BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 564|
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THIRD READING
Bill No: AB 564
Author: Portantino (D), et al
Amended: 6/10/10 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 7-2, 7/15/09
AYES: Alquist, Aanestad, DeSaulnier, Leno, Negrete McLeod,
Pavley, Wolk
NOES: Strickland, Cox
NO VOTE RECORDED: Cedillo, Maldonado
SENATE APPROPRIATIONS COMMITTEE : 13-0, 8/27/09
AYES: Kehoe, Cox, Corbett, Denham, Hancock, Leno, Oropeza,
Price, Runner, Walters, Wolk, Wyland, Yee
SENATE FLOOR : 20-5, 9/9/09 (FAIL)
AYES: Alquist, Calderon, Corbett, Correa, DeSaulnier,
Hancock, Kehoe, Leno, Lowenthal, Maldonado, Negrete
McLeod, Padilla, Pavley, Price, Romero, Simitian,
Steinberg, Wiggins, Wolk, Yee
NOES: Ashburn, Cedillo, Cox, Denham, Ducheny
NO VOTE RECORDED: Aanestad, Benoit, Cogdill, Dutton,
Florez, Harman, Hollingsworth, Huff, Liu, Oropeza,
Runner, Strickland, Walters, Wright, Wyland
ASSEMBLY FLOOR : Not relevant
SUBJECT : Substance abuse treatment: programs:
restrictions on
compensation
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SOURCE : Author
DIGEST : This bill establishes a limitation on the amount
of compensation a director, officer, or employee of a
substance abuse treatment facility may receive from public
sources, not to exceed a certain federal compensation
limitation.
Senate Floor Amendments of 6/10/10 delete intent language
and delete language to the Substance and Abuse Crime
Prevention Act of 2000, resulting in the bill requiring a
majority vote, as opposed to a two-thirds vote.
ANALYSIS : Existing law provides for the licensure of
substance abuse treatment programs by the Department of
Alcohol and Drug Programs (DADP). Existing law,
Proposition 36, establishes the Substance Abuse and Crime
Prevention Act of 2000. It requires that non-violent drug
possession offenders and parolees receive drug treatment in
lieu of incarceration. It also establishes the Substance
Abuse Treatment Trust Fund, which requires the transfer of
money from the General Fund commencing in fiscal year (FY)
2000-01 and ending in 2005-06 for allocation to counties
through a specified distribution formula. The program
received General Fund transfers of $60 million in start-up
funding in FY 2000-01, and $120 million annually from FY
2001-02 through FY 2005-06. In the following years, the
Legislature appropriated $120 million in FY 2006-07, $100
million in FY 2007-08, and $90 million in 2008-09. There
is not an appropriation for this program in the FY 2009-10
Budget. Funds are used by counties to provide drug
treatment programs, vocational training, and family
counseling, among other programs.
This bill:
1. Establishes a limitation on the amount of compensation a
director, officer, or employee of a substance abuse
treatment facility may receive from public sources, not
to exceed a certain federal compensation limitation.
2. Establishes specified compensation requirements for any
director, officer, or employee who collects rent from a
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drug treatment facility.
3. Requires these restrictions on compensation to be terms
of any contract entered into in the state to provide
drug treatment if, under that contract, public funds are
to be used to provide the drug treatment.
Comments
According to the author's office:
"AB 564 seeks to enhance the federal guidelines in
regards to limiting the amount of public dollars which
can be used to pay the salaries of executives receiving
funding to operate drug treatment facilities.
"On June 11, 2009, the Los Angeles Times reported on the
salaries of some drug treatment executives in LA County.
The story highlighted individuals receiving compensation
of $420,000 and $330,000 per year in addition to owning
properties leased by the centers they were managing; the
rent they received exceeded $2.7 million.
"Current State law provides no limit to the amount of
public funds that can be spent on executive compensation
for those who operate drug and alcohol treatment
facilities. Whereas the federal government, through the
National Institutes of Health (NIH), imposes a cap of
$196,700 on salaries paid from grants.
"In many cases Federal, State, and Local governments all
provide funding to the same drug and alcohol treatment
programs.
"AB 564 will thus clarify that the limits placed on
executive compensation by the National Institutes of
Health (NIH) for federal grants shall be the limit of
executive compensation from all public money provided to
a drug and alcohol treatment program, prorated to match a
full time equivalent salary.
"Additionally, the bill will specify that an executive
who collects rent from a treatment facility may not
receive any compensation from public funds unless the
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grantee certifies that they are incompliance with the
Office of Management and Budget Circular A-122 relating
to Cost Principles for Non-Profit Organizations.
"It is imperative that the precious few resources that go
to drug and alcohol treatment are spent on patients and
not executive salaries. AB 564 seeks to do this by making
State law consistent with Federal law."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
DADP data collection $100 $220
$50General/*
and maintenance Federal
* Substance Abuse Treatment and Prevention Fund - its
sources are the General Fund, federal SAMHSA (Substance
Abuse and Mental Health Services Administration)
grants, and other federal funds.
SUPPORT : (Verified 6/15/10)
---
OPPOSITION : (Verified 6/15/10)
California Association of Alcohol and Drug Program
Executives
California Association of Nonprofits
California Opioid Maintenance Providers
CTW:mw 6/15/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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