BILL ANALYSIS Ó AB 274 Page 1 Date of Hearing: May 1, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 274 (Bonilla) - As Amended: April 24, 2013 Policy Committee: Human ServicesVote:7 - 0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill makes several changes to the Child Care and Development Services Act (CCDSA) as it pertains to the Alternate Payment Program (APP). Specifically, this bill: 1)Authorizes child care providers to submit attendance records that serve to demonstrate the child is receiving services for which he or she has been certified electronically on a monthly basis to the APP. 2)Allows APPs to maintain records electronically, as permitted by state and federal auditing requirements. 3)Requires the California Department of Education (CDE), upon request of a child care contractor on or after January 1, 2016, to request the State Controller process the payment to the contractor through direct deposit. FISCAL EFFECT 1)Automation costs of $200,000 to $500,000 (GF) to update CDE's payment system for child care providers in order to allow for direct deposit. 2)One-time costs of approximately $200,000 (GF) for CDE to develop regulations associated with the new attendance requirements and the electronic certification. 3)On-going costs of up to $65,000 (GF) for the increased auditing requirements for CDE. AB 274 Page 2 4)On-going minor costs, under $10,000 (GF) per year, for transaction fees associated with direct deposit. COMMENTS 1)Purpose . The intent of this legislation is to bring greater efficiency to the state's subsidized child care system in order to maximize resources and better serve families. According to the author, the state's current delivery system is over burdensome and does not reflect current technological advances. The author hopes this bill will allow child care contractors that serve working poor families to use technology to maximize contract dollars and defray costs associated with complying with outdated regulations. The author contends that by allowing for automatic deposit, this bill will allow contractors to more quickly provide reimbursement to small businesses delivering services to working parents and their children. 2)Alternative Payment Program . There are currently 81 APPs contracted with CDE. These APPs are funded by state and federal funds, to provide an array of support and payment services to enable low-income and eligible families to access subsidized child care. APPs do not provide direct child development services or programs, rather they provide families who are participating in welfare-to-work activities under CalWORKs, or who are low-income but do not qualify for CalWORKs, with subsidized child care vouchers. Child care vouchers can be used to access child care at either a child development center, family child care home, or with a license-exempt child care provider. 3)Related Legislation . AB 245 (Portantino), 2011, required CDE, at the request of a child care contractor, request the State Controller to make a payment via direct deposit into the contractor's account. That bill was held on the Senate Appropriations Committee Suspense File. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081 AB 274 Page 3