AMENDED IN ASSEMBLY MAY 18, 2026
AMENDED IN ASSEMBLY APRIL 14, 2026
AMENDED IN ASSEMBLY MARCH 26, 2026
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
96
Introduced by Assembly Member Ávila Farías
February 19, 2026
An act to add Section 12306.165 to amend Section 12306.16 of the Welfare and Institutions Code, relating to in-home supportive services.
Vote: majority Appropriation: no Fiscal committee: yes Local program: no
LEGISLATIVE COUNSEL’S DIGEST
Existing federal law, the Community First Choice Option (CFCO) program, authorizes states to provide home- and community-based attendant services and supports to eligible Medicaid enrollees, as specified. Existing federal law provides federal financial participation for a state that provides services under the CFCO program.
Existing state law establishes the In-Home Supportive Services (IHSS) program, administered by the State Department of Social Services and counties, under which qualified aged, blind, and disabled persons are provided with services in order to permit them to remain in their own homes. Existing law requires the state and counties to share the annual cost of providing IHSS pursuant to a specified cost ratio. Existing law requires all counties to have a rebased County IHSS Maintenance of Effort (MOE) and requires the rebased MOE to be adjusted for the annualized cost of increases in provider wages, health benefits, or other benefits, as prescribed. Existing law, commencing July 1, 2026, requires a county to pay, separate from the rebased County IHSS MOE payment, a 100% share of the enhanced federal financial participation that would have been received if the state ceases to receive that funding for the provision of services due to noncompliance of timely case reassessment for the federal CFCO program.
This bill would require the department to, on or before July 1, 2029, prepare and submit to the Legislature a report on the amount of the above-described payments made by counties due to noncompliance of timely case reassessment for the federal CFCO program.
Existing federal law, the Community First Choice Option (CFCO) program, authorizes states to provide home- and community-based attendant services and supports to eligible Medicaid enrollees, as specified. Existing federal law provides federal financial participation for a state that provides services under the CFCO program.
This bill would require the department to develop and make available a 5-year pilot project for the County of Contra Costa for the purpose of improving IHSS eligibility and processing times through the use of innovative technologies. Under the bill, the county would be required to test innovative technologies that facilitate transcription and summarization of IHSS in-home eligibility interviews, as specified, and the project would be designed with a focus on decreasing IHSS application processing times for recipients participating in the CFCO program. The bill would require the county to post annual reports on project progress and outcomes. By creating new duties for the county relating to the pilot project, the bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Contra Costa.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
The people of the State of California do enact as follows:
SECTION 1.
Section 12306.16 of the Welfare and Institutions Code, as amended by Section 5 of Chapter 7 of the Statutes of 2025, is amended to read:
12306.16.
(a) Commencing July 1, 2019, all counties shall have a rebased County IHSS Maintenance of Effort (MOE).
(b) (1) The statewide total rebased County IHSS MOE base for the 2019–20 fiscal year shall be established at one billion five hundred sixty-three million two hundred eighty-two thousand dollars ($1,563,282,000).
(2) The Department of Finance shall consult with the department and the California State Association of Counties to determine each county’s share of the statewide total rebased County IHSS MOE base amount. The rebased County IHSS MOE base shall be unique to each individual county.
(3) (A) The amount of General Fund moneys available for county administration and public authority administration is limited to the amount of General Fund moneys appropriated for those specific purposes in the annual Budget Act, and increases to this amount do not impact the rebased County IHSS MOE.
(B) The state shall pay 100 percent of the allowable nonfederal share of county administration and public authority administration costs for each county. Once the county’s share of the appropriated General Fund moneys is exhausted, the county shall pay 100 percent of the remaining nonfederal share of county administration and public authority administration costs. Each county shall pay 100 percent of any costs for public authority administration that are in excess of the county’s approved rate approved pursuant to subdivision (a) of Section 12306.1. At the end of the fiscal year, any remaining unspent General Fund moneys allocated for IHSS county administration or public authority administration shall be redistributed through a methodology determined in conjunction with the County Welfare Directors Association of California or the California Association of Public Authorities.
