BILL ANALYSIS Ó AB 596 Page 1 Date of Hearing: March 30, 2011 ASSEMBLY COMMITTEE ON EDUCATION Julia Brownley, Chair AB 596 (Carter) - As Introduced: February 16, 2011 ÝNote: This bill has been double referred to the Assembly Human Services Committee and will be heard as it relates to issues under its jurisdiction.] SUBJECT : Child care: CalWORKs recipients: rights SUMMARY : Requires the California Department of Education (CDE) to collaborate with welfare rights and legal services advocates to develop and adopt regulations and other policy statements to provide California Work Opportunity and Responsibility to Kids (CalWORKs) program recipients of child care the same level of due process protections and procedural protections that are afforded to public assistance recipients pursuant to specified sections in the Welfare and Institutions Code (WIC) and their corresponding regulations. EXISTING LAW : 1)Establishes an appeals process for recipients of public social service programs administered by the Department of Social Services (DSS). Requires that upon filing a request with the DSS, an applicant or recipient of public social service programs is provided with an opportunity for a state hearing (WIC Section 10950). 2)Provides that a hearing shall be conducted by an administrative law judge employed by the DSS, the director of DSS, or the Office of Administrative Hearings (WIC Section 10953). 3)Specifies a process and timeline by which the hearings shall be conducted, including the requirement that the proceedings at the hearing shall be reported by a phonographic reporter or otherwise perpetuated by mechanical, electronic, or other means capable of reproduction or transcription (WIC Sections 10950 et seq.). 4)Establishes eligibility for child care services and child development programs administered by the CDE and requires the AB 596 Page 2 Superintendent of Public Instruction (SPI) to adopt rules and regulations on eligibility, enrollment and priority of services needed for implementation (Education Code (EC) Section 8263). FISCAL EFFECT : Unknown COMMENTS : Background . In fiscal year (FY) 2010-11, $2.669 billion was provided for child care and development programs from state and federal funds, enrolling an estimated 415,715 children from birth through age 12. The proposed FY 2011-12 budget decreases the total funding by $500.7 million. Eligibility is based on eligibility for the CalWORKs program or income (75% of state median income). CalWORKs is a temporary cash aid program for families with children. Recipients are required to engage in work or education/training as a condition for aid and receive subsidized child care services to assist them in this endeavor. According to the DSS, the child care program is administered in three stages to help a family transition from immediate, short-term child care needs to stable, long-term child care as a family becomes stable and is no longer reliant on CalWORKs aid. The three stages of CalWORKs child care is as follows: Stage 1: Stage 1 is provided upon receipt of CalWORKs benefits and may last approximately six months or until a family's situation is considered stable. Stage 2: A family transfers to Stage 2 once the work situation is stable. Families are eligible for subsidized child care for up to two years after they are no longer eligible for CalWORKs aid. Stage 3: Once a family stops receiving CalWORKs grants and has received the maximum two years of child care services under Stage 2, it can maintain child care benefits if it meets income eligibility and if there are slots available under Stage 3 child care. Administration of child care : Stage 1 child care is administered by county welfare departments and overseen by the DSS, while Stages 2 and 3 are administered by the CDE through a voucher system that enables recipients to choose the child care arrangements that work best for them, including licensed centers, licensed family child care homes, or license-exempt AB 596 Page 3 care (e.g., care by a relative). The voucher program is administered by Alternative Payment Programs (APPs) selected by the CDE. Appeals Processes : Because CalWORKs child care benefits are administered by both the DSS and the CDE, there are two different processes for appeals, depending on which stage of benefits a recipient wishes to appeal. The process for DSS appeals is specified in the WIC (Chapter 7, Part 2, Division 9) and DSS regulations. WIC Section 10950 specifies that an applicant is provided an opportunity for a state hearing upon filing a request within 90 days of an action if any applicant is "dissatisfied with any action of the county department relating to his or her application for or receipt of public social services, if his or her application is not acted upon with reasonable promptness or if any person who desires to apply for public social services is refused the opportunity to submit a signed application therefore, and is dissatisfied with that refusal." Existing law requires the hearings to be conducted by an administrative law judge employed by the DSS, the director of DSS, or the Office of Administrative Hearings. Existing law also specifies a timeline for the appeal and requires the hearings to be reported by a phonograhic reporter or other mechanical, electronic or other means capable of reproduction or transcription. The CDE appeals process is specified through Title 5 regulations, established through authority in the EC authorizing the SPI to adopt regulations to implement the child care and development program. Title 5 Section 18120 specifies that a parent may file a