BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 812|
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CONSENT
Bill No: AB 812
Author: Mitchell (D)
Amended: 6/26/13 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE : 9-0, 7/3/13
AYES: Liu, Wyland, Block, Correa, Hancock, Hueso, Huff,
Monning, Torres
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 77-0, 5/29/13 (Consent) - See last page for
vote
SUBJECT : Child care: contracts
SOURCE : Author
DIGEST : This bill eliminates the required 90-day notice prior
to the immediate termination of a child care contract, prohibits
a contractor from continuing to provide care to children while
appealing an immediate termination, expands the reasons for
which a contract may be immediately terminated, and makes other
changes relative to contracts with the California Department of
Education (CDE) for child care and development services.
ANALYSIS :
Existing law:
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1.Authorizes local government agencies or non-profit
organizations to contract with CDE to operate Alternative
Payment Programs and provide alternative payments and support
services to parents and child development providers.
Alternative Payment Programs help parents arrange child care
services and makes payments directly to the provider, which
may be in-home care, family child care or center-based care,
and either licensed or license-exempt.
Contract classification.
2.Requires the Superintendent of Public Instruction to establish
a contract classification system to identify, monitor and
provide technical assistance to contracted child care and
development providers and Alternative Payment Programs.
3.Defines a "clear contract" as a designation of a contracted
agency that is in full compliance withal applicable statutory
provisions, funding terms and conditions, and applicable
program quality guidelines.
4.Defines a "provisional contract" as designation of a newly
awarded contract to an agency, under which the timeframe of
this status is at the discretion of CDE.
5.Defines a "conditional contract" as a designation of a high
risk contracted child care agency that is out of fiscal or
programmatic compliance.
6.Prohibits a child care agency under a "conditional contract"
from applying for additional state child development program
funds.
Contract termination
7.Authorizes CDE to suspend or immediately terminate a contract
for chronic fiscal or program violations of a felony nature,
which include the following violations:
A. Fraud or conspiracy to defraud.
B. Misuse of state funds in violation with the California
Accounting Manual.
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C. Embezzlement.
D. Threats of bodily or other harm to state officials.
E. Bribery or attempted bribery of a state official.
F. Unsafe or unhealthy physical environment or facility.
G. Substantiated abuse or molestation of children.
H. Failure to report suspected child abuse or molestation.
I. Theft of supplies, equipment or food.
J. Places a person in position of fiscal responsibility or
control who has been convicted of specified crimes,
including financial crimes.
1.Requires CDE to provide to a contractor a 90-day notice of
suspension or termination except if there is imminent danger
to the health and safety of children.
2.Provides due process rights to a child care agency, which
include the right to an independent appeals process
administered by the Office of Administrative Hearings.
3.Authorizes CDE to suspend or terminate a contract of an agency
that places a person in a position of fiscal responsibility or
control who has been convicted of burglary, forgery,
counterfeiting, larceny, embezzlement, or extortion.
4.Current regulations establish an internal dispute review
process within CDE.
This bill eliminates the required 90-day notice prior to the
immediate termination of a child care contract, prohibits a
contractor from continuing to provide care to children while
appealing an immediate termination, expands the reasons for
which a contract may be immediately terminated, and makes other
changes relative to contracts with CDE for child care and
development services. Specifically, this bill:
Immediate termination of a contract
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1.Eliminates the requirement that fiscal or program violations
be chronic.
2.Expands the reasons for which the CDE may immediately
terminate a contract to include:
A. Cessation of operations without the permission of CDE or
abandoning the contracts.
B. Failure of a program to fully reimburse a significant
number of approved child care providers within 15 calendar
days after the date set in the plan for timely payments
adopted by the contracting agency, unless the failure is
due to a delay in receiving apportionments from the state.
C. Failure to pay salaries owed to employees, pay federal
payroll tax, or fully reimburse a significant number of
child care providers for more than 15 days after the
employee salaries, federal payroll taxes, or reimbursement
payments were due, unless failure is due to a delay in
receiving apportionments from the state.
1.Eliminates the requirement that CDE provide written
notification 90-days prior to the immediate termination of a
contract, and deletes the condition that an immediate
termination be based on imminent danger to the health and
welfare of children.
2.Prohibits a contractor from continuing to operate during the
period of appeal of an immediate termination of the contract,
and deletes the condition that a contractor ceases operation
only if the termination is based on imminent danger to the
health or welfare of children.
3.Requires a notice of immediate termination to be served on the
contracting agency by personal service or at the last address
on file with CDE, by overnight mail or certified mail.
Provides that service may be proved in the manner authorized
in a civil action, and that service by mail is complete at the
time of deposit. (Notice of immediate termination is still
required, but does not give contractor 90-days prior to
termination.)
4.Deletes from the list of offenses for which, if committed by a
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person in a position of fiscal responsibility, a contract may
be immediately terminated, burglary, forgery, counterfeiting,
larceny, embezzlement, or extortion.
5.Replaces on the list of offenses for which, if committed by a
person in a position of fiscal responsibility, a contract may
be immediately terminated, a crime involving misuse or
misappropriation of state or federal funds, or a state or
federal crime involving moral turpitude.
6.Eliminates obsolete references to the suspension of contracts.
Conditional contract status
7.Deems a contracting agency (all contracts with that agency) to
be on conditional status if that agency has at least one
contract on conditional status.
8.Removes the prohibition on a contractor with conditional
status from applying for additional child care and development
funds.
9.Clarifies that a conditional contract status may be imposed
for both fiscal and programmatic non-compliance (not just one
or the other).
Internal appeal
10.Requires CDE to provide an internal appeal procedure to
resolve a dispute between CDE and a contracting agency
regarding a dispute regarding the interpretation or
application of a term or condition of a contract, or to
dispute a finding made by CDE resulting from a fiscal or
programmatic review, including an error rate notification.
11.Requires a contracting agency to have the right to appeal the
finding of a fiscal or programmatic review, including an error
rate finding, by submitting a request for appeal in accordance
with the internal appeal procedure developed by CDE.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/13/13)
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Superintendent of Public Instruction
American Academy of Pediatrics
American Federation of State, County and Municipal Employees
California Policy Immigrant Center
Children's Advocacy Institute
Coalition of Humane Immigrant Rights of Los Angeles
Community Clinic Association of LA County
Mexican American Defense and Education Fund
ARGUMENTS IN SUPPORT : According to the author, "In the last
two years, there have been incidents where child care
contractors involved in financial malfeasance ceased operating
or ceased reimbursing providers, but would not relinquish their
contracts. In these circumstances, CDE had no authority to
immediately remove those contracts and re-direct funding to
contractors who would continue services to eligible children and
families. CDE could only withhold funding, which did nothing to
protect children."
ASSEMBLY FLOOR : 77-0, 5/29/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,
Jones, Jones-Sawyer, Levine, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Holden, Linder, Vacancy
PQ:ej 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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