BILL NUMBER: AB 16 AMENDED BILL TEXT AMENDED IN ASSEMBLY APRIL 6, 1999 AMENDED IN ASSEMBLY MARCH 18, 1999 INTRODUCED BY AssemblyMember HondaMembers Honda, Shelley, and Villaraigosa (Coauthors: Assembly Members Alquist, Aroner, Calderon, Cardenas, Cardoza, Cedillo, Corbett, Davis, Dutra, Firebaugh, Gallegos, Havice, Hertzberg, Jackson, Keeley, Knox, Kuehl, Leach, Lempert, Lowenthal, Mazzoni, Nakano, Papan, Romero, Scott,Shelley,Soto, Steinberg, Strom-Martin, Torlakson,Villaraigosa,Washington, Wesson, Wiggins, and Wildman) (Coauthors: Senators Chesbro, Figueroa, McPherson, Murray, O' Connell, Ortiz, Perata, Rainey, Sher, Solis, Speier, and Vasconcellos) DECEMBER 7, 1998 An act to amend Section 12301.6 of, and to add Section 12301.8 to, the Welfare and Institutions Code, relating to public social services. LEGISLATIVE COUNSEL'S DIGEST AB 16, as amended, Honda. In-home supportive services. Existing law provides for the county-administered In-Home Supportive Services (IHSS) program, under which qualified aged, blind, and disabled persons are provided with services in order to permit them to remain in their own homes and avoid institutionalization. Existing law permits services to be provided under the IHSS program either through the employment of individual providers, a contract between the county and an entity for the provision of services, the creation by the county of a public authority, or a contract between the county and a nonprofit consortium. Existing law provides that when any increase in provider wages or benefits is negotiated or agreed to by a public authority or nonprofit consortium, the county shall use county-only funds to fund both the county's share and the state's share, including employment taxes, of any increase in IHSS costs, unless otherwise provided for by law. This bill would delete this provision, and would, instead, provide that the annual costs for any public authority or nonprofit consortium shall be shared by the state and county according to provisions of existing law. The bill would also authorize counties to designate funds to be used to increase provider wages and benefits for the provision of IHSS services through a nonprofit consortium or public authority or through a 3-year contract with various providers, and would provide for the reimbursement of any county that expends county funds in an amount at least equal to the reduction in the county's share of cost that results from federal financial participation in services provided to medically needy aged, blind, and disabled persons, for the cost of the increase in wages and benefits that exceeds the reduction in the county share of cost. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) The In-Home Supportive Services (IHSS) program was developed to permit the aged and persons with disabilities to live safely in their own homesandas well as to avoid more costly institutionalization. (b) Commencing in 1992, many services that had been provided through the IHSS program were able to be provided to certain recipients through the adoption of the personal care option provisions in the Medi-Cal program. (c) By 1998, this conversion resulted in savings to the General Fund of almost one billion dollars ($1,000,000,000). (d) The original intent was to use this savings to enhance the program, including improving the wages and benefits of IHSS program personnel pursuant to Section 12301.6 of the Welfare and Institutions Code. (e) Most IHSS personnel are paid at the minimum wage, with no additional benefits. (f) Due to the recession and resulting decreases in revenues, this savings was used to prevent program reductions. (g) In addition, counties lost revenue from the recession and from the property tax transfer. (h) The state's economy has now improved, and there is additional revenue available. There are also additional savings available through the IHSS program by transferring the aged, blind, and disabled medically needy recipients to the personal care option program. (i) Therefore, in order to improve the quality of IHSS personnel and their working conditions, and in order to reduce turnover in IHSS personnel, it is the intent of the Legislature to reinvest a portion of these savings in the program, specifically for wage and benefit increases, and to provide county relief by providing funds for the county share of cost. SEC. 2. Section 12301.6 of the Welfare and Institutions Code is amended to read: 12301.6. (a) Notwithstanding Sections 12302 and 12302.1, a county board of supervisors may, at its option, elect to do either of the following: (1) Contract with a nonprofit consortium to provide for the delivery of in-home supportive services. (2) Establish, by ordinance, a public authority to provide for the delivery of in-home supportive services. (b) (1) To the extent that a county elects to establish a public authority pursuant to paragraph (2) of subdivision (a), the enabling ordinance shall specify the membership of the governing body of the public authority, the qualifications for individual members, the manner of appointment, selection, or removal of members, how long they shall serve, and other matters as the board of supervisors deems necessary for the operation of the public authority. (2) A public authority established pursuant to paragraph (2) of subdivision (a) shall be both of the following: (A) An entity separate from the county, and shall be required to file the statement required by Section 53051 of the Government Code. (B) A corporate public body, exercising public and essential governmental functions and that has all powers necessary or convenient to carry out the delivery of in-home supportive services, including the power to contract for services pursuant to Sections 12302 and 12302.1 and that makes or provides for direct payment to a provider chosen by the recipient for the purchase of services pursuant to Sections 12302 and 12302.2. Employees of the public authority shall not be employees of the county for any purpose. (3) (A) As an alternative, the enabling ordinance may designate the board of supervisors as the governing body of the public authority. (B) Any enabling ordinance that designates the