdivision (a), and subject to an
32appropriation of funds by the Legislature for these purposes,
33regional centers shall increase the rates paid to supported living
34service providers, for services for which rates are determined
35through a negotiation between the regional center and the provider,
36by 10 percent above the levels that otherwise would have been in
37effect on the effective date of the act that added this subdivision.

38

begin deleteSEC. 7.end delete
39begin insertSEC. 8.end insert  

Section 4690.7 is added to the Welfare and Institutions
40Code
, to read:

P15   1

4690.7.  

begin delete(a)end deletebegin deleteend deleteNotwithstanding any other law, and subject to an
2appropriation of funds by the Legislature for these purposes, the
3department shall increase the rates set for nonresidential service
4providers by 10 percent above the levels that otherwise would have
5been in effect on the effective date of the act that added this section.

6

begin deleteSEC. 8.end delete
7begin insertSEC. 9.end insert  

Section 4691.9 of the Welfare and Institutions Code
8 is amended to read:

9

4691.9.  

(a) Notwithstanding any other law, commencing July
101, 2008:

11(1) A regional center shall not pay an existing service provider,
12for services where rates are determined through a negotiation
13between the regional center and the provider, a rate higher than
14the rate in effect on June 30, 2008, unless the increase is required
15by a contract between the regional center and the vendor that is in
16effect on June 30, 2008, or the regional center demonstrates that
17the approval is necessary to protect the consumer’s health or safety
18and the department has granted prior written authorization.

19(2) A regional center shall not negotiate a rate with a new service
20provider, for services where rates are determined through a
21negotiation between the regional center and the provider, that is
22higher than the regional center’s median rate for the same service
23code and unit of service, or the statewide median rate for the same
24service code and unit of service, whichever is lower. The unit of
25service designation shall conform with an existing regional center
26designation or, if none exists, a designation used to calculate the
27statewide median rate for the same service. The regional center
28shall annually certify to the State Department of Developmental
29Services its median rate for each negotiated rate service code, by
30designated unit of service. This certification shall be subject to
31verification through the department’s biennial fiscal audit of the
32regional center.

33(b) Notwithstanding subdivision (a), commencing July 1, 2014,
34regional centers may negotiate a rate adjustment with providers
35regarding rates if the adjustment is necessary in order to pay
36employees no less than the minimum wage as established by
37Section 1182.12 of the Labor Code, as amended by Chapter 351
38of the Statutes of 2013, and only for the purpose of adjusting
39payroll costs associated with the minimum wage increase. The
40rate adjustment shall be specific to the unit of service designation
P16   1that is affected by the increased minimum wage, shall be specific
2to payroll costs associated with any increase necessary to adjust
3employee pay only to the extent necessary to bring pay into
4compliance with the increased state minimum wage, and shall not
5be used as a general wage enhancement for employees paid above
6the increased minimum wage. Regional centers shall maintain
7documentation on the process to determine, and the rationale for
8granting, any rate adjustment associated with the minimum wage
9 increase.

10(c) Notwithstanding any other law or regulation, commencing
11January 1, 2015, rates for personal assistance and supported living
12services in effect on December 31, 2014, shall be increased by
135.82 percent, subject to funds specifically appropriated for this
14increase for costs due to changes in federal regulations
15implementing the federal Fair Labor Standards Act of 1938 (29
16U.S.C. Sec. 201 et seq.). The increase shall be applied as a
17percentage, and the percentage shall be the same for all applicable
18providers. As used in this subdivision, both of the following
19definitions shall apply:

20(1) “Personal assistance” is limited only to those services
21provided by vendors classified by the regional center as personal
22assistance providers, pursuant to the miscellaneous services
23provisions contained in Title 17 of the California Code of
24Regulations.

25(2) “Supported living services” are limited only to those services
26defined as supported living services in Title 17 of the California
27Code of Regulations.

28(d) Notwithstanding subdivision (a), commencing July 1, 2015,
29regional centers may negotiate a rate adjustment with existing
30service providers for services for which rates are determined
31through negotiation between the regional center and the provider,
32if the adjustment is necessary to implement Article 1.5
33(commencing with Section 245) of Chapter 1 of Part 1 of Division
342 of the Labor Code, as added by Chapter 317 of the Statutes of
352014. The rate adjustment may be applied only if a minimum of
3624 hours or three days of paid sick leave per year was not a benefit
37provided to employees as of June 30, 2015, and shall be specific
38to payroll costs associated with any increase necessary to
39compensate an employee up to a maximum of 24 hours or three
40days of paid sick leave in each year of employment.

P17   1(e) Notwithstanding subdivision (a), and subject to an
2appropriation of funds by the Legislature for these purposes,
3regional centers shall increase the rates paid to service providers,
4for services for which rates are determined through a negotiation
5between the regional center and the provider, by 10 percent above
6the levels that otherwise would have been in effect on the effective
7date of the act that added this subdivision.

8(f) This section shall not apply to those services for which rates
9are determined by the State Department of Health Care Services,
10or the State Department of Developmental Services, or are usual
11and customary.

12

begin deleteSEC. 9.end delete
13begin insertSEC. 10.end insert  

Section 4795 is added to the Welfare and Institutions
14Code
, to read:

15

4795.  

