BILL ANALYSIS �
AB 2101
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Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
AB 2101 ( Levine) - As Introduced: February 20, 2014
SUBJECT : Child care: alternative payment programs and
contractors: electronic records
SUMMARY : Expands existing law to allow Alternative Payment
Programs (APP) and child care providers to maintain records
electronically or in another alternative format. Specifically,
this bill :
1)Permits APPs and child care providers to maintain case records
electronically or through other alternative storage
technologies.
2)Specifies that permissible alternative storage technologies
include, but are not limited to, photography,
microphotography, electronically recorded video images on
magnetic surfaces, electronic data processing systems, optical
disk storage, or any other electronic medium that is a trusted
system and that does not permit additions, deletions, or
changes to the original document and meets all necessary state
and federal laws for recording of permanent or nonpermanent
records.
3)Requires that a duplicate copy of any record reproduced shall
be deemed to be an original.
4)Permits APPs and child care providers to use electronic
signatures that may be a marking that is computer generated,
produced by electronic means, or an email signature that is
intended by the signatory to have the same effect as a
handwritten signature.
5)Expands the types of documents that may be maintained
electronically to include attendance sheets, family
eligibility and need files, notices of actions, family fee
records, and provider invoices.
EXISTING LAW
1)Establishes the California Child Care and Development Services
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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. (EDC 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 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 training, seeking employment, incapacitated, or in
need of respite. (EDC 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 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 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 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 that all records be retained by each agency
for at least five years, as specified. (EDC 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 8227.3)
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9)Establishes the Uniform Electronic Transactions Act (UETA),
which permits, but does not require, a record or signature to
be created, generated, sent, communicated, received, stored,
or otherwise processed or used by electronic means or in
electronic form. (CVC 1633.2 and 1633.5)
FISCAL EFFECT : Unknown
COMMENTS :
Alternative Payment Programs : There are currently 81 APPs
contracted with the CDE, funded through state and federal funds,
to provide an array of support and payment services that enable
low-income and 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.
Child care vouchers can then 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.
However, 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 who receives a voucher from an APP will then
be referred to a local child care resource and referral (R&R)
network. The R&R network, also funded through state and federal
dollars, will assist a family by helping 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 the CCDSA, 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 : In 2009 the state adopted SB 820
(Sher/Pavley), Chapter 428, Statutes of 1999, which adopted the
Uniform Electronic Transactions Act (UETA). Promulgated by the
Conference of Commissioners on Uniform State Laws, the UETA is
described as the first comprehensive effort to prepare state law
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for the electronic commerce era. Through aligning legislation,
the state adopted a process to govern electronic transactions.
More specifically, it provided rules and regulations that
generally apply to all records or signatures that are generated
or transmitted electronically, the formation of contracts using
electronic records, the making and retention of electronic
records and signatures, and the procedures governing changes and
errors in electronically transmitted records. However, it
should be noted that the UETA does not require records or
signatures to be recorded or maintained electronically, rather
it simply provides a process by which transactions can occur
electronically. Writing in explanation of the UETA, the
Conference of Commissioners on Uniform State Laws states that
"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."<1>
Last year the state adopted AB 274 (Bonilla) Chapter 733,
Statutes of 2013. Although not directly associated with the
further implementation of the UETA, AB 274 was initially
introduced to, among other changes, specifically allow APPs to
maintain records electronically in accordance with state and
federal auditing standards. However, it was later amended to
limit the electronic maintenance of records to only those that
were generated electronically. In December 2013 the California
Department of Education issued management bulletin 13-10
implementing the requirements of AB 274, which included
additional guidance on what types of documents may be generated
and transmitted electronically. In this guidance it 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 the bill : Stating the need for the bill, the author
writes:
I have introduced [this bill] in support of community based
public and private nonprofit Alternative Payment Program
(APP) agencies that have existed in each of our districts
since 1976 to connect eligible working poor families to
-------------------------
<1> The National Conference of Commissioners on Uniform State
Laws; Electronic Transactions Summary.
http://www.uniformlaws.org/ActSummary.aspx?title=Electronic+Trans
actions+Act
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child care for children from birth on. These programs are
the link to connecting our poorest of poor families with
child care and other services with the goal of making
families self-sufficient.
Quite simply, the language in [this bill] will allow these
agencies the option to save their paperwork electronically.
Currently, hundreds of thousands of dollars are spent on
warehousing paper copies of family case files dating back
five to seven years. Technological advances if realized
could bring greater efficiency and maximizing of public
dollars. The bill will not create a mandate but will allow
our local APPs the option of working towards a paperless
environment.
Staff comments : This measure seeks to further AB 274 by
permitting all records to be maintained electronically.
