BILL NUMBER: AB 812 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 22, 2013
INTRODUCED BY Assembly Member Mitchell
FEBRUARY 21, 2013
An act to amend Sections 8257, 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 amended, Mitchell. Child care: contracts: termination
and suspension.
(1) Existing law requires the State
Department of Education to apply sanctions against contracting
agencies that have serious licensing violations, as defined and
reported by the State Department of Social Services and provide 90
days ' written notification to any contractor whose
agreement is being terminated, unless there is imminent danger to the
health and welfare of children if agency operation is not terminated
promptly.
This bill would require a 90-day written notification as
specified, except in the case of certain immediate
terminations.
(1)
(2) Existing law requires the State Department
of Education department 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)
(3) 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)
(4) 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)
(5) 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)
(6) 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 8257 of
the Education Code is amended to read:
8257. The department shall do all of the following in
administering the provisions of this chapter:
(a) Apply sanctions against contracting agencies that have serious
licensing violations, as defined and reported by the State
Department of Social Services pursuant to Section 1544 of the Health
and Safety Code.
(b) Provide Except in the case of
immediate terminations taken pursuant to Sections 8406.7 or 8406.9,
provide 90 days' written notification to any contractor whose
agreement is being terminated , except if there is imminent
danger to the health and welfare of children if agency operation is
not terminated more promptly . Notwithstanding Article 18
(commencing with Section 8400), the department shall establish
procedures for placing a contractor whose agreement is being
terminated into receivership. Action to initiate receivership shall
be at the discretion of the department, and may be taken against a
contractor whose agreement is being terminated either immediately or
within 90 days. The receiver shall not be a department employee. The
receiver shall have sufficient experience in the administration of
child care and development programs to ensure compliance with the
terms of the receivership.
SECTION 1. SEC. 2. Section 8402 of
the Education Code is amended to read:
8402. (a) The department shall provide an
independent appeal procedure to each contracting agency providing
child care and development services pursuant to Section 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)
(1) Termination of a contracting agency's contract.
(b)
(2) 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)
(3) 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.
(b) Before filing an appeal petition for an action taken pursuant
to paragraph (2) or (3) of subdivision (a), the contracting agency
shall have submitted all previously required standard monthly or
quarterly reporting forms to the department.
SEC. 2. SEC. 3. 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 of Division 3 of
Title 2 of the Government Code), except as otherwise directed in
this article.
SEC. 3. SEC. 4. Section 8406.6 of
the Education Code is amended to read:
8406.6. The Superintendent 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 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 contract agency for a new or different type of service
or 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 department and is given to ensure that the
contracting agency can demonstrate fiscal and programmatic compliance
before the contract is designated as a clear contract. The contract
status shall be reviewed annually.
(c) Conditional contract. This designation applies to a high-risk
contract awarded to a contracting agency that evidences fiscal or
programmatic noncompliance, or both fiscal and programmatic
noncompliance. A contracting agency with one or more contracts
designated as conditional 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 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 department.
SEC. 4. SEC. 5. Section 8406.7 of
the Education Code is amended to read:
8406.7. (a) A contracting agency that evidences any of the
following acts or omissions may have its contract or contracts
immediately terminated if there is documented evidence of the acts or
omissions, and upon review and recommendation of the general counsel
of the department:
(1) Fraud, or conspiracy to defraud.
(2) Misuse or misappropriation of state or federal funds,
including a violation of Section 8406.9.
(3) Embezzlement.
(4) Threats of bodily or other harm to a state 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 the 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) this
chapter 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 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.
(d) The department shall advise child care and development
contractors of the provisions of this section within 30 working days
of the effective date of the act amending this section during the
2013-14 Regular Session of the Legislature.
SEC. 5. SEC. 6. Section 8406.9 of
the Education Code is amended to read:
8406.9. (a) An agency that has in place or 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, may have its contract immediately terminated pursuant to
Section 8406.7 if there is documented evidence of the conviction, and
upon review and recommendation of the general counsel of the
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) If the agency provides evidence to the 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 department shall withdraw the termination action.
SEC. 6. SEC. 7. Section 8407 of the
Education Code is amended to read:
8407. Except for causes listed in Sections 8406.7 and 8406.9,
termination of a child care and development contract shall not occur
without good cause and without notice as described in Section 8406 at
least 90 days before the effective date given in the notice of
termination.
SEC. 7. SEC. 8. 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 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.