BILL NUMBER: AB 812 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Mitchell
FEBRUARY 21, 2013
An act to amend Sections 8402, 8403, 8406.6, 8406.7, 8406.9, 8407,
and 8408 of the Education Code, relating to child care.
LEGISLATIVE COUNSEL'S DIGEST
AB 812, as introduced, Mitchell. Child care: contracts:
termination and suspension.
(1) Existing law requires the State Department of Education to
provide an independent appeal procedure in certain instances,
including, but not limited to, contract termination or suspension, to
each contracting agency providing specified child care and
development services. Existing law requires the contracting agency to
have submitted all previously required standard monthly or quarterly
reporting forms before filing an appeal petition.
This bill would repeal the requirement that the department provide
an independent appeal procedure, as described above, in the instance
of contract suspension. The bill would also repeal the requirement
that the contracting agency submit all previously required standard
monthly or quarterly reporting forms before filing an appeal
petition.
(2) Existing law requires the Superintendent of Public Instruction
to establish a contract classification system with 3 classes of
contract designations; a clear contract, a provisional contract, and
a conditional contract, as specified.
This bill would revise the 3 classes of contract designations, as
specified.
(3) Existing law authorizes any contracting agency that evidences
chronic fiscal or program violations of a felony nature, as
specified, to have its contract immediately suspended or terminated
provided there is documented evidence of the violations and upon
review and recommendation of the general counsel of the department.
This bill would instead authorize a contracting agency that
evidences any specified acts or omissions to have its contract or
contracts immediately terminated provided there is documented
evidence of the acts or omission and upon review and recommendation
of the general counsel of the state department. The bill would add
additional acts or omissions, as described, that may result in
immediate termination of an agency's contract or contracts and
require the notice of immediate termination of a contract to be
served in a specified manner.
(4) Existing law authorizes a contracting agency that places a
person in a position of fiscal responsibility or control who has been
convicted of certain crimes to have its contract immediately
suspended or terminated if there is documented evidence of the
conviction and upon review and recommendation of the general counsel
of the department. Existing law authorizes a contracting agency whose
contract is terminated for the reasons described above to appeal the
contract termination, and require the contract termination to occur
after notice, as specified, is provided at least 90 days before
termination.
This bill would instead authorize a contracting agency that places
a person in a position of fiscal responsibility or control who has
been convicted of a crime involving misuse or misappropriation of
state or federal funds, or a state or federal crime involving moral
turpitude, to have its contract immediately terminated if there is
documented evidence of the conviction and upon review and
recommendation of the general counsel of the department. The bill
would repeal the authority of a contracting agency whose contract is
terminated for the reasons described above to appeal the contract
termination, and the requirement that this termination occur after
notice, as specified, is provided at least 90 days before
termination.
(5) Existing law authorizes local contracting agencies to continue
to operate under their contract during an appeal of termination,
unless the specified action is based on imminent danger to the health
and welfare of children. Existing law requires, if the contract is
being terminated based on imminent danger to the health and welfare
of children, the reason for the termination to be specified by the
department in its notice of termination.
This bill would instead authorize local contracting agencies to
continue to operate under their contract during an appeal of
termination, unless the action is an immediate termination action, as
specified, in which case a local contracting agency would not be
authorized to continue to operate under the contract after the
effective date given in the notice of immediate termination.
This bill would make conforming and nonsubstantive changes to
these provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 8402 of the Education Code is amended to read:
8402. The State Department of Education
department shall provide an independent appeal procedure to
each contracting agency providing child care and development services
pursuant to Section 8262. Prior to filing an appeal
petition, the contracting agency shall have submitted all previously
required standard monthly or quarterly reporting forms to the State
Department of Education. The appeal procedure 8262
that shall be conducted by the Office of Administrative
Hearings and shall be provided upon an appeal petition of
the contracting agency in any of the following circumstances:
(a) Termination or suspension of a contracting
agency's contract.
