BILL ANALYSIS �
AB 1534
Page 1
Date of Hearing: March 4, 2014
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Mariko Yamada, Chair
AB 1534 (Linder) - As Introduced: January 21, 2014
SUBJECT : Area agencies on aging: independent living centers:
funding.
SUMMARY : Establishes a continuous appropriation of federal
funds appropriated to the State of California for the purposes
of supporting independent living centers (ILC's) and area
agencies on aging (AAA's). Specifically, this bill:
1)Creates a continuous appropriation of federal funds
appropriated to the State of California Federal Trust Fund
from the United States Treasury for support of ILC's and
AAA's. This continuous appropriation would provide the
California Department of Aging (CDA) and the California
Department of Rehabilitation (DOR) the funds necessary to
administer programs operated by AAA's and ILC's during fiscal
years in which the state Budget Act is not enacted by July 1.
2)Allows the Department of Finance to reduce the applicable
Budget Act appropriations by the amount of any payment made by
the Federal Trust Fund to CDA and DOR under this statute.
3)Provides that if the state Budget Act is not enacted by July 1
and the continuous appropriation is triggered, that the first
payment will be made to CDA and DOR by July 15. Subsequent
payments are to be made by the 15th of each month, until the
state Budget Act is enacted.
4)Declares this act to be an urgency statute in order that AAA's
and ILC's may avoid interruptions and disruptions of service
if the Budget Act of 2011 is not enacted in a timely manner.
EXISTING LAW :
1)Establishes the federal Rehabilitation Act, which, among other
things, empowers individuals with disabilities to maximize
employment, economic self-sufficiency, independence, inclusion
and integration into society through statewide workforce
investment systems, independent living centers and services,
research, training, demonstration projects and the guarantee
AB 1534
Page 2
of equal opportunity.
2)Establishes DOR as the overseer of the 29 ILCs and independent
living services.
3)Establishes the federal Older American's Act, which, among
other things, establishes a nation-wide network of state units
on aging and AAAs to deliver home and community-based programs
for older adults and their caregivers. Programs include
nutrition, information and assistance, elder abuse prevention
and caregiver support.
4)Establishes the Mello-Grandlund Older Californians Act which
provides state-funded programs and services for older adults
and people with disabilities.
5)Establishes CDA as the state unit on aging, and overseer of
California's 33 AAAs.
6)Establishes continuous appropriations via the Medical
Providers Interim Payment Fund to Medi-Cal providers, the AIDS
drug assistance programs, and developmental services programs
in the event the state budget is not passed by July 1.
FISCAL EFFECT : Takes effect immediately as an urgency statute.
COMMENTS :
California has 33 AAAs, which provide services that are
essential to the health and well-being of older adults, such as
basic nutrition, transportation, in-home assistance, and
caregiver support. AAAs in communities across the state are
tasked to plan, coordinate and offer services that help older
adults remain in their homes.
Funds for these programs come from the federal Older Americans
Act, the state's Older Californians Act, and county, city, and
grant sources. Approximately 80 percent of the money for AAA
programs is appropriated to the state from the federal
government.
California also has 29 ILCs, which provide services to people
with disabilities enabling them to remain in their own homes and
communities by supporting projects and activities carried out in
a manner consistent with the principles of respect for
AB 1534
Page 3
individual dignity, personal responsibility, and
self-determination. Additionally, ILCs support the pursuit of
meaningful careers, based upon the informed choice of
individuals with disabilities. An ILC is a consumer-centered,
community-based, non-residential, private non-profit entity that
is designed and operated within a local community by individuals
with disabilities. One hundred percent of the funding for ILCs
is from federal sources.
Author's Statement :
According to the author, "the stream of funds to both AAAs and
ILCs is dependent upon the passage of the state budget. When
the state budget is late, all funds-even those already received
by the state from the federal government for the express
purposes of supporting AAAs and ILCs are frozen. Federal Funds
should not be held back from being distributed, especially when
these programs rely on them as their primary funding source.
The inability of the legislature to pass a budget on or before
the fiscal deadline should not come at the cost of denying the
elderly and disabled in our communities the services they need."
