Bill Text: CA AB812 | 2013-2014 | Regular Session | Chaptered
Bill Title: Child care: contracts: termination and suspension.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-09-06 - Chaptered by Secretary of State - Chapter 249, Statutes of 2013. [AB812 Detail]
Download: California-2013-AB812-Chaptered.html
BILL NUMBER: AB 812 CHAPTERED
BILL TEXT
CHAPTER 249
FILED WITH SECRETARY OF STATE SEPTEMBER 9, 2013
APPROVED BY GOVERNOR SEPTEMBER 6, 2013
PASSED THE SENATE AUGUST 15, 2013
PASSED THE ASSEMBLY AUGUST 19, 2013
AMENDED IN SENATE JUNE 26, 2013
AMENDED IN ASSEMBLY MAY 15, 2013
AMENDED IN ASSEMBLY MAY 7, 2013
AMENDED IN ASSEMBLY APRIL 22, 2013
INTRODUCED BY Assembly Member Mitchell
FEBRUARY 21, 2013
An act to amend Sections 8257, 8402, 8403, 8406.6, 8406.7, 8406.9,
8407, and 8408 of, and to add Section 8401.5 to, the Education Code,
relating to child care.
LEGISLATIVE COUNSEL'S DIGEST
AB 812, Mitchell. Child care: contracts: termination and
suspension.
(1) Existing law requires the State Department of Education to
apply sanctions against contracting agencies that have serious
licensing violations, as defined and reported by the State Department
of Social Services and provide 90 days' written notification to any
contractor whose agreement is being terminated, unless there is
imminent danger to the health and welfare of children if agency
operation is not terminated promptly.
This bill would require a 90-day written notification as
specified, except in the case of certain immediate terminations.
(2) Existing law requires the department to provide an independent
appeal procedure in certain instances, including, but not limited
to, contract termination or suspension, to each contracting agency
providing specified child care and development services.
This bill would delete the requirement that the department provide
the independent appeal procedure for contract suspension. The bill
would additionally require the department to provide an internal
appeal procedure to resolve a dispute between the department and a
contracting agency providing specified child care and development
services regarding the interpretation or application of a contract
term or condition, or to dispute the findings of a fiscal or
programmatic review.
(3) Existing law requires the Superintendent of Public Instruction
to establish a contract classification system with 3 classes of
contract designations; a clear contract, a provisional contract, and
a conditional contract, as specified. Existing law requires the Child
Development Division of the department to provide technical
assistance to agencies with conditional contracts.
This bill would revise the 3 classes of contract designations, as
specified. The bill would require that technical assistance also be
provided to any contracting agency making a written request to its
assigned consultant or administrator within 60 days of receipt of the
request.
(4) Existing law authorizes any contracting agency that evidences
chronic fiscal or program violations of a felony nature, as
specified, to have its contract immediately suspended or terminated
provided there is documented evidence of the violations and upon
review and recommendation of the general counsel of the department.
This bill would instead authorize a contracting agency that
evidences any specified acts or omissions to have its contract or
contracts immediately terminated provided there is documented
evidence of the acts or omission and upon review and recommendation
of the general counsel of the department. The bill would add
additional acts or omissions, as described, that may result in
immediate termination of a contracting agency's contract or contracts
and require the notice of immediate termination of a contract to be
served in a specified manner.
(5) Existing law authorizes a contracting agency that places a
person in a position of fiscal responsibility or control who has been
convicted of certain crimes to have its contract immediately
suspended or terminated if there is documented evidence of the
conviction and upon review and recommendation of the general counsel
of the department. Existing law authorizes a contracting agency whose
contract is terminated for the reasons described above to appeal the
contract termination, and require the contract termination to occur
after notice, as specified, is provided at least 90 days before
termination.
This bill would instead authorize a contracting agency that has in
place or places a person in a position of fiscal responsibility or
control who has been convicted of a crime involving misuse or
misappropriation of state or federal funds, or a state or federal
crime involving moral turpitude, to have its contract immediately
terminated if there is documented evidence of the conviction and upon
review and recommendation of the general counsel of the department.
The bill would repeal the authority of a contracting agency whose
contract is terminated for the reasons described above to appeal the
contract termination, and the requirement that this termination occur
after notice, as specified, is provided at least 90 days before
termination.
