BILL ANALYSIS
AB 421
Page 1
Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
AB 421 (Beall) - As Amended: April 13, 2009
[This bill was double referred to and heard by the Assembly
Human Services Committee as it relates to the issues under its
jurisdiction]
SUBJECT : Seriously emotionally disturbed children: out-of-home
placement
SUMMARY : Authorizes payments for 24-hour care of a child
classified as seriously emotionally disturbed (SED) and placed
out-of-home in an out-of-state, for-profit residential facility
pursuant to special education provisions. Specifically, this
bill, an urgency measure :
1)Authorizes, until January 1, 2011, payments on behalf of
children placed in out-of-state privately operated residential
facilities that meet applicable licensing requirements of that
state, as required under the Interstate Compact on the
Placement of Children, as specified in the California Family
Code.
2)Authorizes, from January 1, 2010 until January 1, 2013,
payments to out-of-state, for-profit residential facilities
that meet applicable licensing requirements in the state in
which they are located for 24-hour, out-of-home care of a SED
child placed there pursuant to an Individualized Education
Program (IEP) if either:
a) The county or the local educational agency (LEA) placed
the child in the facility after due process proceedings
were initiated under state special education provisions and
either of the following occurred:
i) Following a due process hearing, the hearing officer
finds that, after a thorough search, no other comparable
private nonprofit or publicly licensed residential
facility was identified that is both willing to accept
placement and capable of providing an appropriate
education in compliance with law; or,
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ii) A written mediation or settlement agreement was
reached, which includes documentation that a thorough
search was conducted and no other comparable private
nonprofit or publicly licensed residential facility was
identified that is both willing to accept placement and
capable of providing an appropriate education in
compliance with law; or,
b) The IEP team agreed, and the placement was made, after a
thorough search in which no other comparable private
nonprofit or publicly licensed residential facility was
identified that is both willing to accept placement and
capable of providing an appropriate education in compliance
with law. The placing agency shall document its efforts
and the reasons no other placement option can be
identified.
3)Specifies that the provisions described above are not intended
to change existing procedures, protections or requirements
regarding the placement of children in out-of-state
facilities, including out-of-state community care licensing
requirements.
4)Requires the Department of Mental Health (DMH), in
collaboration wit the California Mental Health Directors
Association, to annually provide information to Senate and
Assembly budget committees on:
a) The number of in-state and out-of-state placements of
children with serious emotional disturbances in nonprofit
and for-profit residential facilities;
b) The average length of stay of those children in each
type of facility; and
c) The number of those children who were dependents, wards
or voluntarily placed in foster care at the time of their
placement pursuant to an IEP.
5)Provides that to the extent that any county fails to
voluntarily provide the required information to DMH, the DMH
shall note that as the reason for the omission of information
relevant to that county.
6)Deems to be reimbursable, county claims submitted to the
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Controller for mental health services required by, and 24-hour
care provided to an SED child placed in an out-of-state
for-profit residential facility pursuant to an IEP on or
before the date this bill is enacted, and specifies that the
state Controller may still dispute whether claims for costs
exceed what is allowable.
7)Prohibits reimbursement for new past claims based on the
provisions of this bill.
8)Makes findings and declarations relative to requirements under
federal law for the provision of a free and appropriate public
education to individuals with disabilities.
EXISTING LAW :
1)Establishes the right of individuals with exceptional needs to
receive a free appropriate public education and ensures the
right to special instruction and related services needed to
meet their individual and unique needs, in conformity with
federal law and regulations.
1)Authorizes out-of-home residential placements, pursuant to an
IEP, when necessary for a child classified as SED to benefit
from educational services. Requires designation of the county
mental health department as the lead case manager and requires
regular review of such placements.
2)Requires that payments for 24-hour out-of-home care pursuant
to an IEP for a child classified as SED be made to privately
operated residential facilities licensed in accordance with
the Community Care Facilities Act and based on rates
established by Aid to Families with Dependent Children-Foster
Care (AFDC-FC) provisions.
3)Requires that out-of-state placements pursuant to an IEP be
made only in a privately operated school certified by the
Department of Education (CDE), and that a plan be developed
for using a less restrictive, in-state alternative (unless in
child's best interest to stay out-of-state).
4)Requires LEAs to document efforts to locate a nonpublic school
(NPS) in California before contracting with an out-of-state
NPS. Requires out-of-state NPSs to be certified or licensed
to provide special education in their own state and that IEP
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teams report to the Superintendent of Public Instruction
within 15 days of placement in any out-of-state NPS and LEAs
indicate the anticipated date for the child to return to the
state.
5)Requires local mental health departments to report information
to the Department of Mental Health (DMH) regarding each
out-of-state residential placement of an SED child pursuant to
an IEP, including provisions for case management, supervision
and family visitation.
6)For a dependent child, requires the court to state on the
record that in-state placements could not meet the child's
needs before approving an out-of-state placement pursuant to
an IEP.
