BILL ANALYSIS �
AB 641
Page A
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 641 (Rendon) - As Amended: March 19, 2013
Policy Committee: Labor and
Employment Vote: 5-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes the Quality Family Child Care Act, which
authorizes family child care providers to form, join, and
participate in "provider organizations" for the purpose of
negotiating with state agencies on reimbursements and other
matters.
FISCAL EFFECT
1)GF costs, likely in the tens of millions to hundreds of
millions, to the CalWORKS program to implement the
requirements of this bill. The CalWORKS program requires the
state to provide subsidized child care to parents who
eligibility requirements. This bill will likely result in
increased salary and benefits and better working conditions
for providers, which will lead to higher child care costs.
2)Annual GF administrative costs, likely in excess of $200,000,
to establish and maintain the Family Child Care Parent
Advisory Committee, as specified.
3)GF administrative costs, likely in the hundreds of thousands
of dollars, to the Public Employee Relations Board (PERB).
These costs are associated with implementing procedures to
determine a bargaining representative and are likely to
decline after the bargaining unit is formed and representation
is determined.
4)GF cost pressure, likely in the tens of millions, to meet the
requirements of this bill. While there are fixed
appropriations in the annual budget act for non-CalWORKS child
care, this bill may lead to increased programs costs due to
increased salary and benefit costs, which may reduce the
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number of children able to be served in these programs.
This bill applies to family child care homes (FCCHs) and
licensed-exempt providers, which provide about one-third of
the subsidized child care in California. (The other two-thirds
are provided by child care centers, which are not subject to
the provisions of this bill.) The following table
illustrates the amount of funding provided in 2012 Budget Act
for Child Care Development (CCD) programs, excluding state
preschool.<1>
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SUMMARY CONTINUED
Specifically, this bill:
1)Creates a right for family child care homes (FCCHs) and child
care providers in licensing-exempt homes (a relative,
neighbor, or friend not required to have a license to provide
childcare) to form provider organizations. Child care
providers would retain the right to join or not join such an
organization
2)Establishes the Family Child Care Parent Advisory Committee
(CCPAC), which consists of 11 members (nine of whom are
parents/guardians of children participating or participated in
a child subsidy program). Requires the CCPAC to advise the
Governor and any certified provider organization regarding
issues related to the quality, affordability, and
accessibility of child care offered through subsidy programs,
as specified.
3)Extend the state action antitrust exemption to the activities
of the family child care providers and their representatives.
This bill, however, does not change the status of family child
care providers as independent business owners, nor does this
bill classify family child care providers as public employees.
4)Requires, within 10 days of receipt of a request from a
provider organization, the State Department of Social Services
(DSS) to make FCCHs, including each provider's contact
information, available to that provider organization, as
specified.
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<1>Numbers based on Department of Finance estimates with regard
to the source of funds (i.e., federal or state GF).
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5)Establishes a petition and election process for the selection
of provider organizations, to be administered by PERB. This
measure further implies there will be only one bargaining unit
of family child care providers in the state at any given time.
6)Requires any state agency that administers a program of
publicly funded subsidies for child care services, upon the
request of a provider organization, to negotiate with regard
to a reimbursement system and the terms of the provision of
child care services under a publicly funding subsidy program.
7)Establishes the child care organization would represent all
child care providers in negotiations with the governor and
state agencies on issues that fall within the child care
provider organization's scope of representation, as specified.
8)Requires the governor, through the Department of Human
Resources (DHR), in consultation with the Superintendent of
Public Instruction, other state agencies that administer
programs of publicly funded child care, and their contractors,
to meet and confer in good faith regarding on all matters
within the scope of representation with representatives of a
certified provider organization.
9)Requires the governor, DHR, and the certified provider
organization to jointly prepare a written memorandum of
understanding (MOU), if an agreement is reached between all of
these parties. Further specifies this MOU is binding on all
state departments and agencies involved in the administration
of child care subsidy programs.
10)Prohibits the child care provider organization from directing
or calling a strike.
11)Authorizes the parties fail to submit unresolved issues to
the California State Mediation and Conciliation Service within
the Department of Industrial Relations for mediation or
binding arbitration, as specified.