(6) Existing law authorizes local contracting agencies to continue
to operate under their contract during an appeal of termination,
unless the specified action is based on imminent danger to the health
and welfare of children. Existing law requires, if the contract is
being terminated based on imminent danger to the health and welfare
of children, the reason for the termination to be specified by the
department in its notice of termination.
This bill would instead authorize local contracting agencies to
continue to operate under their contract during an appeal of
termination, unless the action is an immediate termination action, as
specified, in which case a local contracting agency would not be
authorized to continue to operate under the contract after the
effective date given in the notice of immediate termination.
(7) This bill would make conforming and nonsubstantive changes to
these provisions.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 8257 of the Education Code is amended to read:
8257. The department shall do all of the following in
administering the provisions of this chapter:
(a) Apply sanctions against contracting agencies that have serious
licensing violations, as defined and reported by the State
Department of Social Services pursuant to Section 1597.11 of the
Health and Safety Code.
(b) Except in the case of immediate terminations taken pursuant to
Sections 8406.7 or 8406.9, provide 90 days' written notification to
any contractor whose agreement is being terminated. Notwithstanding
Article 18 (commencing with Section 8400), the department shall
establish procedures for placing a contractor whose agreement is
being terminated into receivership. Action to initiate receivership
shall be at the discretion of the department, and may be taken
against a contractor whose agreement is being terminated either
immediately or within 90 days. The receiver shall not be a department
employee. The receiver shall have sufficient experience in the
administration of child care and development programs to ensure
compliance with the terms of the receivership.
SEC. 2. Section 8401.5 is added to the Education Code, to read:
8401.5. (a) The department shall provide an internal appeal
procedure to resolve a dispute between the department and a
contracting agency providing child care and development services
pursuant to Section 8262 regarding the interpretation or application
of a term or condition of a contract, or to dispute a finding made by
the department resulting from a fiscal or programmatic review,
including, but not limited to, an error rate notification.
(b) A contracting agency shall have the right to appeal the
findings of a fiscal or programmatic review, including, but not
limited to, an error rate finding, by submitting a request for appeal
in accordance with the internal appeal procedure developed by the
department pursuant to subdivision (a).
SEC. 3. Section 8402 of the Education Code is amended to read:
8402. (a) The department shall provide an independent appeal
procedure to each contracting agency providing child care and
development services pursuant to Section 8262 that shall be conducted
by the Office of Administrative Hearings and shall be provided upon
an appeal petition of the contracting agency in any of the following
circumstances:
(1) Termination of a contracting agency's contract.
(2) Denial of more than 4 percent or twenty-five thousand dollars
($25,000), whichever is less, of a local contracting agency's
contracted payment for services schedule.
(3) Demand for remittance of an overpayment of more than 4 percent
or twenty-five thousand dollars ($25,000), whichever is less, of a
local contracting agency's annual contract.
(b) Before filing an appeal petition for an action taken pursuant
to paragraph (2) or (3) of subdivision (a), the contracting agency
shall have submitted all previously required standard monthly or
quarterly reporting forms to the department.
SEC. 4. Section 8403 of the Education Code is amended to read:
8403. All hearings required by Section 8402 shall be conducted
according to the provisions of the Administrative Procedure Act
(Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code), except as otherwise directed in
this article.
SEC. 5. Section 8406.6 of the Education Code is amended to read:
8406.6. (a) The Superintendent shall establish a contract
classification system for purposes of identifying, monitoring, and
providing technical assistance to contractors as follows:
(1) Clear contract. This designation shall be given to a contract
that is neither a provisional contract, as described in paragraph
(2), nor a conditional contract, as described in paragraph (3).
(2) Provisional contract. This designation applies to an agency's
first contract for any particular service or to the contract of an
existing contracting agency for a new, modified, or different type of
service. The timeframe of a provisional contract is at the
discretion of the department and is given to ensure that the
contracting agency can demonstrate fiscal and programmatic compliance
before the contract is designated as a clear contract. The contract
status shall be reviewed annually.
(3) Conditional contract. This designation applies to a high-risk
contract awarded to a contracting agency that evidences fiscal or
programmatic noncompliance, or both fiscal and programmatic
noncompliance. A contracting agency with one or more contracts
designated as conditional is deemed to be on conditional status with
the department for all child care and development program purposes
and is subject to any restrictions deemed reasonable to secure
compliance. The conditional contract shall include a bill of
particulars detailing the items of noncompliance, the standards that
must be met to avoid termination of contract and to qualify the
agency for clear contract status, and technical assistance plan.
