SB 163 California Senate · 2025-2026 Regular Session

Developmental services.

SB 163 is a procedural bill that expresses the California Legislature's intent to later enact statutory changes related to the Budget Act of 2025. It does not create new budget policies, allocate funds, or directly affect any individuals or entities. The bill serves only as a formal statement of future legislative action, with no fiscal impact or specific provisions included in its text. This is a standard procedural step to signal upcoming budget-related legislation, not a substantive policy change.
Bill status signed all 5 stages cleared
Introduction
Jan 2025
Committee Review
Mar 2025
Senate Passage
Mar 2025
Assembly Passage
Jun 2026
Signed into Law
Jul 2026
Introduced Jan 23, 2025 Signed Jul 13, 2026
Maddy AI version diff · 4 comparisons

What changed between versions

01/23/25 - Introduced 06/26/26 - Amended Assembly · 23 edits · Jun 26, 2026
MAJOR
SB 163 was transformed from a simple placeholder expressing legislative intent to enact Budget Act changes into a comprehensive omnibus bill covering virtually every major aspect of California's developmental services system. The amended version amends dozens of sections across the Government Code, Public Contract Code, and Welfare and Institutions Code, addressing everything from early intervention transitions and rate reform to regional center governance, grievance procedures, IT systems, and funding mechanisms.
SCOPE

The bill changed from a one-line intent statement to a full omnibus bill amending over 40 code sections across three codes, covering the entire developmental services system including early intervention, regional centers, supported living, self-determination, rate reform, and governance.

Removes the 120-day limit on the department directly operating a regional center program before contracting with a new governing board. Authorizes the department to operate a regional center during interim periods through contract. Requires notification to the Joint Legislative Budget Committee every 6 months until transition is complete.

Effective January 1, 2027, vendors are no longer required to maintain a physical location within a regional center's service area unless a physical location is required for delivery of services. Authorizes the department to repeal or amend regulations as necessary.

FISCAL

Authorizes the State Department of Developmental Services to make direct care purchases in individual amounts under $10,000 beginning FY 2026-27 for department-operated facilities, with a requirement to establish a written policy and procedures manual.

Requires up to $1,000,000 of reappropriated funds to be made available to the department from July 1, 2026 through June 30, 2030 for participant needs including local community resource fairs and standardized statewide training. Beginning July 1, 2030, requires at least $1,000,000 in annual appropriations for the same purposes.

Reappropriates funds from Budget Acts of 2023, 2024, and 2025 related to Local Volunteer Advisory Committees and extends the encumbrance period until June 30, 2030.

Exempts contracts and contract amendments for procuring services necessary to implement rate reform from the Public Contract Code, State Administrative Manual, and Department of General Services approval through December 31, 2030. Extends the deadline for the department to adopt related regulations from June 30, 2028 to December 31, 2030.

Authorizes the State Department of Developmental Services to issue and adjust funding allocations to regional centers by letter, contract, or contract amendment at its discretion. Exempts these allocations from the Public Contract Code and State Contracting Manual and from DGS approval, provided they are consistent with annual Budget Act appropriations.

Restricts allocation of federal financial participation funds for the Self-Determination Program to offsetting costs for criminal background checks and other administrative costs (including support for the Statewide Self-Determination Advisory Committee), removing the prior authorization to use remaining funds for independent facilitators, initial individual budgets, and regional center operations.

REQUIREMENT

Removes the requirement for work activity programs and supported employment programs to comply with CARF (Commission on Accreditation of Rehabilitation Facilities) standards. Replaces this with a requirement that regional centers monitor, evaluate, and audit habilitation services providers using service standards established by the department.

Requires the State Department of Education to enter an interagency agreement with the State Department of Developmental Services to facilitate seamless transition between Part C (early intervention for infants/toddlers) and Part B (preschool special education) of the federal Individuals with Disabilities Education Act. Requires written directives to be issued no later than June 30, 2029 as a condition to receive federal Part C grant funds.

Requires the Department of Rehabilitation and the State Department of Developmental Services to develop an interagency agreement creating an integrated employment services system between DOR and regional centers. Requires semiannual milestone reporting on the department's website beginning December 1, 2026 until the system is developed.