board of supervisors as the governing body of the public authority shall also specify that no fewer than 50 percent of the membership of the advisory committee shall be individuals who are current or past users of personal assistance services paid for through public or private funds or recipients of services under this article. (C) If the enabling ordinance designates the board of supervisors as the governing body of the public authority, it shall also require the appointment of an advisory committee of not more than 11 individuals who shall be designated in accordance with subparagraph (B). (D) Prior to making designations of committee members pursuant to subparagraph (C), or governing body members in accordance with paragraph (4), the board of supervisors shall solicit recommendations of qualified members of either the governing body of the public authority or of any advisory committee through a fair and open process that includes the provision of reasonable, written notice to, and a reasonable response time by, members of the general public and interested persons and organizations. (4) If the enabling ordinance does not designate the board of supervisors as the governing body of the public authority, the enabling ordinance shall require the membership of the governing body to meet the requirements of subparagraph (B) of paragraph (3). (c) (1) Any public authority created pursuant to this section shall be deemed to be the employer of in-home supportive services personnel referred to recipients under paragraph (3) of subdivision (d) within the meaning of Chapter 10 (commencing with Section 3500) of Division 4 of Title 1 of the Government Code. Recipients shall retain the right to hire, fire, and supervise the work of any in-home supportive services personnel providing services to them. (2) (A) Any nonprofit consortium contracting with a county pursuant to this section shall be deemed to be the employer of in-home supportive services personnel referred to recipients pursuant to paragraph (3) of subdivision (d) for the purposes of collective bargaining over wages, hours, and other terms and conditions of employment. (B) Recipients shall retain the right to hire, fire, and supervise the work of any in-home supportive services personnel providing services for them. (3) (A) The annual cost for any services provided by public authority or nonprofit consortium created pursuant to this section shall be shared by the state and the counties as prescribed in Section 12306. (B) No increase in wages or benefits negotiated or agreed to pursuant to this section shall take effect unless and until, prior to its implementation, the department has obtained the approval of the State Department of Health Services for the increase pursuant to a determination that it is consistent with federal law and to ensure federal financial participation for the services under Title XIX of the federal Social Security Act. (d) A public authority established pursuant to this section or a nonprofit consortium contracting with a county pursuant to this section, when providing for the delivery of services under this article by contract in accordance with Sections 12302 and 12302.1 or by direct payment to a provider chosen by a recipient in accordance with Sections 12302 and 12302.2, shall comply with and be subject to, all statutory and regulatory provisions applicable to the respective delivery mode. (e) Any nonprofit consortium contracting with a county pursuant to this section or any public authority established pursuant to this section shall provide for all of the following functions under this article, but shall not be limited to those functions: (1) The provision of assistance to recipients in finding in-home supportive services personnel through the establishment of a registry. (2) Investigation of the qualifications and background of potential personnel. (3) Establishment of a referral system under which in-home supportive services personnel shall be referred to recipients. (4) Providing for training for providers and recipients. (5) Performing any other functions related to the delivery of in-home supportive services. (6) Ensuring that the requirements of the personal care option pursuant to Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code are met. (f) (1) Any nonprofit consortium contracting with a county pursuant to this section or any public authority created pursuant to this section shall be deemed not to be the employer of in-home supportive services personnel referred to recipients under this section for purposes of liability due to the negligence or intentional torts of the in-home supportive services personnel. (2) In no case shall a nonprofit consortium contracting with a county pursuant to this section or any public authority created pursuant to this section be held liable for action or omission of any in-home supportive services personnel whom the nonprofit consortium or public authority did not list on its registry or otherwise refer to a recipient. (3) Counties and the state shall be immune from any liability resulting from their implementation of this section in the administration of the In-Home Supportive Services program. Any obligation of the public authority or consortium pursuant to this section, whether statutory, contractual, or otherwise, shall be the obligation solely of the public authority or nonprofit consortium, and shall not be the obligation of the county or state. (g) Any nonprofit consortium contracting with a county pursuant to this section shall ensure that it has a governing body that complies with the requirements of subparagraph (B) of paragraph (3) of subdivision (b) or an advisory committee that complies with subparagraphs (B) and (C) of paragraph (3) of subdivision (b). (h) Recipients of services under this section may elect to receive services from in-home supportive services personnel who are not referred to them by the public authority or nonprofit consortium. Those personnel shall be referred to the public authority or nonprofit consortium for the purposes of wages, benefits, and other terms and conditions of employment. (i) Nothing in this section shall be construed to