BILL ANALYSIS Ó AB 271 Page 1 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: AB 271 Page 2 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 AB 271 Page 3 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 AB 271 Page 4 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) AB 271 Page 5 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 AB 271 Page 6 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