California Legislature—2015–16 Regular Session

Assembly Bill No. 233

Introduced by Assembly Member Lopez

February 4, 2015

An act to amend Sections 8220, 8221.5, 8222, 8227.3, 8261, 8263, 8265, 8269, 8273, and 8385 of, to amend the heading of Article 16.5 (commencing with Section 8385) of Chapter 2 of Part 6 of Division 1 of Title 1 of, and to repeal Section 8225 of, the Education Code, relating to child care.

LEGISLATIVE COUNSEL’S DIGEST

AB 233, as introduced, Lopez. Child care and development services: alternative payment programs: reimbursement rates.

The Child Care and Development Services Act has a purpose of providing a comprehensive, coordinated, and cost-effective system of child care and development services for children from infancy to 13 years of age and their parents, including a full range of supervision, health, and support services through full- and part-time programs. The act requires the State Department of Education to contract with local contracting agencies for alternative payment programs that are intended to allow for maximum parental choice in child care. The act, to provide maximum parental choice, authorizes alternative payment programs to include certain things, including a subsidy that follows the family from one provider to another, as provided.

This bill would, to provide maximum parental choice and access, authorize alternative payment programs to also include an eligibility determination process of not less than once every 12 months.

The act requires certain child care providers to submit to the alternative payment program a monthly attendance record or invoice, as provided, and requires the record or invoice to be maintained by the child care provider in the unaltered original form in which it was created. The act requires the alternative payment program to reimburse child care providers based on specified criteria, including based on hours of service. The act prohibits contractors from being required to track absences.

This bill would delete the requirement that the child care provider maintain the record or invoice in the unaltered original form in which it was created. The bill would delete the requirement that alternative payment programs reimburse child care providers based on the specified criteria. The bill would delete the prohibition on contractors from being required to track absences.

The act requires an alternative payment program to reimburse a licensed child care provider for child care 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 providers for prospective nonsubsidized families. The act requires a licensed child care provider to submit to the alternative payment program a copy of the provider’s rate sheet listing the rate charged, among other things.

This bill would instead require an alternative payment program to reimburse a licensed child care provider for child care of a subsidized child based on the rate charged by the provider to nonsubsidized families. The bill would delete the requirement for the licensed child care provider to submit to the alternative payment program a copy of the provider’s rate sheet, among other things.

The act requires an alternative payment program to verify provider rates no less frequently than once a year, as provided, and requires the department to develop regulations for addressing discrepancies in provider rate levels identified through this verification process.

This bill would delete these requirements and would require an alternative payment program to develop a rate verification process.

The act requires, when making referrals, every agency operating both a direct service program and an alternative payment program to provide at least 4 referrals, as provided, to a family.

This bill would delete this requirement.

The act authorizes alternative payment programs and providers operating or providing services to maintain records in electronic format only if the original documents were created in electronic format.

This bill would authorize alternative payment programs and providers to maintain records in electronic format regardless of whether they were created in electronic format. The bill would require alternative payment programs to create and maintain specified records, including parental job verification records.

The act requires the Superintendent of Public Instruction to adopt rules and regulations that do certain things, including provide for a contract monitoring system, specify adequate standards of agency performance, set forth standards for department site visits to contracting agencies, and authorize the department to develop a process that requires every contracting agency to recompete for continued funding no less frequently than every 5 years.

This bill would delete the requirement that the Superintendent adopt rules and regulations relating to the above provisions.

The act provides that a family enrolled in a state or federally funded child care and development program whose services would otherwise be terminated, as provided, may continue to receive child development services, as provided.

This bill would instead require that a family enrolled in a state or federally funded child care and development program to be considered eligible for services for 12 months from time of initial, or annual, eligibility determination.

Existing law provides that, if the basis of need as stated on the application for services is seeking employment, the parent’s period of eligibility for child care and development services is limited to 60 working days during the contract period. The act authorizes the Superintendent to extend this period for an additional 60 working days, as provided.

This bill would delete the Superintendent’s authority to make this extension.

