BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 596
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          Date of Hearing:   April 26, 2011

                        ASSEMBLY COMMITTEE ON HUMAN SERVICES
                                Jim Beall Jr., Chair
                 AB 596 (Carter) - As Introduced:  February 16, 2011
           
          SUBJECT  :  Child care: due process

           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 
            Superintendent of Public Instruction (SPI) to adopt rules and 
            regulations on eligibility, enrollment and priority of 
            services needed for implementation (Education Code Section 
            8263).








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           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 
          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 
          care (e.g., care by a relative).  The voucher program is 
          administered by Alternative Payment Programs (APPs) selected by 
          the CDE.








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           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 Education Code 
          section 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 of when 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 the appeal.  According to the 
          CDE, the appeal coordinator contacts the recipients to provide 
          CDD contact information and to answer any questions about the 








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          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 
          given to file an appeal once s/he receives the NOA.  The DSS 
          process allows appeals to be submitted within 90 days whereas 








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          the CDE process allows only 14 calendar days.  

           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."

           Arguments in opposition
           The Child Development Policy Institute (CDPI) and Professional 
          Association for Childhood Education (PACE) oppose expanding the 
          DSS due process and procedures to Stages 2 and 3 based on cost 
          and policy.

          CDPI agrees that strengthening the appeals process may be in 
          order but argues that a "full-blown, quasi-legal process?is both 
          costly and unwarranted?because CDE, LEAs, and non-profit 
          contractors are not so staffed and funded."

          PACE believes that this bill will affect the availability of 
          child care.  For example, current CalWORKs regulations provide 
          90 days for an appeal.  This could result in continuing child 
          care subsidies for ineligible parents for up to 90 days, a 
          significant expense to the state, and loss of child care for 
          eligible parents on the waiting lists.

           Suggested Amendments
           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 Committee suggests 
          that the author may wish to consider amending the bill to 
          require 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.

           SECOND COMMITTEE OF REFERENCE  .  This bill was previously heard 








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          in the Assembly Education Committee on March 30, 2011, and was 
          approved on a 7-3 vote.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Communities United Institute (CalComUI)
          Child Care Law Center
          Western Center on Law and Poverty

           Opposition 
           
          Child Development Policy Institute
          Professional Association for Childhood Education (PACE)
           
          Analysis Prepared by  :    Frances Chacon / HUM. S. / (916) 
          319-2089