Existing law, the Lanterman Developmental Disabilities Services Act (Lanterman Act), establishes the State Department of Developmental Services, which is responsible for providing various services and supports to persons with developmental disabilities, and for ensuring the appropriateness and quality of those services and supports. The Lanterman Act requires the department to enter into contracts with private nonprofit corporations to operate regional centers, which are required to provide, or arrange for the provision of, services and supports for persons with developmental disabilities. Under existing law, the state is responsible for developing and implementing a statewide program encouraging the establishment of sufficient numbers and types of living arrangements, both in communities and state hospitals, as necessary, to meet the needs of persons with disabilities.

Existing law establishes the Department of Housing and Community Development (DHCD) in the Business, Consumer Services, and Housing Agency. The DHCD is responsible for administering various housing and home loan programs throughout the state.

This bill would establish the California Integrated Community Living Program in the State Department of Developmental Services. The program would provide deferred payment loans to finance capital and other specified costs for permanent, supportive housing for individuals who are regional center clients in order to maximize affordable integrated community living opportunities within communities for people with intellectual and developmental disabilities. The bill would require the department and the DHCD to enter into an interagency agreement to administer the Integrated Community Living Program Fund, which would be created by, and continuously appropriated to the department for, the purposes described in the bill. The bill would prescribe the moneys to be deposited into the fund, including all moneys received by the department through the lease sale, lease, or other revenue-generating agreement for the properties of certain developmental centers, any state developmental center property, with specified exclusions. The bill would specify that moneys in the fund would not be used to supplant or backfill any existing program budget within either department. By creating a continuously appropriated fund, the bill would make an appropriation. The bill would require the department to convene an advisory committee to advise and assist in establishing funding priorities, with an emphasis on funding priorities for this program, as specified.

This bill would require the DHCD to set forth minimum criteria for developing and administering a competitive application process to award funding for loans under the bill, as specified. The bill would require the DHCD to distribute funds in a manner that maximizes access to low-income housing tax credit program projects for the target population, and that also incentivizes development of creative permanent supportive housing projects outside of that program, as specified. The bill also would require the DHCD to adopt guidelines establishing income and rent standards for potential residents of properties funded under the program, including standards based solely on federal Supplemental Security Income. The bill would require the department and the DHCD to develop community integration criteria to set the maximum percentage of apartment units reserved for persons with intellectual or developmental disabilities within specified program projects, and to stipulate community integration standards for small projects.

Existing law, the Lanterman Developmental Disabilities Services Act, Act (Lanterman Act), establishes the State Department of Developmental Services Services, which is responsible for providing various services and supports to persons with developmental disabilities, and for ensuring the appropriateness and quality of those services and supports. The Lanterman Act requires the department to enter into contracts with private nonprofit corporations to operate regional centers, which are required to provide, or arrange for the provision of, services and supports for persons with developmental disabilities. Under existing law, the state is responsible for developing and implementing a statewide program encouraging the establishment of sufficient numbers and types of living arrangements, both in communities and state hospitals, as necessary, to meet the needs of persons with disabilities.

Existing law vests in the State Department of Developmental Services jurisdiction over state hospitals referred to as developmental centers for the provision of residential care to individuals with developmental disabilities, and also requires the department to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families.

Existing law authorizes the department to perform various duties relating to the prevention, diagnosis, and treatment of persons with intellectual and developmental disabilities including disseminating educational information, providing advice, conducting educational and related work, and organizing, establishing, and maintaining community mental health clinics, as specified.

This bill would make technical, nonsubstantive changes to those provisions.