The act requires the Superintendent to implement a plan that, among other things, establishes reasonable standards and assigned reimbursement rates, as provided, and requires the Superintendent to confer with applicant agencies when establishing the standards and rates.

This bill would require the applicant agencies to establish, as applicable, full-time, part-time, and hourly rates and to establish reimbursement rates that best meet the needs of the community, as provided.

The act authorizes the Superintendent to establish regulations concerning conditions of service and hours of enrollment for children in the programs.

This bill would delete this authorization, among other changes.

The act requires the Superintendent to adopt rules, regulations, and guidelines to facilitate the funding and reimbursement procedures.

This bill would require the Superintendent to adopt these rules, regulations, and guidelines to facilitate the funding and reimbursement procedures for contractors operating centers, family child care homes, or both, as well as for contractors who do not operate a center, family child care home, or both. The bill would require the contractors who do not operate a center, family child care home, or both to establish a specified rate reimbursement structure to meet a certified need for child care, as provided.

The act requires the Superintendent to establish a fee schedule for families using preschool and child care and development services.

This bill would require the amount of the family fee to be deducted from the reimbursement to a provider.

The act requires the department, in consultation with the State Department of Social Services and with fraud investigation experts, as provided, to perform an error rate study to estimate the percentage of errors relating to child care and development services. The act requires the department to develop recommendations for the prevention and elimination of child care fraud and programmatic errors and the identification and collection of child care overpayments. The act requires the department to report its recommendations to the respective policy and fiscal committees of the Legislature by April 1, 2005.

This bill would delete these requirements.

This bill would also make conforming and nonsubtantive changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 8220 of the Education Code is amended
to read:

8220.  

begin insert (a) end insert begin insert   end insert Upon the approval of the State Department of
Education, funds appropriated for the purposes of this chapter may
be used for alternative payment programs to allow for maximum
parental choice. Various methods of reimbursement for parental
costs for child care may be utilized. All payment arrangements
shall conform to the eligibility criteria and the parent fee schedule
established pursuant to Sections 8263 and 8265.

begin delete

To

end delete

begin insert (b) end insert begin insert   end insert begin insert To end insert provide for maximum parental choice begin insert and access end insert ,
alternative payment programs may include the following:

begin insert

(1) An eligibility determination process of not less than once
every 12 months.

end insert begin delete

(a)

end delete

begin insert (2) end insert  A subsidy that follows the family from one provider to
another within a given alternative payment program.

begin delete

(b)

end delete

begin insert (3) end insert  Choices, begin delete whenever end delete begin insert when end insert possible, among hours of service
including before and after school, evenings, weekends, and split
shifts.

begin delete

(c)

end delete

begin insert (4) end insert  Child care and development services according to parental
choice, including use of family day care homes, general center
based programs, and other state-funded programs to the extent that
those programs exist in the general service area and are in
conformity with the purposes and applicable laws for which those
programs were established, but excluding state preschool programs.

SEC. 2.  

Section 8221.5 of the Education Code is amended to
read:

8221.5.  

(a) Child care providers authorized to provide services
pursuant to this article 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 and the time the child left care each day. The
information shall be documented on a daily basis.

(b) The monthly attendance record or invoice shall, at a
minimum, be signed by the parent or guardian of the child receiving
services and the child care 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 child care provider.

(c) The monthly attendance record or invoice shall be maintained
by the child care provider begin delete in the unaltered original format in which
it was created, which may be in paper form or electronic format end delete .

(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 and the time the child left care each day.
begin delete The alternative payment program shall reimburse child care
providers based upon the following criteria: end delete

begin delete

(1) The hours of service provided that are broadly consistent
with certified hours of need.

end delete begin delete

(2) For families with variable schedules, the actual days and
hours of attendance, up to the maximum certified hours.

end delete begin delete

(3) For license-exempt providers that provide part-time services,
the actual days and hours of attendance, up to the maximum
certified hours.

end delete begin delete

(e) For purposes of reimbursement to providers through an
alternative payment program, contractors shall not be required to
track absences.

end delete begin delete

(f)

end delete

begin insert (e) end insert  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
and the time the child left care each day, that is signed under
penalty of perjury by both the parent or guardian and the child care
provider, attesting that the information provided is accurate.

begin delete

(g) This section shall become operative on July 1, 2014.

end delete

SEC. 3.  

