BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 641 (Rendon) - Family Child Care Providers: Bargaining
Representative
Amended: July 10, 2013 Policy Vote: Labor and I.R. 3-1
Urgency: No Mandate: No
Hearing Date: August 19, 2013
Consultant: Jacqueline Wong-Hernandez
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 641 authorizes family child care providers to
form, join, participate in, and to seek the certification of, a
provider organization (PO) to act as their exclusive
representative on matters related to child care subsidy
programs. This bill establishes a Family Child Care Parent
(FCCP) Advisory Committee, as specified. This bill requires the
state Department of Social Services (DSS) and the California
Department of Education (CDE), with the assistance of specified
state departments and agencies, and their contractors and
subcontractors, to make specified information regarding family
child care providers available to POs, as specified. This bill
further requires all resource and referral agencies to provide,
without charge, specified workshops to family child care
providers. This bill further establishes a stakeholder work
group, and requires the DSS to consult with the group, as
specified.
Fiscal Impact:
Subsidized child care costs: Potentially substantial
increase in state costs, primarily in the CalWORKs program,
to the extent that the representation authorized by this
bill results in increased salary and benefits for child care
providers. At a minimum, annual costs will likely be tens of
millions of dollars (General Fund) more than existing state
child care costs. See staff comments.
Public Employee Relations Board (PERB): Significant upfront
administrative costs to determine the bargaining unit,
including holding an election; this bill specifically
provides that the election costs will be reimbursed by
participating POs. Potentially significant costs if the PO
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and state are unable to reach agreements in the future.
Data collection and fair share calculation: One-time costs
of $7 million to 9 million (General Fund) to collect
necessary data from the 33,847 providers, calculate fair
share contributions, and build a system to store the
information and calculate future payments. Potentially
significant ongoing costs for CDE staff to administer the
system and manage changes in provider participation. See
staff comments.
State negotiations: Significant new workload for the CDE to
negotiate with the PO on behalf of the Superintendent of
Public Instruction (SPI) negotiations, and potentially to
the DSS and the Department of Finance. Ongoing costs will
likely be in the high hundreds of thousands of dollars
(General Fund) for negotiations, depending on the scope of
the bargaining and the entities involved, and the
development of required MOUs when agreements are reached.
FCCP Advisory Committee: Annual costs likely in excess
$100,000 (General Fund) for the CDE to convene and staff the
committee, and to reimburse the committee members as
required. Potentially significant ongoing cost pressure to
expand services.
Provider workshops: Significant ongoing cost pressure on
the CDE to allocate additional funds to resource and
referral agencies for the free workshops this bill requires
them to provide.
DSS work group: Potentially significant ongoing workload to
the DSS; the DSS may incur additional costs if travel and
other expenses are to be reimbursed to participants (who
will be selected by the PO and the FCCP Advisory Committee).
Potentially significant ongoing cost pressure to expand
services.
Background: California subsidizes child care and development for
certain low income families. The state's subsidized child care
system serves approximately 360,000 children. Care is provided
to children in families currently or previously receiving
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CalWORKs, as well as to other working families subject to
available resources. The state spends approximately $2.2 billion
on child care, annually, which is made up of a mix of state
funds and federal funds from the Temporary Assistance for Needy
Families (TANF) and the Child Care and Development block grants.
Existing law requires that day care centers and some family
child care homes be licensed and registered with the state.
Regulations governing the care, including licensing fee levels,
are often based upon on the number of children in care. Family
child care homes, where the child care is provided by someone
who resides in the home where the care is provided, may only
take care of up to 14 children, while day care centers may be
licensed for more children. (Health and Safety Code � 1596.78,
1596.80, and 1596.803)
Existing law exempts family child care providers from the
licensing requirement if they meet any of the following
criteria: a) the family day care home is providing care for only
one family in addition to the provider's own children; b)
parents have come together for a cooperative arrangement to
combine their efforts for the care of all of their children and
no payment is involved; c) the provider is taking care of a
relative's child: or, d) the family child care program operates
only one day per week for no more than four hours.