affect the state' s responsibility with respect to the state payroll system, unemployment insurance, or workers' compensation and other provisions of Section 12302.2 for providers of in-home supportive services. Any county that elects to provide in-home supportive services pursuant to this section shall be responsible for any increased costs to the in-home supportive services case management, information, and payrolling system attributable to that election. The department shall collaborate with any county that elects to provide in-home supportive services pursuant to this section prior to implementing the amount of financial obligation for which the county shall be responsible. (j) To the extent permitted by federal law, personal care option funds, obtained pursuant to Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code, along with matching funds using the state and county sharing ratio established in subdivision (c) of Section 12306, or any other funds that are obtained pursuant to Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code, may be used to establish and operate an entity authorized by this section. (k) Notwithstanding any other provision of law, the county, in exercising its option to establish a public authority, shall not be subject to competitive bidding requirements. However, contracts entered into by either the county, a public authority, or a nonprofit consortium pursuant to this section shall be subject to competitive bidding as otherwise required by law. (l) (1) The department may adopt regulations implementing this section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For the purposes of the Administrative Procedure Act, the adoption of the regulations shall be deemed an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, these emergency regulations shall not be subject to the review and approval of the Office of Administrative Law. (2) Notwithstanding subdivision (h) of Section 11364.1 and Section 11349.6 of the Government Code, the department shall transmit these regulations directly to the Secretary of State for filing. The regulations shall become effective immediately upon filing by the Secretary of State. (3) Except as otherwise provided for by Section 10554, the Office of Administrative Law shall provide for the printing and publication of these regulations in the California Code of Regulations. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, these regulations shall not be repealed by the Office of Administrative Law and shall remain in effect until revised or repealed by the department. (m) (1) In the event that a county elects to form a nonprofit consortium or public authority pursuant to subdivision (a) before the State Department of Health Services has obtained all necessary federal approvals pursuant to paragraph (3) of subdivision (j) of Section 14132.95, all of the following shall apply: (A) Subdivision (c) shall apply only to those matters that do not require federal approval. (B) The second sentence of subdivision (g) shall not be operative. (C) The nonprofit consortium or public authority shall not provide services other than those specified in paragraphs (1), (2), (3), (4), and (5) of subdivision (d). (2) Paragraph (1) shall become inoperative when the State Department of Health Services has obtained all necessary federal approvals pursuant to paragraph (3) of subdivision (j) of Section 14132.95. (n) (1) One year after the effective date of the first approval by the department granted to the first public authority, the Bureau of State Audits shall commission a study to review the performance of that public authority. (2) The study shall be submitted to the Legislature and the Governor not later than two years after the effective date of the approval specified in subdivision (a). The study shall give special attention to the health and welfare of the recipients under the public authority, including the degree to which all required services have been delivered, out-of-home placement rates, prompt response to recipient complaints, and any other issue the director deems relevant. (3) The report shall make recommendations to the Legislature and the Governor for any changes to this section that will further ensure the well-being of recipients and the most efficient delivery of required services. (o) Commencing July 1, 1997, the department shall provide annual reports to the appropriate fiscal and policy committees of the Legislature on the efficacy of the implementation of this section, and shall include an assessment of the quality of care provided pursuant to this section. SEC. 3. Section 12301.8 is added to the Welfare and Institutions Code, to read: 12301.8. (a) Increases in provider wages and benefits for the provision of services pursuant to Section 12301.6 or 12302.1 may be made in a manner appropriate to the entities or contracts described in those sections. For the 1999-2000 fiscal year, and for each fiscal year thereafter, any county that expends county funds in an amount at least equal to the reduction in the county's share of cost that results from federal financial participation in services provided to medically needy aged, blind, and disabled persons after the implementation and approval of the state plan amendment pursuant to subdivision (p) of Section 14132.95 shall be reimbursed for the cost of the increase in wages and benefits that exceeds the reduction in the county share of cost and is necessary to meet the established rates. This provision does not apply to any wage increase necessary to meet federal or state minimum wage requirements. This subdivision applies solely to public authority, nonprofit consortium, and contract employees who provide services pursuant to Sections 12301.6 and 12302.1. (b) The department shall reimburse counties for the cost of increased wages and benefits that exceed the amount of the reduction in the county's share of cost as determined pursuant to subdivision (a), provided that amount is not greater than the county's actual cost. (c) Except as specifically set forth in subdivision (a), this section is not otherwise intended to alter the cost sharing described in Sections 12301.6 and 12306.