BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 271


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          ASSEMBLY THIRD READING


          AB  
          271 (Obernolte)


          As Amended  May 28, 2015


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes |Ayes                   |Noes              |
          |                |      |                       |                  |
          |                |      |                       |                  |
          |----------------+------+-----------------------+------------------|
          |Human Services  |7-0   |Chu, Mayes, Calderon,  |                  |
          |                |      |Lopez, Maienschein,    |                  |
          |                |      |Mark Stone, Thurmond   |                  |
          |                |      |                       |                  |
          |----------------+------+-----------------------+------------------|
          |Appropriations  |17-0  |Gomez, Bigelow, Bonta, |                  |
          |                |      |Calderon, Chang, Daly, |                  |
          |                |      |Eggman, Gallagher,     |                  |
          |                |      |Eduardo Garcia,        |                  |
          |                |      |Gordon, Holden, Jones, |                  |
          |                |      |Quirk, Rendon, Wagner, |                  |
          |                |      |Weber, Wood            |                  |
          |                |      |                       |                  |
          |                |      |                       |                  |
           ------------------------------------------------------------------ 


          SUMMARY:  Expands the authority granted under current law for  
          Alternative Payment Programs (APPs) and child care providers to  
          use electronic or other alternative methods for the storage of  
          records.  Specifically, this bill: 








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          1)Authorizes APPs and child care providers to retain child care  
            records electronically, and requires any conversion from a paper  
            record to an electronic format, as well as the storage of the  
            electronic record, to comply with minimum state and federal  
            standards, as specified.
          2)Authorizes APPs and providers to use a digital signature, which  
            shall have the same force and effect as a manual signature,  
            provided state and federal standards are met, as specified.


          3)Deletes the requirement that APPs and child care providers only  
            store records electronically if the original documents were  
            created in electronic format.  Additionally expands the current  
            five-year requirement for the storage of original records, as  
            specified, to all records.


          EXISTING LAW:


          1)Establishes the California Child Care and Development Services  
            Act (CCDSA) to provide a comprehensive, community-based,  
            coordinated, and cost-effective system of child care and  
            development services for children from birth to age 13 with the  
            purpose of enhancing the social, emotional, physical, and  
            intellectual development of children.  (Education Code (EDC)  
            Sections 8200 and 8201)
          2)States the intent of the Legislature that all families have  
            access to child care and development services, regardless of  
            their demographic background, in order to help them attain  
            financial stability through employment, while maximizing growth  
            and development of their children, and enhancing their parenting  
            skills through participation in child care and development  
            programs.  (EDC Section 8202)


          3)Defines child care and development services as care and services  
            designed to meet a wide variety of needs of children and their  
            families, while their parents or guardians are working, in  








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            training, seeking employment, incapacitated, or in need of  
            respite.  (EDC Section 8208(i))


          4)Authorizes local government agencies or non-profit organizations  
            to contract with the California Department of Education (CDE) to  
            operate APPs and provide alternative payments and support  
            services to parents and child development providers.  (EDC  
            Section 8220)


          5)Establishes requirements and procedures APPs and child  
            development providers must follow as contracted agencies with  
            the CDE, including but not limited to tracking and reporting of  
            attendance, accounting and auditing requirements, and  
            reimbursement and payment procedures.  (EDC Section 8221.5)


          6)Requires any agency that contracts with CDE for the provision of  
            educational services to undergo a periodic audit regarding the  
            use of state and federal funds, as specified.  (EDC Section  
            33420)


          7)Requires agencies that receive state funds to, at the request of  
            the Superintendent of Public Instruction, make all records  
            pertaining to its state-funded programs available to the CDE, as  
            specified, and requires that all records be retained by each  
            agency for at least five years, as specified.  (EDC Section  
            33421)


          8)Permits APPs and child care providers to maintain records in  
            electronic format only if the original documents were created in  
            electronic format, as specified.  (EDC Section 8227.3)


          9)Establishes the Uniform Electronic Transactions Act (UETA),  
            which permits, but does not require, a record or signature to be  








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            created, generated, sent, communicated, received, stored, or  
            otherwise processed or used by electronic means or in electronic  
            form.  (Civil Code Section 1633.1 et seq.)