(C) Amounts expended by a county or public authority on administration in excess of the amount described in subparagraphs (A) and (B) shall not be attributed towards the county meeting its rebased County IHSS MOE requirement.
(D) The department shall consult with the California State Association of Counties, the County Welfare Directors Association of California, and the California Association of Public Authorities to determine the county-by-county distribution of the amount of General Fund moneys appropriated in the annual Budget Act for county administration and public authority administration.
(c) Beginning on July 1, 2020, and annually thereafter, the rebased County IHSS MOE from the previous year shall be adjusted by an inflation factor of 4 percent.
(d) In addition to the adjustment in subdivision (c), the rebased County IHSS MOE shall be adjusted for the annualized cost of increases in provider wages, health benefits, or other benefits that are locally negotiated, mediated, or imposed, on or after July 1, 2019, including any increases in provider wages, health benefits, or other benefits adopted by ordinance pursuant to Article 1 (commencing with Section 9100) of Chapter 2 of Division 9 of the Elections Code or any future increases resulting from the same, including increases to health benefit premiums. For health benefit premium increases only, for any memorandum of understanding or collective bargaining agreement between the recognized employee organization and the county, public authority, or nonprofit consortium, executed or extended and submitted to the department for approval prior to July 1, 2019, through the end date, as specified in the memorandum of understanding or collective bargaining agreement described in this subdivision, the state shall cover 100 percent of the nonfederal share of health benefit premium increases, and there shall not be an adjustment to the rebased County IHSS MOE.
(1) (A) If the department approves the rate for an increase in provider wages or health benefits that are locally negotiated, mediated, imposed, or adopted by ordinance pursuant to Section 12306.1, the state shall pay 65 percent, and the affected county shall pay 35 percent, of the nonfederal share of the cost increase, in accordance with subparagraph (B).
(B) With respect to any increase in provider wages or health benefits approved on or after July 1, 2019, pursuant to subparagraph (A), the state shall participate in that increase as provided in subparagraph (A) up to the amount specified in paragraphs (1), (2), and (3) of subdivision (d) of Section 12306.1. The county shall pay the entire nonfederal share of any cost increase exceeding the amount specified in paragraphs (1), (2), and (3) of subdivision (d) of Section 12306.1.
(C) With respect to an increase in benefits, other than individual health benefits, locally negotiated, mediated, or imposed by a county, public authority, or nonprofit consortium, or adopted by ordinance, the county’s County IHSS MOE shall include a one-time adjustment equal to 35 percent of the nonfederal share of the increased benefit costs. If the department, in consultation with the California State Association of Counties, determines that the increase is one in which the state does not participate, the county’s County IHSS MOE shall include a one-time adjustment for the entire nonfederal share.
(2) If the department does not approve the rate for an increase in provider wages or health benefits, or increase in other benefits pursuant to subparagraph (C) of paragraph (1), that are locally negotiated, mediated, imposed, or adopted by ordinance pursuant to Section 12306.1, or increase to the public authority administrative rate, the county shall pay the entire cost of the increase.
(3) The county share of increased expenditures pursuant to subparagraphs (A) to (C), inclusive, of paragraph (1), shall be included in the rebased County IHSS MOE, in addition to the amount established under subdivision (c). For any increase in provider wages or health benefits, or increase in other benefits pursuant to subparagraph (C) of paragraph (1), that becomes effective on a date other than July 1, the department shall adjust the county’s rebased County IHSS MOE to reflect the annualized cost of the county’s share of the nonfederal cost of the wage or health benefit increase. This adjustment shall be calculated based on the county’s 2019–20 paid IHSS hours and the appropriate cost-sharing ratio as grown by the applicable number of inflation factors pursuant to subdivision (c) that have occurred up to and including the fiscal year in which the increase becomes effective.