FISCAL EFFECT : Unknown
COMMENTS : Pursuant to the Individuals with Disabilities
Education Act (IDEA), every pupil with disabilities is entitled
to a free and appropriate public education (FAPE) in the least
restrictive environment (LRE). Special education and related
services are provided as specified in a pupil's IEP. The IEP is
reviewed periodically between school officials and the pupil's
parents.
AB 3632 services : In providing mental health treatment and
assessment to pupils with disabilities, AB 3632 (Brown) Chapter
1747, Statutes of 1984, transferred the mental health
responsibility from local education agencies (LEAs) to county
mental health agencies. AB 3632 services are mental health
services provided as part of a child's IEP to ensure that he or
she benefits from his or her education. AB 3632 services may
include: individual, group or family psychotherapy; day
treatment services; or residential placement. Mental health
services are provided through the County Department of Mental
Health (CDMH).
There are two eligibility requirements that must be met for a
child to receive AB 3632 mental health services: The child must
be eligible for special education services but not necessarily
have been identified as "emotionally disturbed," and the child
must need mental health services in order to benefit from his or
her special education program. The AB 3632 regulations outline
a process for identifying and placing children who have a
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serious emotional disturbance and need a residential placement
to benefit from FAPE. Additionally, to receive a residential
placement, the child must require a 24-hour therapeutic program
in order to benefit from his or her educational program.
What is the need for this bill : According to information
provided by the author, "In 1992, the federal government enacted
legislation prohibiting placement of SED children in residential
facilities operated on a 'for-profit' basis. The 1992 statutory
change prohibited any use of public funds for residential
placement into 'for-profit' facilities, both in California and
throughout the country. As a result, in California virtually all
placement agencies converted to 'not-for-profit' status or
ceased working with publicly funded children. California law was
subsequently changed to conform to federal law."
In 1996, the federal government reversed itself and authorized
out of state placements in for-profit residential facilities,
which also applies to students placed pursuant to the IDEA.
However, California did not change its own laws to conform to
allow placements - either in state or out of state - in
for-profit facilities.
Furthermore, the author suggests that "some out-of-state
residential providers are owned by 'for-profit' entities,
usually hospital/behavioral health corporations. Some
'not-for-profit' residential providers are operated by the
parent company thru a subsidiary contract. In a good faith
effort to comply with the state law, counties contract for
services for some SED students, with the "not-for-profit"
entities. Counties placed students in these facilities
believing that, so long as the contracted company was
'not-for-profit' this was in compliance with the letter and the
intent of federal and state law. Counties have historically
(past 13 years, until 2005) been reimbursed by the state for the
costs of these placements, and therefore had no reason to
believe they did not comply with state law."
In 2005, an unpublished administrative law judge decision in a
special education due process hearing found that these
facilities did not meet the definition of "not-for-profit," and
therefore California children are prohibited by state law from
being placed in them. This decision prompted the State
Controller's Office to dispute counties' eligibility for mandate
reimbursement for these out-of-state placements.
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Out-of-state placements : A 2003 report prepared by the American
Institutes for Research (AIR) studied the education of children
residing in out-of-home placements. According to this report,
currently, most of the youth placed in out-of-state facilities
are mental health/AB 3632 placements. As a result of the
passage of foster care reform legislation, SB 933 Chapter 311,
Statutes of 1998, some counties now prohibit the Department of
Social Services (DSS) and the Department of Probation from
placing youth outside the state. SB 933, which applies to
dependents and wards, but not to those governed by AB 3632,
requires that all in-state options must be pursued before
out-of-state placement is considered and all out-of-state
placements must meet California's licensing requirements. The
AIR report contends that because SB 933 has resulted in fewer
dependents and wards placed outside of California, fewer
in-state beds remain for AB 3632 youth.
For-profit placements : Some historical news articles state that
the federal government's original exclusion of for-profit
companies from receiving foster care funds was in part because
Congress feared repetition of nursing home scandals in the
1970s, when public funding triggered growth of a badly monitored
institutional care industry. California's current policy of
limiting payments to nonprofit group homes continues to ensure
that the goal of serving children's interests is not mixed with
the goal of private profit. Nonprofits are also generally
subject to more oversight, including that of a financially
disinterested board.
CDE monitors some education-related services in out-of-state
nonpublic schools that serve California students. Existing
regulations implementing case management-related statutes
require quarterly onsite contacts between local mental health
case managers and students residentially placed as a result of
an IEP. However, neither CDE nor the Department of Social
Services (DSS) conducts certification, monitoring or complaint
investigation of the residential component of placements at
issue. Some county mental health agencies report taking on
additional oversight responsibility not required by statute.
Estimates of placements : December, 2007 data from the CDE
reflects 45 California-certified non-public schools outside of
California that served 862 students. Of these 45 schools, 13
were affiliated with a licensed children's residential
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institution and classified by CDE as for-profit. A total of 243
California children were attending out-of-state non-public
schools with affiliated licensed children's residential
institutions that CDE classified as for-profit.
It is not clear how many children classified as SED are
residentially placed pursuant to IEPs.