(a) The department shall, subject to an appropriation of
16funds by the Legislature for these purposes, increase the funding
17provided to a regional center for the regional center’s operating
18budget by 10 percent above the levels that otherwise would have
19been in effect on the effective date of the act that added this section.

20(b) The department shall, subject to an appropriation of funds
21by the Legislature for these purposes, increase the funding provided
22to a regional center to enable the regional center and regional
23center’s purchase-of-service vendors to fund all of the following
24costs associated with minimum wage requirements:

25(1) The costs to comply with a statewide minimum wage
26requirement.

27(2) The costs to comply with minimum wage requirements
28enacted by local governments that exceed the statewide minimum
29wage.

30(3) The costs to increase compensation for exempt, salaried
31employees to comply with wage orders issued by the Industrial
32Welfare Commission or any other state regulatory agency.

33(4) Any other wage adjustments that vendors are required to
34make in response to minimum wage increases mandated by state
35or federal statutes, regulations, or other authorities.

36

begin deleteSEC. 10.end delete
37begin insertSEC. 11.end insert  

Section 4796 is added to the Welfare and Institutions
38Code
, to read:

39

4796.  

The department shall develop a 10-year financial
40sustainability plan to ensure that the state’s community-based
P18   1developmental services system effectively serves all individuals
2with developmental disabilities.

3

begin deleteSEC. 11.end delete
4begin insertSEC. 12.end insert  

Section 4860 of the Welfare and Institutions Code is
5amended to read:

6

4860.  

(a) (1) (A) The hourly rate for supported employment
7services provided to consumers receiving individualized services
8shall be thirty dollars and eighty-two cents ($30.82).

9(B) Notwithstanding subparagraph (A), and subject to an
10appropriation of funds by the Legislature for these purposes, the
11rate described in subparagraph (A) shall be thirty-three dollars and
12ninety cents ($33.90).

13(2) Job coach hours spent in travel to consumer worksites may
14be reimbursable for individualized services only when the job
15coach travels from the vendor’s headquarters to the consumer’s
16worksite or from one consumer’s worksite to another, and only
17when the travel is one way.

18(b) (1) The hourly rate for group services shall be thirty dollars
19and eighty-two cents ($30.82), regardless of the number of
20consumers served in the group. Consumers in a group shall be
21scheduled to start and end work at the same time, unless an
22exception that takes into consideration the consumer’s compensated
23work schedule is approved in advance by the regional center. The
24 department, in consultation with stakeholders, shall adopt
25regulations to define the appropriate grounds for granting these
26exceptions. When the number of consumers in a supported
27employment placement group drops to fewer than the minimum
28required in subdivision (r) of Section 4851, the regional center
29may terminate funding for the group services in that group, unless,
30within 90 days, the program provider adds one or more regional
31centers, or Department of Rehabilitation-funded supported
32employment consumers to the group.

33(2) Notwithstanding paragraph (1), and subject to an
34appropriation of funds by the Legislature for these purposes, the
35rate described in paragraph (1) shall be thirty-three dollars and
36ninety cents ($33.90).

37(c) Job coaching hours for group services shall be allocated on
38a prorated basis between a regional center and the Department of
39Rehabilitation when regional center and Department of
40Rehabilitation consumers are served in the same group.

P19   1(d) When Section 4855 applies, fees shall be authorized for the
2following:

3(1) (A) A three-hundred-sixty-dollar ($360) fee shall be paid
4to the program provider upon intake of a consumer into a supported
5employment program. No fee shall be paid if that consumer
6completed a supported employment intake process with that same
7supported employment program within the previous 12 months.

8(B) Notwithstanding subparagraph (A), and subject to an
9appropriation of funds by the Legislature for these purposes, the
10fee described in subparagraph (A) shall be three hundredbegin delete ninety-sixend delete
11begin insert ninety sixend insert dollars ($396).

12(2) (A) A seven-hundred-twenty-dollar ($720) fee shall be paid
13upon placement of a consumer in an integrated job, except that no
14fee shall be paid if that consumer is placed with another consumer
15or consumers assigned to the same job coach during the same hours
16of employment.

17(B) Notwithstanding subparagraph (A), and subject to an
18appropriation of funds by the Legislature for these purposes, the
19fee described in subparagraph (A) shall be seven hundred
20begin delete ninety-twoend deletebegin insert ninety twoend insert dollars ($792).

21(3) (A) A seven-hundred-twenty-dollar ($720) fee shall be paid
22after a 90-day retention of a consumer in a job, except that no fee
23shall be paid if that consumer has been placed with another
24consumer or consumers, assigned to the same job coach during
25the same hours of employment.

26(B) Notwithstanding subparagraph (A), and subject to an
27appropriation of funds by the Legislature for these purposes, the
28fee described in subparagraph (A) shall be seven hundred
29begin delete ninety-twoend deletebegin insert ninety twoend insert dollars ($792).

30(e) Notwithstanding paragraph (4) of subdivision (a) of Section
314648, the regional center shall pay the supported employment
32program rates established by this section.

33

begin deleteSEC. 12.end delete
34begin insertSEC. 13.end insert  

The rate increases for developmental services required
35by this act shall supplement, and not supplant, increases to those
36rates made by the Budget Act of 2015 and Chapter 23 of the
37Statutes of 2015.



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