Date of Hearing: May 23, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1990

Author:(Mathis) – As Amended Ver:April 30, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill creates the California Integrated Community Living Program within the Department of Developmental Services (DDS) to provide permanent supportive housing options for regional center clients, to be funded using moneys from the sale, lease, or other revenue-generating agreement for any state developmental center property. Among this bill’s provisions:

1. Creates the Integrated Community Living Program Fund (Fund) in the State Treasury and requires the following to be deposited into the Fund:
   1. All moneys received by DDS through the sale, lease, or other revenue-generating agreement for any state developmental property, excluding existing revenues associated with the current Harbor Village and Shannon’s Mountain projects.
   2. All other moneys appropriated by the Legislature for purposes described in this bill.
   3. Federal or state grants, or private donations or grants made for the purposes described in this bill.
2. Requires DDS and the Department of Housing and Community Development (HCD) to enter into an interagency agreement for the purpose of administering the Fund.
3. Stipulates that no more than 5% of moneys in the Fund may be used by DDS and HCD to cover the costs of administering the provisions of this bill.
4. Requires HCD to develop and administer a competitive application process to award funding for loans, as specified.

FISCAL EFFECT:

1. Unknown GF losses, potentially in the millions of dollars, because proceeds of the sale, lease or other revenue-generating agreements for any state developmental center would be deposited into the Integrated Community Living Program Fund instead of the GF.
2. Estimated annual costs of approximately $80,000 ($64,000 GF) to DDS for one position to administer the program. The bill authorizes up to 5% of the Fund to be used for administration, but, the dollar amount that is equivalent to 5% is unknown, as is how much of the 5% would be allocated to DDS versus HCD.
3. Unknown, likely minor costs to HCD to develop and administer the application process.

COMMENTS:

1. Purpose. This bill seeks to use revenue from the sale or lease of any state developmental center property to fund integrated and affordable housing developments for people with intellectual and developmental disabilities.
2. Background. The Lanterman Act requires the state to provide services and supports to each person with developmental disabilities in the least restrictive environment, regardless of age or degree of disability, and to support integration into the mainstream life of the community.

DDS and 21 regional centers – private nonprofit entities established pursuant to the Lanterman Act, that contract with DDS to carry out many of the state’s responsibilities under the Act – share responsibility for the implementation of the Lanterman Act service system. The 21 regional centers serve approximately 332,000 consumers. Through March of this year, 588 consumers resided at one of California’s three developmental centers —and one state-operated, specialized community facility—which provide 24-hour habilitation and medical and social treatment services.

In May of 2015, Governor Brown announced plans to close the state’s remaining developmental centers, with the exception of the secure treatment program at Porterville DC and a smaller facility at Canyon Springs in Riverside County. Sonoma DC is scheduled to close by the end of 2018, and Fairview DC and the general treatment area of Porterville DC are slated to close by the end of 2021. DDS is overseeing a transition process for all DC residents to develop a personalized plan based on necessary supports and services. Possible living options in the community that meet an individual’s needs are explored, and a transition planning meeting takes place once an appropriate home has been located and agreed upon. Follow-up services are provided for a year following a developmental center consumer’s transition to the community.

This bill seeks to earmark revenues from the sale, lease, or other revenue generating uses of the state developmental center properties for loans to finance permanent supportive housing for regional center clients.

1. Related Legislation. ACR 77 (Lackey), of this legislative session, declares Legislative intent regarding, support for, and encouragement of using proceeds and resources resulting from the closure of developmental centers to provide community services to individuals with developmental disabilities. The measure is in the Senate Rules Committee.
2. Prior Legislation. SB 82 (Senate Committee on Budget and Fiscal Review), Chapter 23, Statutes of 2015, was the 2015-16 developmental services trailer bill which, among other things, clarified the Legislature’s intent to utilize General Fund savings from the developmental center closures to provide enhancements for services in the community.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2018

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Blanca Rubio, Chair

ABPCA Bill Id:AB 1990 (

Author:Mathis) – As Amended Ver:April 3, 2018

SUBJECT: California Integrated Community Living Program

SUMMARY: Creates the California Integrated Community Living Program to provide permanent supportive housing options for regional center clients, to be funded using moneys from the lease of or other revenue generating agreement for Fairview Developmental Center (DC) and the General Treatment Area of Porterville DC.