Proponents argue that many of these programs operate on very
tight budgets and cannot continue unless bills are paid in a
timely manner. In some cases, local service providers must
secure lines of credit from banks in order to avoid shutting
down vital services. Although AAAs receive the funding from the
state after the budget is passed, they are not reimbursed for
the interest accrued on the lines of credit, nor can they use
the federal or state dollars to pay for the interest accrued.
According to the author, this bill ensures that vital services
to people living with disabilities and striving for independence
through personal responsibility and self-determination, along
with the vast population of frail, elderly persons are not
forced into temporary segregation, food insecurity and isolation
when the budget is delayed. This bill would avoid this by
continuing to appropriate federal funds for these services if
the annual state budget is not enacted by July 1 of the fiscal
year.
Prior Legislation :
In recent years, a number of bills creating a continuous
AB 1534
Page 4
appropriation for CDA or DOR have been introduced. Both the
Assembly Appropriations Committee and the Senate Appropriations
Committee have policies to recommend any bill containing a
continuous appropriation be placed on the respective committee's
suspense file. Each of the following bills was held on the
suspense file of the Appropriations Committee of its house of
origin. These include:
SB 657 (Ortiz) of 1999, AB 2552 (Daucher) of 2002, and AB 1
(Berg) of 2003, all allowed for the continuous appropriation of
federal funds for AAAs in the event of a state budget delay. SB
657 was held in the Senate Appropriations Committee and both AB
2552 and AB 1 were held in the Assembly Appropriations
Committee.
AB 1928 (Berg) of 2006, AB 322 (Anderson) of 2007, AB 885
(Nestande) of 2009, and AB 533 (Yamada) of 2011 all allowed for
the continuous appropriation of federal funds for both AAAs and
ILCs. Each bill was held in the Assembly Appropriations
Committee.
AB 2608 (Davis) of 2008 allowed for a continuous appropriation
for DOR. AB 2608 was held in the Assembly Appropriations
Committee.
AB 561 (Scott), Chapter 993, Statutes of 1998, enacted a funding
mechanism to protect Medi-Cal providers, developmental
disabilities service providers, and the AIDS drug assistance
program in the event of a budget delay. This measure provided
for a loan of up to $1 billion in state General Funds and up to
$1 billion in federal funds to the Medical Providers Interim
Payment Fund to continue making payments to specified providers
until the state budget is passed.
In 2003, AB 41 (Daucher) was introduced to establish a similar
mechanism, the Senior Citizens Interim Payment Fund. AB 41 was
held in the Assembly Appropriations Committee.
Appropriations Committee Policy on Continuous Appropriations :
In the most recent analysis of the continuous appropriation
mechanism proposed to bridge funding gaps for AAA and ILC
programs, the Assembly Committee on Appropriations stated the
following: "(T)he proposed continuous appropriation of Federal
Trust Funds to CDA and DOR in the absence of an enacted state
AB 1534
Page 5
budget is contrary to the general policy of this Committee to
avoid continuous appropriations. More than $500 million in
Federal Trust Funds per year are disbursed for these two
departments combined."
Proposition 25 :
On November 2, 2010, California voters enacted Proposition 25,
the "Majority Vote for the Legislature to Pass the Budget Act,"
as an initiated constitutional amendment. Proposition 25 ends
the previous requirement in the state that two-thirds of the
members of the California State Legislature had to vote in favor
of the state's budget in order for the budget to be enacted.
Proposition 25 also requires state legislators to forfeit their
pay in years where they have failed to pass a budget in a timely
fashion.
Since the passage of Proposition 25 in 2010, no state budget has
been delayed. This raises the question as to what the existing
problem is that AB 1534 is intended to address.
Amendment :
On page 3, line 8, replace "2011" with "2014".
REGISTERED SUPPORT / OPPOSITION :
Support
California Communities United Institute
California Association of Area Agencies on Aging
National Association of Social Workers - California Chapter
Opposition
None on file.
Analysis Prepared by : Robert MacLaughlin / AGING & L.T.C. /
(916) 319-3990