Section 8222 of the Education Code is amended to
read:

8222.  

(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. begin delete No end delete begin insert An end insert agency begin delete may end delete begin insert shall
not end insert 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
8265.5.

(b) Alternative payment programs shall reimburse licensed child
care providers in accordance with a biennial market rate survey
pursuant to Section 8447, at a rate not to exceed the ceilings
established pursuant to Section 8357.

(c) An alternative payment program shall reimburse a licensed
provider for child care of a subsidized child based on the rate
charged by the provider to nonsubsidized begin delete families, if any, for the
same services, or the rates established by the provider for
prospective nonsubsidized families. A licensed child care provider
shall submit to the alternative payment program a copy of the
provider’s 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. end delete begin insert families. end insert

begin delete

(d) An alternative payment program shall maintain a copy of
the rate sheet and the confirmation statement.

end delete begin delete

(e)

end delete

begin insert (d) end insert  A licensed child care provider shall submit to the local
resource and referral agency a copy of the provider’s rate sheet
listing rates charged, and the provider’s discount or scholarship
policies, if any, and shall self-certify that the information is correct.

begin delete

(f) Each

end delete

begin insert (e) end insert begin insert   end insert begin insert A end insert licensed child care provider may alter rate levels for
subsidized children once per year 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.

begin delete

(g)

end delete

begin insert (f) end insert  A licensed child care provider shall post in a prominent
location adjacent to the provider’s license at the child care facility
the provider’s rates and discounts or scholarship policies, if any.

begin delete

(h) An alternative payment program shall verify provider rates
no less frequently than once a year by randomly selecting 10
percent of licensed child care providers serving subsidized families.
The purpose of this verification process is to confirm that rates
reported to the alternative payment programs reasonably correspond
to those reported to the resource and referral agency and the rates
actually charged to nonsubsidized families for equivalent levels
of services. It is the intent of the Legislature that the privacy of
nonsubsidized families shall be protected in implementing this
subdivision.

end delete begin delete

(i) The department shall develop regulations for addressing
discrepancies in the provider rate levels identified through the rate
verification process in subdivision (h).

end delete begin insert

(g) An alternative payment program shall develop a rate
verification process.

end insert

SEC. 4.  

Section 8225 of the Education Code is repealed.

begin delete

8225.  

When making referrals, every agency operating both a
direct service program and an alternative payment program shall
provide at least four referrals, at least one of which shall be a
provider over which the agency has no fiscal or operational control,
as well as information to a family on the family’s ability to choose
a license exempt provider.

end delete

SEC. 5.  

Section 8227.3 of the Education Code is amended to
read:

8227.3.  

(a) Alternative payment programs and providers
operating or providing services pursuant to this article may
maintain records in electronic begin delete format only if the original documents
were created in electronic format. Records that may be created in
electronic format and maintained electronically include, but are
not limited to, the following: end delete begin insert format. end insert

begin delete

(1) Child immunization records.

end delete begin delete

(2) Parental job verification records.

end delete begin delete

(3) Parent income verification.

end delete begin delete

(4) Parent school or training verifications and attendance
records.

end delete begin insert

(b) Alternative payment programs shall create and maintain
the following records:

end insert begin insert

(1) Parental job verification records.

end insert begin insert

(2) Parent income verification.

end insert begin insert

(3) Parent school or training verifications and attendance
records.

end insert begin delete

(b)

end delete

begin insert (c) end insert  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.

begin delete

(c) Nothing in this

end delete

begin insert (d) end insert begin insert   end insert begin insert This end insert section begin delete requires end delete begin insert does not require end insert an alternative payment
program or provider to create records electronically.

SEC. 6.  

Section 8261 of the Education Code is amended to
read:

8261.  