Failure to demonstrate substantive progress toward fiscal or program
compliance within six months of that designation shall constitute a
breach of contract and may subject the contract to termination for
any applicable cause specified in Section 8406.7 or 8407, in
accordance with Section 8402.
(b) Agencies with conditional contracts shall receive technical
assistance from the Child Development Division of the department.
(c) Notwithstanding subdivision (b), technical assistance shall be
provided to any contracting agency making a written request to its
assigned consultant or administrator within 60 days of receipt of the
request.
SEC. 6. Section 8406.7 of the Education Code is amended to read:
8406.7. (a) A contracting agency that evidences any of the
following acts or omissions may have its contract or contracts
immediately terminated if there is documented evidence of the acts or
omissions, and upon review and recommendation of the general counsel
of the department:
(1) Fraud, or conspiracy to defraud.
(2) Misuse or misappropriation of state or federal funds,
including a violation of Section 8406.9.
(3) Embezzlement.
(4) Threats of bodily or other harm to a state official.
(5) Bribery or attempted bribery of a state official.
(6) Unsafe or unhealthy physical environment or facility.
(7) Substantiated abuse or molestation of children.
(8) Failure to report suspected child abuse or molestation.
(9) Theft of supplies, equipment, or food.
(10) Cessation of operations without the permission of the
department, or acts or omissions evidencing abandonment of the
contract or contracts.
(11) Failure of a program operating pursuant to Article 3
(commencing with Section 8220) or Article 15.5 (commencing with
Section 8350) to fully reimburse a significant number of approved
child care providers, as determined by the department, within 15
calendar days after the date set in the plan for timely payments to
child care providers adopted by the contracting agency pursuant to
Section 18226 of Title 5 of the California Code of Regulations,
unless the failure is attributable to a delay in receiving
apportionments from the state.
(12) Failure of a program operating pursuant to this chapter to
pay salaries owed to employees, pay federal payroll tax, or fully
reimburse a significant number of child care providers, as determined
by the department, affiliated with a contracting agency pursuant to
Article 8.5 (commencing with Section 8245) for more than 15 days
after the employee salaries, federal payroll taxes, or reimbursement
payments were due, unless the failure is attributable to a delay in
receiving apportionments from the state.
(b) An agency whose contract is immediately terminated pursuant to
this section retains appeal rights in accordance with Section 8402.
(c) Notwithstanding any service provision in the Administrative
Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code), a notice of immediate
termination shall be served on the contracting agency by personal
service or at the last address on file with the department, by
overnight mail or certified mail. Service may be proved in the manner
authorized in a civil action. Service by mail is complete at the
time of deposit.
(d) The department shall advise child care and development
contractors of the provisions of this section within 30 working days
of the effective date of the act amending this section during the
2013-14 Regular Session of the Legislature.
SEC. 7. Section 8406.9 of the Education Code is amended to read:
8406.9. (a) An agency that has in place or places a person in a
position of fiscal responsibility or control who has been convicted
of a crime involving misuse or misappropriation of state or federal
funds, or a state or federal crime involving moral turpitude, may
have its contract immediately terminated pursuant to Section 8406.7
if there is documented evidence of the conviction, and upon review
and recommendation of the general counsel of the department.
(b) For purposes of this section, "position of fiscal
responsibility or control" includes any authority to direct or
control expenditure of, or any access to, state or federal child care
and development funds received pursuant to this chapter whether that
authority or access is conferred based on the person's status as an
employee, director, manager, board member, or volunteer, or based on
any other status.
(c) If the agency provides evidence to the department, before the
effective date given in the notice of immediate termination, that the
convicted person has been removed from the position of fiscal
responsibility or control and provides assurance that the person will
not be returned to a position of fiscal responsibility or control,
the department shall withdraw the termination action.
SEC. 8. Section 8407 of the Education Code is amended to read:
8407. Except for causes listed in Sections 8406.7 and 8406.9,
termination of a child care and development contract shall not occur
without good cause and without notice as described in Section 8406 at
least 90 days before the effective date given in the notice of
termination.
SEC. 9. Section 8408 of the Education Code is amended to read:
8408. Actions as defined in subdivision (a) of Section 8402 shall
remain in effect during the appeal process. However, local
contracting agencies may continue to operate under the contract
during an appeal of termination, unless the action is an immediate
termination action taken pursuant to Section 8406.7 or 8406.9, in
which case a contracting agency shall not continue to operate under
the contract after the effective date given in the notice of
immediate termination.