(b) Denial of more than 4 percent or twenty-five thousand dollars
($25,000), whichever is less, of a local contracting agency's
contracted payment for services schedule.
(c) Demand for remittance of an overpayment of more than 4 percent
or twenty-five thousand dollars ($25,000), whichever is less, of a
local contracting agency's annual contract.
SEC. 2. Section 8403 of the Education Code is amended to read:
8403. All hearings required by Section 8402 shall be
conducted according to the provisions of the Administrative Procedure
Act (Chapter 5 (commencing with Section 11500) of Part 1,
1 of Division 3 of Title 2 of the Government
Code), except as otherwise directed in this article.
SEC. 3. Section 8406.6 of the Education Code is amended to read:
8406.6. The Superintendent of Public Instruction
shall establish a contract classification system for
purposes of identifying, monitoring, and providing technical
assistance to contractors as follows:
(a) Clear contract. This designation shall be given to
contracted agencies that are in full compliance with all applicable
statutory provisions, funding terms and conditions, and applicable
program quality guidelines a contract that is neither
a provisional contract, as described in subdivision (b),
nor a conditional contract, as described in subdivision (c) .
(b) Provisional contract. This designation applies to a
contracting agency's first contract for any particular service, if by
an existing contracted agencies,
contract agency for a new or different type of service or
agencies that are awarded a new by a
contracting agency that does not have an existing contract for
services. The time frame of a provisional contract is at the
discretion of the State Department of Education
department and is given to ensure demonstrated
that the contracting agency can demonstrate
fiscal and programmatic compliance before granting
the contract is designated as a clear contract
status . The contract status shall be reviewed annually.
(c) Conditional contract. This designation applies to a
high-risk contracted agencies contract
awarded to a contracting agency that evidence
evidences fiscal and or
programmatic noncompliance , or both fiscal and programmatic
noncompliance . These agencies shall not be eligible
to apply for additional State Child Development program funds, and
are A contracting agency with one or more contracts
designated as co nditional is deemed to be on conditional
status with the department for all child care and development
program purposes and is subject to any restrictions deemed
reasonable to secure compliance. The conditional contract shall
include a bill of particulars detailing the items of noncompliance,
the standards that must be met to avoid termination of contract and
to qualify the agency for clear contract status, and technical
assistance plan. Failure to demonstrate substantive progress toward
fiscal or program compliance within six months of that designation
shall constitute a breach of contract and be
may subject the contract to termination for any
applicable cause specified in Section 8406.7 or 8407, in
accordance with Section 8402.
(d) Agencies with conditional contracts shall receive technical
assistance from the Child Development Division of the State
Department of Education department .
SEC. 4. Section 8406.7 of the Education Code is amended to read:
8406.7. (a) Any A contracting
agency that evidences chronic fiscal or program violations
of a felony nature any of the following acts or
omissions may have its contract suspended or
or contracts immediately terminated immediately,
provided if there is documented evidence
thereof, of the acts or omissions, and
upon review and recommendation of the general counsel of the
State Department of Education. A fiscal or programmatic violation
constituting a breach of contract includes one or more of the
following department :
(1) Fraud, or conspiracy to defraud.
(2) Misuse or misappropriation of state or federal
funds in violation of the State of California
Accounting Manual , including a violation of Section
8406.9 .
(3) Embezzlement.
(4) Threats of bodily or other harm to a state
officials official .
(5) Bribery or attempted bribery of a state official.
(6) Unsafe or unhealthy physical environment or facility.
(7) Substantiated abuse or molestation of children.
(8) Failure to report suspected child abuse or molestation.
(9) Theft of supplies, equipment , or food.
(10) Cessation of operations without the permission of the
department, or acts or omissions evidencing abandonment of the
contract or contracts.