(a) The Superintendent shall adopt rules and regulations
pursuant to this chapter. The rules and regulations shall include,
but not be limited to, provisions begin delete which end delete begin insert that end insert do all of the following:

(1) Provide clear guidelines for the selection of agencies when
child development contracts are let, including, but not limited to,
specification that begin delete any end delete begin insert an end insert agency headquartered in the proposed
service area on January 1, 1985, will be given priority for a new
contract in that area, unless the department makes a written
determination that (A) the agency is not able to deliver the level
of services specified in the request for proposal, or (B) the
department has notified the agency that it is not in compliance
with the terms of its contract.

begin delete

(2) Provide for a contract monitoring system to ensure that
agencies expend funds received pursuant to this chapter in
accordance with the provisions of their contracts.

end delete begin delete

(3) Specify adequate standards of agency performance.

end delete begin delete

(4)

end delete

begin insert (2) end insert  Establish reporting requirements for service reports,
including provisions for varying the frequency with which these
reports are to be submitted on the basis of agency performance.

begin delete

(5)

end delete

begin insert (3) end insert  Specify standards for withholding payments to agencies that
fail to submit required fiscal reports.

begin delete

(6) Set forth standards for department site visits to contracting
agencies, including, but not limited to, specification as to the
purpose of the visits, the personnel that will perform these visits,
and the frequency of these visits which shall be as frequently as
staff and budget resources permit. By September 1 of each year,
the department shall report to the Senate Education, Senate Health
and Human Services, Assembly Education, and Assembly Human
Services Committees on the number of visits conducted during
the previous fiscal year pursuant to this paragraph.

(7) Authorize the department to develop a process that requires
every contracting agency to recompete for continued funding no
less frequently than every five years.

end delete

(b) The Superintendent shall consult with the State Department
of Social Services with respect to rules and regulations adopted
relative to the disbursal of federal funds under Title XX of the
federal Social Security Act.

(c) For purposes of expediting the implementation of state or
federal legislation to expand child care services, the Superintendent
may waive (1) the regulations regarding the point qualifications
for, and the process and scoring of, interviews of contract
applicants pursuant to Section 18002 of Title 5 of the California
Code of Regulations, or (2) the time limitations for scheduling and
notification of appeal hearings and their results pursuant to Section
18003 of Title 5 of the California Code of Regulations. The
Superintendent shall ensure that the appeal hearings provided for
in Section 18003 of Title 5 of the California Code of Regulations
are conducted in a timely manner.

(d) (1) Child care and development programs operated under
contract from funds made available pursuant to the federal Child
Care and Development Fund, shall be administered according to
Division 19 (commencing with Section 17906) of Chapter 1 of
Title 5 of the California Code of Regulations, unless provisions
of these regulations conflict with federal regulations. If state and
federal regulations conflict, the federal regulations shall apply
unless a waiver of federal regulations is authorized.

(2) For purposes of this section, “Child Care and Development
Fund” has the same meaning as in Section 98.2 of Title 45 of the
Code of Federal Regulations.

SEC. 7.  

Section 8263 of the Education Code is amended to
read:

8263.  

(a) The Superintendent shall adopt rules and regulations
on eligibility, enrollment, and priority of services needed to
implement this chapter. In order to be eligible for federal and state
subsidized child development services, families shall meet at least
one requirement in each of the following areas:

(1) A family is (A) a current aid recipient, (B) income eligible,
(C) homeless, or (D) one whose children are recipients of protective
services, or whose children have been identified as being abused,
neglected, or exploited, or at risk of being abused, neglected, or
exploited.

(2) A family needs the child care services (A) because the child
is identified by a legal, medical, or social services agency, or
emergency shelter as (i) a recipient of protective services or (ii)
being neglected, abused, or exploited, or at risk of neglect, abuse,
or exploitation, or (B) because the parents are (i) engaged in
vocational training leading directly to a recognized trade,
paraprofession, or profession, (ii) employed or seeking
employment, (iii) seeking permanent housing for family stability,
or (iv) incapacitated.

(b) Except as provided in Article 15.5 (commencing with Section
8350), priority for federal and state subsidized child development
services is as follows:

(1) (A) First priority shall be given to neglected or abused
children who are recipients of child protective services, or children
who are at risk of being neglected or abused, upon written referral
from a legal, medical, or social services agency. If an agency is
unable to enroll a child in the first priority category, the agency
shall refer the family to local resource and referral services to
locate services for the child.

