BILL ANALYSIS
AB 304
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Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
AB 304 (Price) - As Amended: April 16, 2009
SUBJECT : Child care programs: Alternative Payment Providers
SUMMARY : Requires Alternative Payment Programs (APPs) to
provide child day care providers the option of receiving state
subsidy reimbursements via electronic banking. Specifically,
this bill:
1)Requires an APP to establish, by January 1, 2011, a program of
electronic banking for payments made to licensed or
license-exempt family day care homes (Providers) that have a
contract with that APP.
2)Allows the Provider to receive payments via electronic banking
at the financial institution of his or her choice.
3)Specifies that if an APP already has an electronic banking
payment program that is in place prior to the effective date
of this bill, the APP can continue to accept direct deposit or
another form of electronic payment after the effective date.
4)Deletes an obsolete provision relating to payments and market
rates.
5)Makes findings and recommendations.
EXISTING LAW :
1)Provides, through the Child Care and Development Services Act,
administered by the state Department of Education (CDE), a
comprehensive, coordinated, and cost-effective system of child
care and development services for children to age 13 and their
parents, including a full range of supervision, health, and
support services through full- and part-time programs.
2)Requires CDE to contract with local contracting agencies to
provide for APPs, and authorizes alternative payments to be
made for services provided in licensed centers and family day
care homes, for care provided in the child's home, and for
other types of care that conform to applicable law.
AB 304
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FISCAL EFFECT : Unknown
COMMENTS : The author states that child care subsidy payments
are often times too slow, affecting the providers' ability to
plan ahead and pay their bills and obligations on time. He adds
that this bill would give child care providers the option to be
reimbursed by APP agencies via direct deposit. This would have
the effect of ensuring that subsidy payments are made on time,
while reducing fraud and helping to facilitate an oversight
process that makes it easier for the state to track subsidy
payments made to child care providers. The sponsors argue that
direct deposit saves time, allows providers to better plan their
monthly activities, and brings about a higher level of
satisfaction.
APPs : APPs have been in operation in California since 1977.
These programs offer subsidized child care to help the working
poor pay for child care, including in-home care, family child
care, license-exempt and center care. This service often takes
the form of a vendor payment (a certificate or voucher) issued
monthly to a provider selected by the family. The APP program
is intended to protect and increase parental choice and
accommodate the individual needs of the family. California's 89
APPs also provide many other child care-related services to the
state and to families.
Current Payment Process : The process for distributing the state
monies that subsidize child care include the State Controller's
Office, the APP, and the Provider. Generally, the payment
process starts when a Provider submits its child attendance
forms to the APP for reimbursement. The APP then generates and
submits its expenditure report for all of its providers to SCO,
and SCO sends a paper check to the APP so it can in turn
reimburse Providers. Currently, it is common practice for APPs
to mail paper checks to the provider to reimburse them.
Child Action, Inc., Sacramento's APP agency, is the exception to
the rule as it already provides electronic banking for its
Providers. It states that the move from paper checks to
electronic deposit has improved the payment process for both
itself and its direct clients. For Child Action, the change:
a) reduced fraud because paper checks were relatively easy to
modify; b) eliminated lost checks and the need to reissue them;
and c) simplified the payment process for the end user. For
AB 304
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clients, direct deposit makes their business more efficient and
saves many of them the high fees required to cash a paper check
at check cashing outlets.
This bill would require all APPs to set up an electronic banking
process for Providers and allows Providers to opt into
electronic banking if they so wish.
Related legislation : AB 315 (De Le?n) would require the State
Department of Education to adopt regulations to establish
guidelines for APPs, including timelines of payment to child
care providers. AB 315 is currently set to be heard in the
Assembly Education Committee on April 29, 2009.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of State, County, and Municipal Employees (Sponsor)
Child Care Providers United of California (Sponsor)
State Employees International Union (Sponsor)
Opposition
None of file.
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089