Specifically, this bill:

1. Establishes the California Integrated Community Living Program within the Department of Developmental Services (DDS) for the purpose of providing deferred payment loans to finance the capital costs, as specified, of permanent supportive housing for the target population, defined by provisions of this bill to mean regional center clients, in order to maximize affordable integrated community living opportunities for people with intellectual and developmental disabilities.
2. Creates the Integrated Community Living Program Fund (Fund) in the State Treasury and requires moneys in the Fund to be continuously appropriated to DDS, without regard to fiscal years, to be used for the purposes described by provisions of this bill.
3. Requires the following to be deposited into the Fund:
   1. All moneys received by DDS through the lease or other revenue-generating agreement for the properties of Fairview DC and the General Treatment Area of Porterville DC not to include existing revenues associated with Harbor Village, Shannon’s Mountain, and similar future projects;
   2. All other moneys appropriated by the Legislature for purposes of the provisions of this bill; and
   3. Federal or state grants, or private donations or grants made for the purposes of the provisions of this bill.
4. Requires DDS and the Department of Housing and Community Development (HCD) to enter into an interagency agreement for the purpose of administering the Fund.
5. Prohibits moneys in the Fund from being used to supplant or backfill any existing program budget within DDS or HCD.
6. Stipulates that no more than 5% of moneys in the Fund may be used by DDS and HCD to cover the costs of administering the provisions of this bill.
7. Requires DDS to convene an advisory committee to advise and assist in establishing funding priorities for the California Integrated Community Living Program and further, requires the advisory committee to convene every five years to review funding priorities, as specified.
8. Requires HCD to develop and administer a competitive application process to award funding for loans, as specified.
9. Requires, in addition to capital costs, funding to be available for operating and rent subsidies to achieve deeper affordability for regional center clients.
10. Requires a project to integrate regional center clients with the general public in order to be eligible for funding.
11. Requires HCD to distribute funds in a manner that:
    1. Maximizes access to low-income housing tax credit program projects for regional center clients; and
    2. Incentivizes development of creative permanent supportive housing projects outside of the low-income housing tax credit program that meet the unique needs of individuals with intellectual and developmental disabilities, as specified.
12. Requires HCD to evaluate applications using, at the least, the following criteria:
    1. The current supply and demand of affordable community housing opportunities for people with intellectual and developmental disabilities in the region;
    2. The extent to which supported living service and other community-based service providers are available to serve the proposed project location to support successful housing placements;
    3. The extent to which funds are leveraged for capital costs;
    4. The extent to which projects achieve deeper affordability through the use of non-state project-based rental assistance, operating subsidies, or other funding; and
    5. Project readiness.
13. Requires HCD to adopt guidelines that establish income and rent standards for potential residents of properties funded under the California Integrated Community Living Program, to include standards based solely on Supplemental Security Income (SSI) income, as specified.
14. Requires DDS and HCD to, with stakeholder input, develop community integration criteria to set the maximum percentage of apartment units reserved for persons with intellectual or developmental disabilities within low-income housing tax credit program projects, and to stipulate community integration standards for small projects.

EXISTING LAW:

1. Establishes the Lanterman Developmental Disabilities Services Act, which declares California’s responsibility for providing an array of services and supports to meet the needs of each person with developmental disabilities in the least restrictive environment, regardless of age or degree of disability, and to support their integration into the mainstream life of the community. (WIC 4500, et seq.)
2. Establishes the jurisdiction of DDS over state developmental centers, including Sonoma, Fairview and Porterville DCs, as specified. (WIC 4440 et seq.)
3. Requires DDS to submit a detailed plan to the Legislature when it proposes closure of a developmental center no later than April 1 immediately prior to the fiscal year in which the plan is to be implemented, and as a part of the Governor’s proposed budget and further, requires the Legislature to approve that plan prior to its implementation. (WIC 4474.1. (a))
4. Establishes a system of nonprofit regional centers to provide fixed points of contact in the community for all persons with developmental disabilities and their families, to coordinate services and supports best suited to them throughout their lifetime. (WIC 4620)
5. Authorizes the Department of General Services (DGS), with the consent of DDS, to permit the development of affordable housing for eligible individuals on the grounds of Fairview DC, as specified. (GOV 14670.35)
6. Creates the DDS Trust Fund, into which proceeds received from affordable housing projects developed on the grounds of Fairview DC, as specified, may be deposited and further, specifies that moneys in this trust fund shall be used, upon appropriation by the Legislature, to provide housing and transitional services for people with developmental disabilities and that any funds not needed to do so shall be transferred to the General Fund. (GOV 14670.36 (c))
7. Establishes in federal law the Supplemental Security Income for the Aged, Blind, and Disabled (SSI) Program to provide cash assistance to meet the basic needs of aged and blind individuals and individuals with disabilities. (42 U.S.C. § 1381-1383(f))
8. Establishes the State Supplementary Program for Aged, Blind and Disabled, which is intended to supplement SSI and provide persons whose need results from age, blindness or disability with assistance and services that help them meet basic needs and maintain or increase independence. (WIC 12000 et seq.)
9. Provides that eligibility requirements for SSP match federal SSI criteria, and requires a minimum level of SSP benefits to be provided in order to maintain federal Medicaid funding, as specified. (WIC 12000 et seq.)

