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AB-865 Childcare services: alternative payment programs: direct deposits: reserve funds.(2021-2022)



Current Version: 09/13/21 - Enrolled Compare Versions information image


AB865:v95#DOCUMENT

Enrolled  September 13, 2021
Passed  IN  Senate  September 08, 2021
Passed  IN  Assembly  September 09, 2021
Amended  IN  Senate  August 26, 2021
Amended  IN  Senate  July 08, 2021
Amended  IN  Senate  June 29, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 865


Introduced by Assembly Member Quirk-Silva
(Coauthors: Assembly Members Aguiar-Curry, Bauer-Kahan, Burke, Calderon, Carrillo, Cristina Garcia, Lorena Gonzalez, Nguyen, Luz Rivas, Blanca Rubio, and Waldron)
(Coauthors: Senators Caballero, Eggman, Leyva, Limón, and Skinner)

February 17, 2021


An act to amend Sections 8234 and 8235 of the Education Code, and to amend Sections 10227.5, 10228, 10232.5, 10269, 10269.5, and 10441 of the Welfare and Institutions Code, relating to childcare.


LEGISLATIVE COUNSEL'S DIGEST


AB 865, Quirk-Silva. Childcare services: alternative payment programs: direct deposits: reserve funds.
(1) The Child Care and Development Services Act, administered by the State Department of Social Services, establishes a system of childcare and development services for children up to 13 years of age. Existing law requires the department to contract with local contracting agencies for alternative payment programs for childcare services to be provided throughout the state. Existing law requires the alternative payment program to reimburse childcare providers based upon specified criteria, including the actual days and hours of attendance for those families with variable schedules.
This bill would instead require the alternative payment program to reimburse childcare providers based upon the maximum certified hours of need, as documented.
(2) The act requires an alternative payment program to verify childcare provider rates no less frequently than once a year. The act requires the department to develop regulations for addressing discrepancies in the childcare provider rate levels identified through the rate verification process described above.
This bill would delete these provisions.
(3) The act authorizes a contractor to retain a reserve fund balance for alternative payment model and certificate childcare contracts, as provided. The act prohibits these funds from exceeding either 2% of the sum of the parts of each contract, as provided, or $1,000, whichever is greater.
This bill would instead prohibit the funds from exceeding either 15% of the sum of the parts of each contract, as provided, or $1,000, whichever is greater.
(4) Existing law, the Early Education Act, requires the Superintendent of Public Instruction, to, among other things, provide an inclusive and cost-effective preschool program. The Early Education Act and the Child Care and Development Services Act authorize alternative payment programs and providers operating or providing services under the acts to use digital signatures that comply with state and federal standards and authorize the use of digital forms to allow families to apply for services.
This bill would instead authorize the use of electronic signatures and forms.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 8234 of the Education Code is amended to read:

8234.
 Contractors operating or providing services pursuant to this chapter may do both of the following:
(a) (1)  Electronically maintain records, in compliance with state and federal standards, as determined by the department. A conversion from a paper record to an electronic format, and the storage of the electronic record, shall comply with the minimum standards described in Section 12168.7 of the Government Code and the standards for trustworthy electronic document or record preservation, as described in Chapter 15 (commencing with Section 22620.1) of Division 7 of Title 2 of the California Code of Regulations.
(2) Pursuant to Section 33421, the records shall be retained by each contractor for at least five years, or, if an audit has been requested by a state agency, until the date the audit is resolved, whichever is longer.
(3) This subdivision does not require a contractor to create records electronically.
(b) (1) Use an electronic signature that complies with state and federal standards, as determined by the department, that may be a marking that is either computer generated or produced by electronic means and is intended by the signatory to have the same effect as a handwritten signature.
(2) The use of an electronic signature shall have the same force and effect as the use of a manual signature if the requirements for the electronic signatures and their acceptable technology, as provided in Section 16.5 of the Government Code and in Chapter 10 (commencing with Section 22000) of Division 7 of Title 2 of the California Code of Regulations, are satisfied.

SEC. 2.

 Section 8235 of the Education Code is amended to read:

8235.
 Contractors operating or providing services pursuant to this chapter may use electronic forms to allow families to apply for services, if those forms comply with state and federal standards.

SEC. 3.