(11) Failure of a program operating pursuant to Article 3
(commencing with Section 8220) or Article 15.5 (commencing with
Section 8350) to reimburse a significant number of approved child
care providers, as determined by the department, within 15 calendar
days after the date set in a plan for timely payments to providers
adopted by the contracting agency pursuant to Section 18226 of Title
5 of the California Code of Regulations, unless the failure is
attributable to a delay in receiving apportionments from the state.
(12) Failure of a program not operating pursuant to Article 3
(commencing with Section 8220) or Article 15.5 (commencing with
Section 8350) to pay salaries owed to employees, pay federal payroll
tax, or reimburse a significant number of child care providers, as
determined by the department, affiliated with a contracting agency
pursuant to Article 8.5 (commencing with Section 8245) for more than
15 days after the employee salaries, federal payroll taxes, or
reimbursement payments were due, unless the failure is attributable
to a delay in receiving apportionments from the state.
(b) An agency whose contract is immediately
terminated for cause pursuant to this section
retains appeal rights in accordance with Section 8402.
(c) Notwithstanding any service provision in the Administrative
Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code), a notice of immediate
termination shall be served on the contracting agency by personal
service or at the last address on file with the department, by
overnight mail or certified mail. Service may be proved in the manner
authorized in civil action. Service by mail is complete at the time
of deposit.
(c)
(d) The State Department of Education
department shall advise child care and
development contractors of the provision
provisions of this section within 30 working days of
its enactment the effective date of the act amending
this section during the 2013- 14 Regular Session of the
Legislature .
SEC. 5. Section 8406.9 of the Education Code is amended to read:
8406.9. (a) An agency that places a person in a position of
fiscal responsibility or control who has been convicted of
any a crime specified in Chapter 2
(commencing with Section 458) of, Chapter 4 (commencing with Section
470) of, Chapter 5 (commencing with Section 484) of, Chapter 6
(commencing with Section 503) of, or Chapter 7 (commencing with
Section 518) of, Title 13 of Part 1 of the Penal Code
involving misuse or misappropriation of state or federal
funds, or a state or federal crime involving moral turpitude,
may have its contract suspended or
immediately terminated immediately
pursuant to Section 8406.7 if there is documented evidence of
the conviction, and upon review and recommendation of the general
counsel of the State Department of Education
department .
(b) For purposes of this section, "position of fiscal
responsibility or control" includes any authority to direct or
control expenditure of, or any access to, state or federal child care
and development funds received pursuant to this chapter whether that
authority or access is conferred based on the person's status as an
employee, director, manager, board member, or volunteer, or based on
any other status.
(c) An agency whose contract is terminated pursuant to this
section may appeal that action in accordance with Section 8402.
(d) Termination pursuant to this section shall not occur without
notice as described in Section 8406 at least 90 days prior to
termination.
(e)
(c) If the agency provides evidence to the
State Department of Education department, before the
effective date given in the notice of immediate termination,
that the convicted person has been removed from the position of
fiscal responsibility or control and provides assurance that the
person will not be returned to a position of fiscal responsibility or
control, the State Department of Education
department shall withdraw the termination action.
SEC. 6. Section 8407 of the Education Code is amended to read:
8407. Except for causes listed in Section
Sections 8406.7 and 8406.9 , termination of
existing funding a child care and development
contract shall not occur without good cause and without notice
as described in Section 8406 at least 90 days prior to
before the effective date given in the notice of
termination.
SEC. 7. Section 8408 of the Education Code is amended to read:
8408. Actions as defined in subdivisions (a) to (c), inclusive,
of Section 8402 shall remain in effect during the appeal process.
However, local contracting agencies may continue to operate under the
contract during an appeal of termination, unless the action is
based on imminent danger to the health or welfare of
children. If the local agency contract is being terminated for this
reason, the reason shall be specified by the department in its notice
of termination an immediate termination action taken
pursuant to Section 8406.7 or 8406.9, in which case a contracting
agency shall not continue to operate under the contract after the
effective date given in the notice of immediate
termination .