FISCAL EFFECT: Unknown.

COMMENTS:

Developmental services: Developmental disabilities are disabilities that originate before an individual attains 18 years of age, are expected to continue indefinitely, and constitute a substantial disability for that individual; they include intellectual disabilities, cerebral palsy, epilepsy, and autism spectrum disorders (ASD). Other developmental disabilities are those disabling conditions similar to an intellectual disability that require treatment (i.e., care and management) similar to that required by individuals with an intellectual disability.

The Lanterman Act (Welfare and Institutions Code Section 4500 et seq.) declares the state’s responsibility for providing an array of services and supports to meet the needs of each person with developmental disabilities in the least restrictive environment, regardless of age or degree of disability, and to support their integration into the mainstream life of the community. The Lanterman Act entitles each eligible individual to treatment and habilitation services and supports in the least restrictive environment. Services provided under the Act are designed to enable all consumers to live more independent and productive lives in the community.

DDS and 21 regional centers – private nonprofit entities established pursuant to the Lanterman Act, that contract with DDS to carry out many of the state’s responsibilities under the Act – share responsibility for the implementation of the Lanterman Act service system. The 21 regional centers provide services such as residential placements, supported living services, respite care, transportation, day treatment programs, work support programs, and various social and therapeutic activities; they currently serve approximately 332,000 consumers.

As of March 28^th of this year, 588 consumers resided at one of California’s three developmental centers —and one state-operated, specialized community facility—which provide 24-hour habilitation and medical and social treatment services; this population is broken out as follows across the four settings:

Fairview Developmental Center: 128

Porterville Developmental Center: 280

Sonoma Developmental Center: 132

Canyon Springs Community Facility: 48

Consumers, their authorized representatives, and one or more regional center representatives, among others, work together as an individual program plan (IPP) team to develop an IPP for the consumer, which is based on the consumer’s needs and choices, and guides the services provided to the consumer through the developmental services system. The Lanterman Act requires the IPP to promote integration in one’s community and to maximize opportunities for each consumer to develop relationships, increase control over his or her life, be part of community life, and acquire increasingly positive roles in the community. The IPP must place the highest preference on services and supports that enable minors to live with their families and adults to live as independently as possible in the community.

Developmental Center closures: In May of 2015, Governor Brown’s administration announced plans to close the state’s remaining developmental centers, with the exception of the secure treatment program at Porterville DC (and a smaller facility at Canyon Springs in Riverside County). This followed the January 2014 release of a report on the long-term future of the developmental centers by the administration-convened Task Force on the Future of the Developmental Centers. Plans to close the DCs are in line with a greater national trend towards deinstitutionalization, as well as a response to concerns raised in recent years by the federal Centers for Medicare and Medicaid Services, the U.S. Department of Justice, and the state Department of Public Health regarding problems identified in California’s developmental centers, including inadequate care, insufficient staffing, and insufficient reporting and investigation of instances of abuse and neglect.