 Section 10227.5 of the Welfare and Institutions Code is amended to read:

10227.5.
 (a) Childcare providers authorized to provide services pursuant to this chapter shall submit to the alternative payment program a monthly attendance record or invoice for each child who received services that, at a minimum, documents the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. The information shall be documented on a daily basis.
(b) At a minimum, the monthly attendance record or invoice shall be signed by the parent or guardian of the child receiving services and the childcare provider once per month to attest that the child’s attendance is accurately reflected. The verification of attendance shall be made by signature at the end of each month of care and under penalty of perjury by both the parent or guardian of the child receiving services and the childcare provider.
(c) The monthly attendance record or invoice shall be maintained by the childcare provider in the unaltered original format in which it was created, which may be in paper form or electronic format.
(d) The alternative payment program shall accept the monthly attendance record or invoice as documentation of the hours of care provided if the attendance record or invoice includes adequate information documented on a daily basis, including, at a minimum, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. The alternative payment program shall reimburse childcare providers based upon the maximum certified hours of need, as documented on the certificate or voucher.
(e) For purposes of reimbursement to providers through an alternative payment program, contractors shall not be required to track absences.
(f) For purposes of this section, a monthly attendance record or invoice is defined as documentation that includes, at a minimum, the name of the child receiving services, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day, that is signed under penalty of perjury by both the parent or guardian and the childcare provider, attesting that the information provided is accurate.

SEC. 4.

 Section 10228 of the Welfare and Institutions Code is amended to read:

10228.
 (a) Payments made by alternative payment programs shall not exceed the applicable market rate ceiling. Alternative payment programs may expend more than the standard reimbursement rate for a particular child. However, the aggregate payments for services purchased by the agency during the contract year shall not exceed the assigned reimbursable amount as established by the contract for the year. An agency shall not make payments in excess of the rate charged to full-cost families. This section does not preclude alternative payment programs from using the average daily enrollment adjustment factor for children with exceptional needs as provided in Section 10281.5.
(b) Alternative payment programs shall reimburse licensed childcare providers in accordance with a biennial market rate survey pursuant to Section 10436, at a rate not to exceed the ceilings established pursuant to Section 10374.5.
(c) An alternative payment program shall reimburse a licensed provider for childcare of a subsidized child based on the rate charged by the provider to nonsubsidized families, if any, for the same services, or the rates established by the provider for prospective nonsubsidized families. A licensed childcare provider shall submit to the alternative payment program a copy of the provider’s most current rate sheet listing the rates charged, and the provider’s discount or scholarship policies, if any, along with a statement signed by the provider confirming that the rates charged for a subsidized child are equal to or less than the rates charged for a nonsubsidized child.
(d) An alternative payment program shall maintain a copy of the rate sheet and the confirmation statement.
(e) A licensed childcare provider shall submit to the local resource and referral agency a copy of the provider’s most current rate sheet listing rates charged, and the provider’s discount or scholarship policies, if any, and shall self-certify that the information is correct.
(f) Each licensed childcare provider may alter rate levels for subsidized children, as needed, and shall provide the alternative payment program and resource and referral agency with the updated information pursuant to subdivisions (c) and (e), to reflect any changes. Updated rates shall be effective within 60 days of submission of the updated information pursuant to subdivisions (c) and (e).
(g) A licensed childcare provider shall post in a prominent location adjacent to the provider’s license at the childcare facility the provider’s rates and discounts or scholarship policies, if any.

SEC. 5.

 Section 10232.5 of the Welfare and Institutions Code is amended to read:

10232.5.
 Alternative payment programs and providers operating or providing services pursuant to this chapter may use an electronic signature that complies with state and federal standards, as determined by the department, that may be a marking that is either computer generated or produced by electronic means and is intended by the signatory to have the same effect as a handwritten signature. The use of an electronic signature shall have the same force and effect as the use of a manual signature if the requirements for electronic signatures and their acceptable technology, as provided in Section 16.5 of the Government Code and in Chapter 10 (commencing with Section 22000) of Division 7 of Title 2 of the California Code of Regulations, are satisfied.

SEC. 6.