(HSC � 1596.792 & 1597.53)
Existing law authorizes the SPI to develop standards for quality
child care programs and to enter into contracts with child care
centers and family child care homes. Existing law also
authorizes the CDE to create alternative payment ("voucher")
providers in each county to establish a reimbursement system for
subsidized child care in which, among other things, eligible
parents can choose a licensed day care center or family child
care home, and the state reimburses the provider the same rate
that the provider charges a family that is not subsidized, up to
a ceiling established by the state. (Education Code � 8220 to
8227)
Proposed Law: AB 641 gives licensed and unlicensed child care
providers the right to form a single, statewide child care PO to
negotiate collectively with the state. Specifically, this bill:
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1) Extends the state action antitrust exemption to the
activities of the family child care providers and their
representatives;
2) Creates a right for family child care providers to form
provider organizations. Child care providers would retain
the right to join or not join such an organization;
3) Requires the DSS to, within 10 days of receipt of a
request from a PO, make available to that PO information
regarding licensed family child care providers, including
each provider's contact information;
4) Requires the CDE, within 30 days of receipt of a request
from a PO, with the assistance of the relevant
organization, to collect information regarding family child
care providers, including each provider's contact
information, and whether or not the provider has
participated in a child care subsidy program in the
previous 6 months. The CDE must make that information
available to the PO, and the requesting PO must bear the
reasonable costs of collecting the information;
5) Creates a certification process, and requires the PERB
to conduct an election to certify the provider organization
as the exclusive bargaining representative;
6) Requires the PERB to receive and act upon challenges,
petitions for unit certification, and other representation
issues, and provides that all POs on the ballot must share
equally in the cost of the election;
7) Authorizes the PERB to contract with a neutral third
party to conduct all necessary elections and other
representation requests filed with PERB;
8) Creates a representation process, including providing
that the child care PO would represent all child care
providers in negotiations with the Governor and state
agencies on issues that fall within the PO's scope of
representation;
9) Specifies that the PO's scope of representation
includes: a) the administration of laws and regulations
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governing licensing of providers; b) joint labor-management
committees; c) contract grievance arbitration; d) expanded
access to professional development and training
opportunities for providers; e) benefits for providers; f)
payment procedures for child care subsidy programs; g)
reimbursement rates and other economic matters; h) expanded
access to food and nutrition programs; i) the deduction of
membership dues, fair share fees, and other authorized
voluntary deductions; j) building connections between the
family child care system and the educational system; k)
expanded access to the subsidized family child care system
for families in need; and, l) any changes to current
practice that would improve recruitment and retention of
child care providers, quality of child care programs,
additional education of qualified child care providers, and
the promotion of the health and safety of providers and the
children in their care;
10) Requires that the Governor, through the the Department
of Human Resources (CalHR), in consultation with the SPI,
other state agencies that administer programs of publicly
funded child care, and their contractors, must meet and
confer in good faith regarding on all matters within the
scope of representation with representatives of a certified
PO, as specified;
11) Requires the Governor, CalHR, and the certified PO to
jointly prepare a written memorandum of understanding
(MOU), if an agreement is reached between all parties, and
specifies this MOU is binding on all state departments and
agencies involved in the administration of child care
subsidy programs;
12) Prohibits the child care provider organization from
directing or calling a strike;
13) Authorizes the parties 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;
14) Establishes the FCCP Advisory Committee to advise the
Governor, or his or her designee, and any certified PO
regarding issues related to the quality, affordability, and
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accessibility of child care offered through child care
subsidy programs of the state. Specifies membership and
reimbursement limitations;
15) Requires the DSS to consult with a stakeholder
workgroup comprised of child care providers selected by the
statewide PO, parents/guardians of children attending
family child care selected by the FCCP Advisory Committee,
and the CDE, as specified.
Related Legislation: AB 101 (Perez) 2011 was substantially
similar to this bill, which was vetoed by Governor Brown,
stating (in part):
"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."
SB 867 (Cedillo) 2008 was nearly identical to AB 1164 (de Leon)
2007, which was vetoed by Governor Schwarzenegger, stating:
"Changes in the current reimbursement structure, increases in
family child care provider reimbursement rates, expanded
provider training efforts, or other program enhancements could
come at the expense of the number of available child care
slots. In light of the current structural budget deficit, it
is imperative that we balance our fiscal reality and the need
to provide services to working families."
Staff Comments: The full cost of this bill will be determined by
depending on the scope and pace of collective bargaining, and
numerous decisions made by the various entities empowered (or,
in comes cases, required) to make them: family child care homes
and licensed-exempt providers, POs, the CDE, the DSS, the PERB,
and the Governor. This bill authorizes actions that are
currently prohibited by state law; there will be fiscal
ramifications to those actions, but their extent will change
over time.
This bill would allow family child care homes and
licensed-exempt providers, which provide about one-third of the
subsidized child care in California, to form or join a PO to
bargain with the state on their behalf. It specifies that, among
other things, the PO will represent the more than 33,000
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providers in areas related to: 1) expanded access to
professional development and training opportunities; 2) benefits
for providers; 3) payment procedures for child care subsidy
programs; 3) reimbursement rates and other economic matters; 4)
expanded access to food and nutrition programs; 5) expanded
access to the subsidized family child care system for families
in need; and, l) any changes to current practice that would
improve recruitment and retention of child care providers,
quality of child care programs, additional education of
qualified child care providers, and the promotion of the health
and safety of providers and the children in their care.
Negotiations in these areas will drive increased costs for the
state, and the negotiated changes will likely be the most costly
aspect of this bill.
The purpose of PO representation is to negotiate a better
contract for child care providers, likely through increased
salary and benefits and better working conditions for providers,
which will lead to higher child care costs. The CalWORKs program
requires the state to provide subsidized child care to parents
who meet eligibility requirements; increased child care costs
will be borne state and federal funds for subsidized care. The
ultimate amount, however, is unknown. It will change over time,
and it will depend upon what benefits are collectively
bargained.
Another substantial upfront cost of this bill will be collecting
individual provider data to share with the PO, calculating the
fair share fee amount, and collecting fees. The bill appears to
make the responsibility for these activities an issue of
collective bargaining. Assuming that it becomes the
responsibility of the CDE to collect the information from
Alternative Payment providers, and complete related activities,
the costs for the CDE administration are reflected in the Fiscal
Impact (on Page 1). While the bill seems to allow for the CDE to
charge the PO some level of administrative fee for collecting
fair share contributions, it does not appear that the CDE could
fully recover its costs (particularly the millions of dollars in
upfront costs for data collection and system-building). If
Alternative Payment providers are expected to complete this
work, there will likely be additional pressure to for the state
to provide more child care funds to offset their costs.
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