Sonoma DC is scheduled to close by the end of this year, and Fairview DC and the general treatment area of Porterville DC are slated to close by the end of 2021. DDS is overseeing a transition process for all DC residents. This process involves coordination between DCs and area regional centers to conduct needs assessments for each individual and to develop a personalized plan based on necessary supports and services. Interdisciplinary teams including the resident, family members, advocates, staff, and others as appropriate, meet to identify the resident’s goals and objectives and the supports and services that would meet the resident’s goals and needs. Possible living options in the community that meet an individual’s needs are explored, and a transition planning meeting (or meetings) take place once the IPP is completed and an appropriate home has been located and agreed upon. For a year following a developmental center consumer’s transition to the community, follow-up services are provided. These include regular contact with the consumer and service providers to, among other things, ensure provision of services per the IPP and identify any unaddressed issues in need of resolution.

Harbor Village and Shannon’s Mountain: Fairview DC property currently includes Harbor Village, a 564-unit mixed-income housing complex, and is slated to soon include another 332-unit complex called Shannon’s Mountain. Shannon’s Mountain must guarantee at least 20% of its units for DDS consumers; in Harbor Village, approximately 30% of units are occupied by DDS consumers. Harbor Village is the result of a long-term ground lease that DGS and DDS entered into with a private developer in 1981. The terms of the lease have been amended over time, and have resulted in surplus rental proceeds going in part to DDS; DDS has used these moneys to modify and renovate units to meet the needs of DDS consumers and to subsidize the rents of DDS consumer living at Harbor Village. The department expects surplus rental proceeds to, in the near future, reach a cap set in the lease agreement that will trigger 100% of surplus rental proceeds to flow to DDS, in an anticipated amount of $1.9 million per year; the department is required to deposit these dollars in a trust fund in the State Treasury to be used for the provision of affordable housing and transitional services for individuals with developmental disabilities. Harbor Village (and soon, Shannon’s Mountain) provides an example of one potential future use for DC properties: leasing a portion of the property to private entities in order to provide an ongoing source of revenue.

Legislative Analyst’s Office report on savings from DC closures: Pursuant to the Supplemental Report of the 2017-18 Budget Act, the Legislative Analyst’s Office (LAO) was required to examine a proposal regarding sequestering potential savings from the DC closures and retaining the savings in the DDS community services system. The LAO’s analysis looked at both potential net operational savings and potential increased revenues from the sale or leasing of DC properties. Regarding net operational savings, the LAO concluded that, once community services, safety net and crisis services, and costs in other departments for the provision of certain benefits were taken into account, the estimated annual reduction in spending at closed DCs of approximately $200 million would be reduced by approximately $100 million for a total estimated net operational savings of $100 million. Regarding potential increased revenues for the sale or leasing of DC properties, the LAO concluded that, “Each of the closure DCs has unique characteristics that will affect the state’s ability to generate revenues from the sale or leasing of properties. Sonoma DC and Fairview DC present the most fertile opportunities, but developing on these properties would require close collaboration with local governments. Developing mixed-income housing through a state lease would also require careful consideration of how DDS consumers would be integrated into the community.”

Low Income Housing Tax Credit Program: The federal and state Low Income Housing Tax Credit program offers tax credits to developers of affordable housing to cover a portion of building costs. According to a 2011 report prepared by the Corporation for Supportive Housing, “Tax credits also represent a significant source of funding for creating affordable multifamily homes. Congress created the Low Income Housing Tax Credit Program in 1986 to enable low-income housing developers to fund projects through the sale of tax credits to investors. The federal tax credit program includes two types of credits, 9% and 4%, related to the percentage of a project’s ‘qualified basis’ that the investing taxpayer can deduct from annual federal tax liability over 10 years. The California Tax Credit Allocation Committee (TCAC) awards credits on a competitive basis. Nine percent credits are extremely competitive. Rents on tax credit units cannot exceed 30% of a tenant's income and project sponsors must target low-income households. TCAC requires the project sponsor to commit that the project will remain affordable for 55 years. Applicants must also show leveraging of other public and private funds, experience developing housing affordable to low income Californians, and readiness to proceed with construction to be eligible for receiving credits.”