 Section 10269 of the Welfare and Institutions Code is amended to read:

10269.
 Contractors operating or providing services pursuant to this chapter may do both of the following:
(a) (1) Electronically maintain records, in compliance with state and federal standards, as determined by the department. A conversion from a paper record to an electronic format, and the storage of the electronic record, shall comply with the minimum standards described in Section 12168.7 of the Government Code and the standards for trustworthy electronic document or record preservation, as described in Chapter 15 (commencing with Section 22620.1) of Division 7 of Title 2 of the California Code of Regulations.
(2) The records shall be retained by each contractor for at least five years, or, if an audit has been requested by a state agency, until the date the audit is resolved, whichever is longer.
(3) This subdivision does not require a contractor to create records electronically.
(b) (1) Use an electronic signature that complies with state and federal standards, as determined by the department, that may be a marking that is either computer generated or produced by electronic means and is intended by the signatory to have the same effect as a handwritten signature.
(2) The use of an electronic signature shall have the same force and effect as the use of a manual signature if the requirements for the electronic signatures and their acceptable technology, as provided in Section 16.5 of the Government Code and in Chapter 10 (commencing with Section 22000) of Division 7 of Title 2 of the California Code of Regulations, are satisfied.

SEC. 7.

 Section 10269.5 of the Welfare and Institutions Code is amended to read:

10269.5.
 Contractors operating or providing services pursuant to this chapter may use electronic forms to allow families to apply for services, if those forms comply with state and federal standards.

SEC. 8.

 Section 10441 of the Welfare and Institutions Code is amended to read:

10441.
 (a) Child development contractors are encouraged to develop and maintain a reserve within the child development fund, derived from earned but unexpended funds. Child development contractors may retain all earned funds. For purposes of this section, “earned funds” means those funds for which the required number of eligible service units have been provided.
(b) (1) Earned funds shall not be expended for activities proscribed by Section 10398. Earned but unexpended funds shall remain in the contractor’s reserve account within the child development fund and shall be expended only by direct service child development programs that are funded under contract with the department.
(2) A contractor may retain a reserve fund balance, separate from the reserve fund retained pursuant to subdivision (c) or (d), equal to 15 percent of the sum of the maximum reimbursable amounts of all contracts to which the contractor is a party, or two thousand dollars ($2,000), whichever is greater. This subparagraph applies to direct service child development contracting agencies that are funded under contract with the department.
(c) Notwithstanding subdivisions (a) and (b), a contractor may retain a reserve fund balance for a resource and referral program, separate from the balance retained pursuant to subdivision (b) or (d), not to exceed 3 percent of the contract amount. Funds from this reserve account may be expended only by resource and referral programs that are funded under contract with the department.
(d) Notwithstanding subdivisions (a) and (b), a contractor may retain a reserve fund balance for alternative payment model and certificate childcare contracts, separate from the reserve fund retained pursuant to subdivisions (b) and (c). Funds from this reserve account may be expended only by alternative payment model and certificate childcare programs that are funded under contract with the department. The reserve amount allowed by this subdivision shall not exceed either of the following, whichever is greater:
(1) Fifteen percent of the sum of the parts of each contract to which that contractor is a party that is allowed for administration pursuant to Section 10302 and that is allowed for supportive services pursuant to the contract.
(2) One thousand dollars ($1,000).
(e) Each contractor’s audit shall identify any funds earned by the contractor for each contract through the provision of contracted services in excess of funds expended.
(f) Any interest earned on reserve funds shall be included in the fund balance of the reserve. This reserve fund shall be maintained in an interest-bearing account.
(g) Moneys in a contractor’s reserve fund may be used only for expenses that are reasonable and necessary costs as defined in subdivision (n) of Section 10213.5.
(h) Any reserve fund balance in excess of the amount authorized pursuant to subdivisions (b), (c), and (d) shall be returned to the department pursuant to procedures established by the department.
(i) Upon termination of all child development contracts between a contractor and the department, all moneys in a contractor’s reserve fund shall be returned to the department pursuant to procedures established by the department.
(j) Expenditures from, additions to, and balances in, the reserve fund shall be included in the contracting agency’s annual financial statements and audit.

SEC. 9.

 It is the intent of the Legislature, in amending Section 10227.5 of the Welfare and Institutions Code, to increase access to subsidized childcare services for families who are eligible to receive subsidized childcare services by reimbursing childcare providers based upon the maximum certified hours of need documented on the childcare certificate or voucher. It is further the intent of the Legislature that the amendments to that section not be constrained by any collective bargaining agreements and continue in effect beyond the provisions of paragraph (5) of subdivision (b) of Section 263 of Chapter 116 of the Statutes of 2021.