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill will result in one-time costs of  
          approximately $73,000 to train CDE audit staff, revise existing  
          audit procedures, update CDE's Audit Guide and develop  
          regulations.  This bill will also result in on-going costs, likely  
          in the several hundred thousands of dollars, for increased audit  
          fieldwork costs of approximately $3,980 per week.  For a small  
          agency a minimum of one additional week would be required.  For  
          larger agencies, it is unknown how many additional weeks would be  
          required due to a variety of recordkeeping complexities.


          COMMENTS:  


          Alternative Payment Programs:  There are currently 76 APPs  
          contracted with the CDE, funded through state and federal funds,  
          to provide an array of support and payment services that enable  
          low-income, 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 the California Work Opportunities  
          and Responsibility to Kids (CalWORKs) program, or who are  
          low-income but do not qualify for CalWORKs, with subsidized child  
          care vouchers.  Those child care vouchers can be used to access  
          child care at either a Title 5 or Title 22 child development  
          center or with a license-exempt child care provider who meets  
          certain criteria.  The voucher can only be used at a Title 22  
          program that accepts them, whereas all vouchers must be accepted  
          at Title 5 programs.


          Typically, a family that receives a voucher from an APP will then  
          be referred to a local child care resource and referral (R&R)  








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          network.  The R&R network, also funded through state and federal  
          dollars, will assist a family by helping to identify and access  
          the appropriate and desired child development program for the  
          child or children.  However, due to lack of state resources and  
          ongoing cuts to child care, access to programs able to accept  
          vouchers is limited.  Should the family be unable to find  
          appropriate care, they will be placed on a waiting list, if one is  
          available.


          Electronic records:  SB 820 (Sher), Chapter 428, Statutes of 1999,  
          enacted the Uniform Electronic Transactions Act (UETA), which is  
          described as the first comprehensive effort to prepare state law  
          for the electronic commerce era.  Through this legislation,  
          California aligned itself with a process developed by the  
          Conference of Commissioners on Uniform State Laws to govern  
          electronic transactions, which generally applies to all records or  
          signatures that are generated or transmitted electronically, the  
          formation of contracts using electronic records, the creation and  
          retention of electronic records and signatures, and the procedures  
          governing changes and errors in electronically-transmitted  
          records.  While the UETA does not require records or signatures to  
          be recorded or maintained electronically, it does provide a  
          process by which transactions can occur electronically.  Writing  
          in explanation of the UETA, the Conference of Commissioners on  
          Uniform State Laws states "UETA applies only to transactions in  
          which each party has agreed by some means to conduct them by  
          electronically.  Agreement is essential.  Nobody is forced to  
          conduct to electronic transactions."


          Fourteen years later, AB 274 (Bonilla) Chapter 733, Statutes of  
          2013, was adopted.  Although AB 274 was not directly associated  
          with the further implementation of the UETA, it was initially  
          introduced to, among other changes, specifically allow APPs to  
          maintain records electronically in accordance with state and  
          federal auditing standards.  It was later amended to limit the  
          electronic maintenance of records to only those that were  
          generated electronically.  In December 2013, the California  








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          Department of Education issued management bulletin 13-10  
          implementing the requirements of AB 274, which included additional  
          guidance on what types of documents could be generated and  
          transmitted electronically.  In this guidance, the department  
          explicitly states that "documents or records created in paper form  
          cannot be scanned and stored electronically.  These records must  
          be stored in their original paper format." 


          Need for this bill:  According to the author, "California leads  
          the nation when it comes to innovation and technology.  However,  
          many of our state government operations have been left in the  
          past.  As a result, a number of state agencies are forced to  
          operate in a manner that is both outdated and inefficient.  [This  
          bill] would update an outmoded procedure by giving child care  
          agencies the option of saving and storing all of their paperwork  
          electronically.  Providing child care programs with this option  
          would both modernize agency operations and maximize the use of  
          public dollars."


          Analysis Prepared by:                                               
                          Myesha Jackson / HUM. S. / (916) 319-2089  FN:  
          0000658