request for a hearing with the contractor within 14 calendar days s/he receives notification of an action from the contractor, called the Notification of Action (NOA). The hearing is conducted by an administrative staff person called the "hearing officer", who is a staff of the contractor in a higher level of authority than the staff person who made the contested decision. The regulations do not require the hearing to be transcribed or recorded. If the recipient disagrees with the written decision from the hearing officer (contractor), s/he has 14 calendar days to file an appeal with the CDE's Child Development Division (CDD) to conduct a second level of review. The regulations authorize the CDD to get copies of the basic data file from the contractor and conduct any investigations, interviews or mediation necessary to resolve AB 596 Page 4 the appeal. According to the CDE, the appeal coordinator contacts the recipients to provide CDD contact information and to answer any questions about the process. The CDD coordinator then reviews parent statements and information in the file provided by the contractor and makes a determination based on the regulations and statutes related to the NOA. In 2009-10, 838 CDD appeals were filed. Of the appeals that received a ruling, the CDD upheld a local decision to deny a claim in 86% of the cases and granted the appeal in 14% of the cases. There is no data on the number of hearings conducted by the local contractors, although the CDE estimates the number to be 10 times the number of appeals received by the CDD. Need for the bill . The author states, "Current law does not address due process or procedural protections for Stage 2 and 3 child care recipients and they must use an appeal process that fails to include basic due process protections afforded to Stage 1 recipients. This un-equitable policy has resulted with numerous complaints from legal services providers throughout the state about the lack of due process afforded to Stage 2 and 3 child care recipients." This bill requires the CDE to collaborate with welfare rights and legal services advocates to develop and adopt regulations and other policy statements to provide CalWORKs recipients of child care the same level of due process protections and procedural protections that are afforded to public assistance recipients as specified in the WIC. This would require the CDE to utilize administrative law judges similar to that used by the DSS for all Stage 2 and 3 appeals, including first level appeals currently handled by contractors. Legal advocates familiar with both processes have expressed concerns that the CDE process is too casual in nature and lacks protections afforded by the DSS process, particularly with the review being conducted by the same agency that issued the NOA and not by an impartial entity with legal background. Legal advocates also say that not having transcripts of the hearing conducted by the contractor is another problem. There is less accountability and no documentation that the hearing was conducted fairly. Advocates state that the burden of proof in the DSS process is with the decision maker whereas the burden of proof in the CDE process is with the recipient. The DSS process allows the recipients to bring support witnesses to the hearings whereas the CDE process allows only the person affected by the hearing to attend. Another area of concern is in the number of days a recipient is AB 596 Page 5 given to file an appeal once s/he receives the NOA. The DSS process allows appeals to be submitted within 90 days whereas the CDE process allows only 14 calendar days. In order to ensure that the DSS and the CDE appeals processes are equal, the CDE would have to hire ALJs or contract with the Office of Administrative Hearings, which may not be possible during difficult budget times. Instead, the author may wish to consider requiring the CDE to work with welfare rights and legal services advocates to identify and implement features of the DSS process that can be done with no or low costs (e.g., expanding the appeal window from 14 to 90 days, allowing recipients to bring witnesses to the hearings, etc.). The bill would institute the new appeals process only for CalWORKs cases. However, CDE regulations apply to all CDE-administered programs, including the State Preschool Program. The bill should be amended to broaden the application of the appeal process to all CDE-administered child care and development programs. Arguments in Support . The Western Center on Law and Poverty states, "CalWORKs is one of the most effective programs operated by the State of California. In the past 13 years, the program has helped tens of thousands of families move from poverty to self-sufficiency while reducing the caseload by nearly fifty percent. CalWORKs not only encourages families to go to work by helping adults improve their employment skills and seek employment, it allows them to do this by providing child care. The due process and procedural protections offered a CalWORKs recipient placed in Stage 2 are not as rigorous as those placed in Stage 1, even though the result of losing one's child care would be the same, their inability to meet CalWORKs requirements and likely loss of basic needs cash assistance." REGISTERED SUPPORT / OPPOSITION : Support Coalition of California Welfare Rights Organizations (sponsor) American Federation of State, County and Municipal Employees California Communities United Institute Western Center on Law and Poverty Opposition AB 596 Page 6 None on file Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087