(4) (A) With respect to any rate increases to existing contracts that a county has already entered into pursuant to Section 12302, the state shall pay 65 percent, and the affected county shall pay 35 percent, of the nonfederal share of the amount of the rate increase up to the maximum amounts established pursuant to Sections 12302.1 and 12303. The county shall pay the entire nonfederal share of any portion of the rate increase exceeding the maximum amount established pursuant to Sections 12302.1 and 12303. This adjustment shall be calculated based on the county’s 2019–20 paid IHSS contract hours, or the paid contract hours in the fiscal year in which the contract becomes effective if the contract becomes effective on or after July 1, 2019, using the appropriate cost-sharing ratio as grown by the applicable number of inflation factors pursuant to subdivision (c) that have occurred up to and including the fiscal year in which the increase becomes effective.
(B) With respect to rates for new contracts entered into by a county pursuant to Section 12302 on or after July 1, 2019, the state shall pay 65 percent, and the affected county shall pay 35 percent, of the nonfederal share of the difference between the locally negotiated, mediated, imposed, or adopted by ordinance provider wage and the contract rate for all of the hours of service to IHSS recipients to be provided under the contract up to the maximum amounts established pursuant to Sections 12302.1 and 12303. The county shall pay the entire nonfederal share of any portion of the contract rate exceeding the maximum amount established pursuant to Sections 12302.1 and 12303. This adjustment shall be calculated based on the county’s paid contract hours in the fiscal year in which the contract becomes effective using the appropriate cost-sharing ratio.
(5) The county share of the expenditures described in paragraph (4) shall be included in the rebased County IHSS MOE, in addition to the amounts established under subdivision (c). For any rate increases for existing contracts or rates for new contracts, entered into by a county pursuant to Section 12302 on or after July 1, 2019, that become effective on a date other than July 1, the department shall adjust the county’s rebased County IHSS MOE to reflect the annualized cost of the county’s share of the nonfederal cost of the increase or rate for new contracts. This adjustment shall be calculated as follows:
(A) For a contract described in subparagraph (A) of paragraph (4), the first-year cost of the amount of the rate increase calculated using the pro rata share of the number of hours of service provided in the contract for the fiscal year in which the increase became effective.
(B) For a contract described in subparagraph (B) of paragraph (4), the first-year cost of the difference between the locally negotiated, mediated, imposed, or adopted by ordinance provider wage and the contract rate for all of the hours of service to IHSS recipients calculated using the pro rata share of the number of hours of service provided in the contract for the fiscal year in which the contract became effective.
(6) If the state ceases to receive enhanced federal financial participation for the provision of services pursuant to Section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)), the rebased County IHSS MOE shall be adjusted one time to reflect a 35-percent share of the enhanced federal financial participation that would have been received pursuant to Section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)) for the fiscal year in which the state ceases to receive the enhanced federal financial participation.
(7) (A) Beginning July 1, 2026, if the state ceases to receive enhanced federal financial participation for the provision of services pursuant to Section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)) due to noncompliance of timely case reassessment for the Community First Choice Option program, the county shall pay, separate from the rebased County IHSS MOE payment, a 100-percent share of the enhanced federal financial participation that would have been received pursuant to Section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)) for the months in which the state did not receive the enhanced federal financial participation. For the 2025–26 fiscal year, the state and county shall each pay 50 percent of the amount of lost enhanced federal financial participation described in this paragraph. The department shall develop guidance, in consultation with the County Welfare Directors Association of California, to implement this paragraph.
(B) (i) On or before July 1, 2029, the department shall prepare and submit to the Legislature a report on the amount of payments made by counties pursuant to subparagraph (A).
(ii) A report to be submitted pursuant to clause (i) shall be submitted in compliance with Section 9795 of the Government Code.
(8) The rebased County IHSS MOE shall not be adjusted for increases in individual provider wages that are locally negotiated pursuant to subdivision (a) of, and paragraphs (1) and (2) of subdivision (d) of, Section 12306.1 when the increase has been specifically negotiated to take effect at the same time as, and to be the same amount as, state minimum wage increases.
(9) (A) A county may negotiate a wage supplement.
(i) The wage supplement shall be in addition to the highest wage rate paid in the county.
(ii) The first time the wage supplement is applied, the county’s rebased County IHSS MOE shall include a one-time adjustment by the amount of the increased cost resulting from the supplement, as specified in paragraph (1).