COMMENTS
1)Child care program funding . According to the Legislative
Analyst Office (LAO), "The [2012] budget package adopted by
the Legislature reduced GF support for child care programs by
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$80 million (8.7%), eliminating funding for about 10,500 slots
(compared to the prior year). Child care contractors would
achieve these savings through attrition and, to the degree
necessary, by disenrolling currently served children from
higher-income families. The Legislature applied these
across-the-board reductions to CalWORKs Stage 3, Alternative
Payment, General Child Care, and migrant child care programs
(exempting the CalWORKs Stage 1 and Stage 2 programs and the
State Preschool Program)."
The Governor vetoed $50 million of associated spending from
the 2012 Budget Act. Specifically, he vetoed: (a) $20 million
in GF/P98 spending by deepening the Alternative Payment
program cut to about 18% (eliminating an additional 3,400
slots) and (b) $30 million in GF/98 spending by also applying
the 8.7% reduction to the State Preschool Program, which is
not affected by this bill.
According to the LAO, the Governor's proposed 2013-14 Budget
"does not contain notable reductions for child care and
preschool programs. Based primarily on minor changes in
funding for the three stages of CalWORKs child care, overall
funding for child care and preschool programs would increase
by $12 million (one percent) compared to the revised
current-year level. The Governor proposes only very small
changes (less than $1 million) in GF spending for non-CalWORKs
child care programs and in Proposition 98 spending for State
Preschool. Additionally, the Governor's proposal does not
include a cost-of-living adjustment (COLA) for any child care
or preschool program, as the 2012-[Budget Act] suspended COLAs
for these programs through 2014-15."
2)Current Reimbursement System for Providers . Parents receiving
subsidized child care from the state can choose a licensed
center (which are not subject to the provisions of this bill),
a family child care home, or a non-licensed provider (usually
a relative, neighbor or friend). The state reimburses licensed
centers and licensed family child care homes at the same rate
as the provider charges a family who is not subsidized, up to
a ceiling established by the state. The ceiling is set through
a periodic survey of providers in the region, and adjusted in
interim years by the Legislature to reflect change in the cost
of living. The state reimburses non-licensed providers at a
rate set within each county based on the mean cost of licensed
care in the county.
Any agreement between an organized representative of these
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providers and the state negotiated pursuant to this bill would
conflict with any statutory reimbursement rates. The
implementing legislation needed to appropriate the necessary
funds also would need to amend or at least supersede the
statutory rates.
3)Purpose . This bill, co-sponsored by the Service Employees
International Union and the American Federation of State,
County, and Municipal Employees, is intended to improve access
to, and quality of, child care by creating a more stable
workforce. The bill would enable allow family child care
providers to join on issues that affect their professions,
including benefits for providers, enforcement of regulations,
and reimbursement rates. The supporters point out that any
agreements made with respect to reimbursement rates would be
subject to necessary statutory or regulation changes, and also
subject to appropriation by the Legislature and approval by
the governor.
4)Previous legislation .
a) AB 2573 (Furutani), 2012, was similar to this measure.
This measure passed out of Assembly Labor and Employment
Committee with a 5-2 vote. The author, however, did not
set the bill for hearing in this committee.
b) AB 101 (J. Perez), similar to this measure, was vetoed
by Gov. Brown in October 2011, with the following message:
"Maintaining the quality and affordability of childcare is a
very important goal. So too is making sure that working
conditions are decent and fair for those who take care of
our children. Balancing these objectives, however, as this
bill attempts to do, is not easy or free from dispute.
Today California, like the nation itself, is facing huge
budget challenges. Given that reality, I am reluctant to
embark on a program of this magnitude and potential cost."
c) SB 867 (Cedillo), similar to this measure, was vetoed by
Governor Schwarzenegger in March 2008, with the following
message: "Given California's significant budget challenge,
I cannot consider bills that would add significant fiscal
pressures to the State's structural budget deficit."
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d) AB 1164 (De Leon), similar to SB 867 (Cedillo), was
vetoed by Governor Schwarzenegger in October 2007.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081