However, it is unclear whether the bill will achieve the desired
outcome of allowing records to meet state auditing requirements.
In order for an electronic record to be used and accepted, CDE,
which is the contracting agency, would have to agree to the use
of electronic documents. Although the bill allows for APPs and
child care providers to use electronic records, it does not
mandate the CDE to accept or use them for purposes of
programmatic or fiscal compliance.
Additionally, it is unclear whether APPs and child care
providers have the resources to comply with industry standards
of what is considered an authentic or otherwise accurate and
reliable electronic document. The process of certifying that an
agency's system of developing and maintaining electronic records
has the necessary checks and balances is costly. Generally, it
requires a third party auditor or software firm to assess the
system and provide the adequate level of protections and quality
assurances necessary to meet state and federal auditing
standards. This would be in addition to existing requirements
that an agency is fiscally audited on an annual basis.
Concerns have also been expressed by CDE that, although
supportive of efforts to transition to the collection and use of
electronic records, it lacks the capacity and resources to
adequately receive and verify electronically generated and
maintained records. Similar to the requirements for local
agencies, CDE would also likely have to put in place a system
that allows for the receipt and use of electronic records for
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quality assurance and auditing purposes, and a process to verify
the authenticity of those records.
Lastly, this measure is amending Section 8262.1 of the Education
Code, but not Section 8227.3, which authorizes and specifies
what types of records an APP may maintain electronically. If
the purpose of this measure is to allow APPs, in addition to
child care providers, to maintain records electronically,
Section 8227.3 should also be amended.
RECOMMENDED AMENDMENTS
Committee staff recommends the following amendments to:
1)Align language in Section 8227.3 of the Education Code
relating to records APPs may maintain electronically.
2)Delete language that exempts the maintenance of electronic
records from having to comply with other laws, including the
UETA.
3)Clarify the requirement that the generation, maintenance and
reporting of electronic records and documents complies with
state and federal requirements as determined by CDE.
4)Delete unnecessary and potentially duplicative language that
could create ambiguity as to what is or is not considered to
be in compliance with state and federal law.
Specifically, staff recommends the following amendments:
Amendment #1 - Amend Section 8227.3 of the Education Code to
read:
8227.3. (a) Alternative payment programs and providers
operating or providing services pursuant to this article may
maintain records in electronic format only if the original
documents were created in electronic format electronically in
compliance with state and federal auditing standards as
determined by the department. Records that may be created in
electronic format and maintained electronically include, but are
not limited to, the following:
(1) Child immunization records.
(2) Parental job verification records.
(3) Parent income verification.
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(4) Parent school or training verifications and attendance
records.
(5) Attendance sheets.
(6) Family eligibility and need files.
(7) Notices of actions.
(8) Family fee records.
(9) Provider invoices.
(b) Pursuant to Section 33421, the original records shall be
retained by each contractor for at least five years, or, where
an audit has been requested by a state agency, until the date
the audit is resolved, whichever is longer.
(c) Nothing in this section requires an alternative payment
program or provider to create records electronically.
Amendment #2 - On page two, lines three and four, delete
"Notwithstanding any other law, including Section 8227.3,
alternative" and insert:
Alternative
Amendment #3 - On page two, delete lines six through 14, and
insert:
that complies with state and federal auditing standards as
determined by the department.
Amendment #4 - On page two, line 21 after signature insert:
in compliance with state and federal auditing standards as
determined by the department and delete the remainder of line 21
and line 22
Amendment #5 - On page two, line 28 after "electronically"
insert:
in compliance with state and federal auditing standards as
determined by the department
REGISTERED SUPPORT / OPPOSITION :
Support
California Alternative Payment Program Association (CAPPA)
SPONSOR
Chicano Federation of San Diego County
Child Care Links
Child Development Associates, Inc.
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Child Development Resources of Ventura County, Inc.
Children's Council of San Francisco
Choices for Children
Community Child Care Council (4Cs) of Sonoma County
Community Action Partnership of San Luis Obispo
Community Resources for Children
Connections for Quality Care
Controltec, Inc.
County Welfare Directors Association of CA (CWDA)
Davis Street Family Resource Center
Drew Child Development Corporation
Family Resource and Referral Center
Kids Kare Schools
Knowledge Universe
MCT Technology
Mexican American Opportunity Foundation
NoHo Software
North Coast Opportunities, Inc.
San Diego County Office of Education
Santa Cruz County Parents Association
Sierra Nevada Children's Services
Solano Family & Children's Services
Supportive Services, Inc.
Valley Oak Children's Services
YMCA Childcare Resource Service
Opposition
None on file.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089