(B) A wage supplement negotiated pursuant to subparagraph (A) shall subsequently be applied to the minimum wage when the minimum wage increase is equal to or exceeds the county wage paid without inclusion of the wage supplement and the increase to the county wage paid takes effect at the same time as the minimum wage increase.
(10) The Department of Finance shall consult with the California State Association of Counties to develop the computations for the annualized amounts pursuant to this subdivision.
(e) The rebased County IHSS MOE shall only be adjusted pursuant to subdivisions (c) and (d).
Section 12306.165 is added to the Welfare and Institutions Code, immediately following Section 12306.16, to read:
12306.165.
(a) (1) The department shall develop and make available a five-year pilot project for the County of Contra Costa for the purpose of improving IHSS eligibility and processing times through the use of innovative technologies within the county.
(2) The pilot project shall be available for implementation between the 2027 and 2031 calendar years, inclusive.
(b) (1) The County of Contra Costa shall test innovative technologies that facilitate transcription and summarization of IHSS in-home eligibility interviews.
(2) The pilot project shall be designed with a focus on decreasing IHSS application processing times for recipients participating in the Community First Choice Option (CFCO) program, as established pursuant to Section 14132.956.
(c) (1) The County of Contra Costa shall not use innovative technologies to transcribe or summarize information provided by an individual during an IHSS in-home eligibility interview without first obtaining the individual’s separate and distinct written consent.
(2) Any request to obtain an individual’s consent shall clearly and conspicuously disclose all of the following:
(A) The specific purpose for which the innovative technology will be used.
(B) The types of information that will be collected from the individual.
(C) That the individual may withhold or withdraw their consent at any time.
(D) That withholding or withdrawing consent will not affect the provision, denial, timing, or quality of IHSS services or benefits.
(3) The provision, denial, timing, or quality of IHSS services or benefits shall not be conditioned on an individual’s decision to withhold or withdraw their consent.
(d) (1) A transcription or summary generated by innovative technologies pursuant to this section shall be reviewed by a human caseworker prior to being used to make or facilitate a decision regarding the provision, denial, timing, or quality of IHSS services or benefits.
(2) Any transcriptions or summaries generated by innovative technologies shall be clearly identified as such to the reviewing caseworker.
(e) Information collected from an individual pursuant to this section, including a transcription or summary of that information generated by innovative technologies, shall be used solely for the purpose of conducting an IHSS eligibility interview, and shall not be retained, sold, shared, or otherwise used for any other purpose, including by a third-party vendor.
(f) (1) A caseworker may discontinue their use of innovative technologies during an IHSS eligibility interview, or disregard any transcript or summary generated by those technologies, if the caseworker determines that a transcription or summary does not accurately reflect information provided by an individual.
(2) A caseworker’s exercise of discretion pursuant to this subdivision shall not result in any adverse employment action or penalty.
(g) During the implementation period, the county shall post on its internet website annual reports on progress and outcomes of the pilot project.
(h) (1) For purposes of this section, “innovative technology” means a software tool that transcribes or summarizes information provided by an individual during an IHSS eligibility interview.
(2) “Innovative technology” does not include a software tool that does either of the following:
(A) Generates predictions, risk scores, or classifications.
(B) Makes a decision or provides a recommendation regarding the provision, denial, timing, or quality of IHSS services or benefits.
SEC. 2.
The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique demographic and structural circumstances in the County of Contra Costa, as follows:
(a) A pressing need exists to provide fiscal relief and explore innovative system improvements to help expedite recertification times and reduce late penalties under the Community First Choice Option (CFCO) program through the In-Home Supportive Services (IHSS) program.
(b) Although the County of Contra Costa is a county of approximately 1,150,000 people, constituting around 3 percent of the state’s overall population, the county is responsible for approximately triple that proportion of statewide late penalties.
(c) The County of Contra Costa already significantly overmatches for the administration of the program, with the CFCO late penalties being anticipated to approach nearly $5,000,000 annually if no legislative action is taken.
(d) These high charges will have a detrimental and counterproductive effect, requiring resources to be diverted toward penalties rather than allowing the county to invest in improvements that achieve the intent of improving processing times.
SEC. 3.
If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.