Need for this bill: According to the author, “Under existing law, the state is responsible for establishing sufficient numbers and types of living arrangements in communities to meet the needs of people with disabilities. Throughout the state, however, community providers are reporting the near impossibility of securing housing for clients, as well as the devastating stories of individuals who have already lost housing due to price increases. These people deserve to have the option of independent and affordable housing. We must ensure that the funding currently provided to our Developmentally Disabled community remains with the clients, rather than reverting to the general fund. As such, we should capture any cost savings from the closure, as well as from the sale or lease of the property, and use that money to fund integrated and affordable housing developments for the IDD community.”

Staff comments: The lack of a sufficient supply of affordable housing in California is a pervasive problem in the state that cuts across a range of policy areas. This bill seeks to increase housing opportunities for a particular segment of the population by targeting deferred payment loans for permanent supportive housing to projects for individuals with intellectual and developmental disabilities who are regional center clients in a way that maximizes affordable integrated community living opportunities and that utilizes moneys resulting from subsequent use of the Fairview DC and general treatment area of the Porterville DC upon their closure.

While this is an important goal, the bill as currently structured begs certain questions regarding implementation, coordination with currently-existing programs and projects, and roles and responsibilities of the key state departments tasked with carrying out the provisions of this bill. For example, the current version of the bill calls for DDS and HCD to enter into an interagency agreement for purposes of administering the Integrated Community Living Program Fund created by this bill, and requires DDS to convene an advisory committee to establish funding priorities, yet tasks only HCD with the development and administration of the proposed loan program. These varying roles and responsibilities could create significant communication issues and confusion in implementation of the proposed program. More importantly, requiring HCD to be solely responsible for selecting and distributing funds meant to ultimately benefit individuals with intellectual and developmental disabilities – a population served by DDS – without mandating even any consultation with DDS seems questionable.

Additionally, HCD is involved in administering a number of current projects which may coincide with, provide good models for, or be able to subsume the program proposed by this bill. For example HCD administers the Multifamily Housing Program – Supportive Housing Program, which offers deferred-payment 55-year loans for construction and rehabilitation of supportive housing; this program may be able to absorb, or provide a tested model for, the program proposed by this bill. Relying on the structure of, and expertise developed through, current similar programs could help avoid inefficiencies and duplicative, if not competing, efforts.

Finally, the bill as currently in print stipulates that existing revenues associated with Harbor Village, Shannon’s Mountain, and “similar future projects” are not to be deposited in the Integrated Community Living Program Fund. The vagueness of “similar future projects” makes it unclear what revenue-generating projects this exclusion would apply to; a broad interpretation of the term might result in the exclusion of proceeds from all revenue-generating projects from being deposited into the Fund.

In consideration of these concerns, should this bill move forward, the author may wish to consult with both DDS and HCD on already existing housing models and opportunities for individuals with developmental disabilities to develop an approach to permanent supportive housing for this population that is better coordinated with current efforts and that aptly reflects the separate roles and responsibilities of each department. Additionally, should this bill move forward, the author may wish to clarify the term “similar future projects” as it relates to requisite, and excluded, deposits into the Integrated Community Living Program Fund.

RELATED AND PRIOR LEGISLATION:

ACR 77 (Lackey), 2017, would declare Legislative intent regarding, support for, and encouragement of using proceeds and resources resulting from the closure of developmental centers to provide community services to individuals with developmental disabilities. It is currently in the Senate Rules Committee.

ABX2 1 (Thurmond), Chapter 3, Statutes of 2016, provided additional state support for developmental services which, among other things, implemented targeted rate increases for the community-based developmental services system.

SB 82 (Senate Committee on Budget and Fiscal Review), Chapter 23, Statutes of 2015, was the 2015-16 Developmental Services Trailer Bill which, among other things, clarified the Legislature’s intent to utilize General Fund savings from the developmental center closures to provide enhancements for services in the community.

AB 1472 (Assembly Committee on Budget), Chapter 25, Statutes of 2012, was the 2012-13 Developmental Services Trailer Bill which, among other things, imposed a moratorium on developmental center admissions, except in instances where an individual was involved in the criminal justice system, was in an acute crisis and in need of short-term stabilization, or was released on provisional placement with an automatic right of return.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089