Although this bill seeks to resolve an issue relative to the
reimbursement to counties for services that have been provided
to children classified as SED, this bill also raises questions
relative to the placement of these children in such restrictive
residential facilities that are far from their homes and
families and in facilities that are operated in a for-profit
basis. The primary objective of for-profit facilities is to
maximize profit. This bill demonstrates the need for non profit
facilities in the state that can meet the needs of SED children.
This measure sunsets in 2013, and the author has expressed
interest in holding hearings and studying this issue in the
years during which this measure would be in effect to explore
potential solutions to expand the availability of services that
meet the needs of SED children in the state.
Arguments in support : The County of San Bernardino writes,
"Absent a change in state law to conform to federal law,
counties have been forced to find alternative arrangements for
hundreds of special education students with mental health needs.
Also counties that have placed and paid for such placements in
the past- believing them to be compliant with both state and
federal law- are at risk of losing a significant amount of
reimbursement for these state and federally mandated services
unless California law is changed retroactively. In San
Bernardino County alone, the Behavioral Health Department has
spent $280,000 over the last 5 years for unreimbursed placement
costs for seriously emotionally disturbed children placed in
these facilities, money that could be used for other needed
services."
Arguments in opposition : Disability Rights California (DRC)
states an "opposed unless amended" position and writes,
"Disability Rights California still has significant concerns
with this legislation because it makes it much easier for
counties and districts to place special education students in
out-of-state residential facilities. While all residential
educational placements are highly restrictive, out-of-state
placements are the most restrictive because children in
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facilities far from home are isolated from regular interactions
with family, friends, and other children without disabilities."
DRC further states, "we believe that additional data should be
provided to Disability Rights California, California's
protection and advocacy agency, regarding injuries and deaths of
California children placed in out-of- state residential
facilities. The collection of this data can be achieved at no
cost to the counties or the state because it can be done via a
contractual agreement by the county and the provider.
Contractual language would require the out of state provider to
send the incidents of injury or death of California residents
directly to Disability Rights California for our review. Such a
provision allows for additional, necessary monitoring of these
facilities."
Staff suggests the author consider amending the bill to add a
provision to the reporting requirements in the bill to include
reporting the number of serious injury incidents that were
reported to counties.
This bill was heard by the Assembly Human Services Committee on
April 14, 2009 and passed with a vote of 6-0.
Amendments from the Human Services Committee : The following
amendments were agreed to in the Human Services Committee and
will be processed by this Committee:
The Legislature finds and declares as follows:
(a) As required by federal law, all schoolaged
school-aged children are legally required to receive a Free
and Appropriate Public Education (FAPE) for kindergarten and
grades 1 to 12, inclusive (20 U.S.C. Sec. 1412(a)(1)).
(b) In accordance with federal law, California has
delegated the FAPE requirements to the local education
agencies and counties (Chapter 2.5 (commencing with Section
56195 of Part 30 of Division 4 of Title 2 of the Education
Code.
(c) Counties are sometimes required to place specified
severely emotionally disturbed children in the most
appropriate placement to accomplish the goal of FAPE.
(d) (c) Counties Local education agencies and counties
recognize, in rare instances, that the most only available
appropriate placement may not be a nonprofit facility, but
meets the needs of the child, as required by federal law.
(e) It is the intent of the Legislature in enacting this
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act to ensure that counties receive reimbursement for
adherence to state and federal law as they act in the best
interest of the child in ensuring that every child receives a
FAPE .
Previous legislation : SB 292 (Wiggins) of 2008 authorizes
payments for 24-hour care of a child classified as seriously
emotionally disturbed (SED) and placed out-of-home in an
out-of-state, for-profit residential facility pursuant to
special education provisions. SB 292 was held on the Assembly
Floor.
AB 1805 (Committee on Budget) of 2008 authorizes payments for
24-hour care of a child classified as SED and placed out-of-home
in an out-of-state, for-profit residential facility pursuant to
special education provisions. contained substantially similar
provisions and was vetoed by the Governor. In his veto message,
the Governor states:
"I strongly support providing care to children with serious
emotional disturbances, including the provision of care in
whichever facility can best address their needs. While I
support the intent and policy behind this bill, I cannot sign it
in its current form because it will allow the open-ended
reimbursement of claims, including claims submitted and denied
prior to 2006-07. Given our state's ongoing fiscal challenges,
I cannot support any bill that exposes the state General Fund to
such a liability. I would support legislation that clarifies
and narrows state reimbursement for these important services to
a specified time period and would ask the Legislature to work
with my Administration in January to address this important
issue."
REGISTERED SUPPORT / OPPOSITION :
Support
Board of Supervisors County of Santa Clara
California Alliance of Child and Family Services
California Council of Community Mental Health Agencies
California Psychological Association
California Society for Clinical Social Work
California State Association of Counties
County Welfare Directors Association of California
Los Angeles County Board of Supervisors
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Mental Health Association in California
San Bernardino County Board of Supervisors
Special Education Local Plan Area Administrators
Urban Counties Caucus
Individuals
Opposition
Disability Rights California (unless amended)
Analysis Prepared by : Marisol Avi?a / ED. / (916) 319-2087