Requires hourly workers employed by regional center vendors providing supported living services to be compensated at 1.5 times their regular rate of pay for hours worked in excess of 40 per workweek, notwithstanding any other law.

Increases the threshold for regional center governing board approval of contracts from $250,000 to $350,000 (until July 1, 2030), then to $450,000 (July 1, 2030), increasing by $50,000 every 5 years thereafter. Exempts purchase of service authorizations from this requirement.

Limits regional center governing boards to no more than 17 members with specified expertise in California law, management, board governance, fiscal/financial matters, and developmental disability programs (by January 1, 2028). Requires boards to complete trainings, appoint an advisory group, and review the executive director's performance annually.

Requires regional center governing boards to retain or employ an attorney by July 1, 2027 with at least 5 years of specified legal experience. The attorney must be present at all board meetings and executive committee meetings where final decisions are made.

Requires the department, in consultation with stakeholders, to issue guidance to regional centers by March 1, 2028 on maintaining quality assurance oversight, special incident reporting, provider directory structure, and rate controls while removing barriers to statewide accessibility of services. Requires service providers to give preference to individuals served by their initially vendorizing regional center.

Authorizes tailored day services to be delivered on the same day as supported employment individual placement services, removing a prior prohibition that applied unless certain conditions were met.

ELIGIBILITY

Authorizes individuals and families to voluntarily choose to receive specified services remotely until December 31, 2028, if remote delivery would effectively meet needs identified through the planning team process. Requires providers to document remote services monthly and the department to report quarterly to the Legislature beginning March 2027.

TECHNICAL

Mandates the Life Outcomes Improvement System (LOIS) as the single case management and financial IT system used by all regional centers. Requires regional centers to discontinue use of all other such systems upon LOIS readiness. Requires quarterly written updates to legislative committees and the Legislative Analyst's Office on LOIS planning.

ENFORCEMENT

Overhauls the grievance procedure effective February 1, 2027. Under the new system, grievances are filed with the department (not the regional center), must be reviewed within 5 days, the grievant gets an opportunity to present evidence and arguments, a resolution plan must be produced within 60 days, and the department must make a determination on any requested review within 21 days. Requires the department to annually post deidentified results of its sample review of resolution plans.

Shifts responsibility for monitoring compliance with the federal Home and Community-Based Services (HCBS) Final Rule from regional centers to the State Department of Developmental Services, beginning July 1, 2026. The department must post information on its website and update it at least every 6 months.

DEFINITION

Authorizes the department to establish a distinct service code and rate model for family teaching homes that is separate from the family home agency model, considering costs for housing, staffing, and census. Requires family home agencies providing family teaching homes to use this separate code and rate model if established.

Floor votes · Senate Mar 20, 2025 · Assembly Jun 29, 2026

How they voted

2810
Passed · 2 other
Total votes 40
Mar 20, 2025
D Democratic30
28 Yea 2
93% Yea
R Republican10
10 Nay
100% Nay
Vote distribution
All Yea All Nay Mixed No data
Full legislative history

Actions timeline

Total actions
19
Key actions
5
Committee
2
Amendments
3
Jul 13, 2026
Signed into law
Approved by the Governor.
legislature
Jun 29, 2026
Upper · Passed
Assembly amendments concurred in. (Ayes 32. Noes 0. Page 5072.) Ordered to engrossing and enrolling.
upper
Jun 29, 2026
Introduced
In Senate. Concurrence in Assembly amendments pending.
upper
Jun 29, 2026
Lower · Passed
Read third time. Passed. (Ayes 73. Noes 1. Page 5903.) Ordered to the Senate.
lower
Jun 26, 2026
Lower · Passed
From committee with author's amendments. Read second time and amended. Re-referred to Com. on BUDGET.
lower
Mar 24, 2025
Committee
Referred to Com. on BUDGET.
lower
Mar 20, 2025
Upper · Passed
Read third time. Passed. (Ayes 28. Noes 10. Page 451.) Ordered to the Assembly.
upper
Feb 5, 2025
Committee
Referred to Com. on B. & F. R.
upper
Jan 23, 2025
Introduced
Introduced. Read first time. To Com. on RLS. for assignment. To print.
upper
0 primary · 0 co-sponsors

Sponsors

No sponsor information available.