(B) A family who is receiving child care on the basis of being
a child at risk of abuse, neglect, or exploitation, as defined in
subdivision (k) of Section 8208, is eligible to receive services
pursuant to subparagraph (A) for up to three months, unless the
family becomes eligible pursuant to subparagraph (C).

(C) A family may receive child care services for up to 12 months
on the basis of a certification by the county child welfare agency
that child care services continue to be necessary or, if the child is
receiving child protective services during that period of time, and
the family requires child care and remains otherwise eligible. This
time limit does not apply if the family’s child care referral is
recertified by the county child welfare agency.

(2) Second priority shall be given equally to eligible families,
regardless of the number of parents in the home, who are income
eligible. Within this priority, families with the lowest gross monthly
income in relation to family size, as determined by a schedule
adopted by the Superintendent, shall be admitted first. If two or
more families are in the same priority in relation to income, the
family that has a child with exceptional needs shall be admitted
first. If there is no family of the same priority with a child with
exceptional needs, the same priority family that has been on the
waiting list for the longest time shall be admitted first. For purposes
of determining order of admission, the grants of public assistance
recipients shall be counted as income.

(3) The Superintendent shall set criteria for, and may grant
specific waivers of, the priorities established in this subdivision
for agencies that wish to serve specific populations, including
children with exceptional needs or children of prisoners. These
new waivers shall not include proposals to avoid appropriate fee
schedules or admit ineligible families, but may include proposals
to accept members of special populations in other than strict income
order, as long as appropriate fees are paid.

(c) Notwithstanding any other law, in order to promote
continuity of services, a family enrolled in a state or federally
funded child care and development program begin delete whose services would
otherwise be terminated because the family no longer meets the
program income, eligibility, or need criteria may continue to
receive child development services in another state or federally
funded child care and development program if the contractor is
able to transfer the family’s enrollment to another program for
which the family is eligible before the date of termination of
services or to exchange the family’s existing enrollment with the
enrollment of a family in another program, provided that both
families satisfy the eligibility requirements for the program in
which they are being enrolled end delete begin insert shall be considered eligible for
services for 12 months from time of initial, or annual, eligibility
determination end insert . The transfer of enrollment may be to another
program within the same administrative agency or to another
agency that administers state or federally funded child care and
development programs.

begin delete

(d) In order to promote continuity of services, the Superintendent
may extend the 60-working-day period specified in subdivision
(a) of Section 18086.5 of Title 5 of the California Code of
Regulations for an additional 60 working days if he or she
determines that opportunities for employment have diminished to
the degree that one or both parents cannot reasonably be expected
to find employment within 60 working days and granting the
extension is in the public interest. The scope of extensions granted
pursuant to this subdivision shall be limited to the necessary
geographic areas and affected persons, which shall be described
in the Superintendent’s order granting the extension. It is the intent
of the Legislature that extensions granted pursuant to this
subdivision improve services in areas with high unemployment
rates and areas with disproportionately high numbers of seasonal
agricultural jobs.

(e)

end delete

begin insert (d) end insert  A physical examination and evaluation, including
age-appropriate immunization, shall be required before, or within
six weeks of, enrollment. A standard, rule, or regulation shall not
require medical examination or immunization for admission to a
child care and development program of a child whose parent or
guardian files a letter with the governing board of the child care
and development program stating that the medical examination or
immunization is contrary to his or her religious beliefs, or provide
for the exclusion of a child from the program because of a parent
or guardian having filed the letter. However, if there is good cause
to believe that a child is suffering from a recognized contagious
or infectious disease, the child shall be temporarily excluded from
the program until the governing board of the child care and
development program is satisfied that the child is not suffering
from that contagious or infectious disease.

begin delete

(f)

end delete

begin insert (e) end insert  Regulations formulated and promulgated pursuant to this
section shall include the recommendations of the State Department
of Health Care Services relative to health care screening and the
provision of health care services. The Superintendent shall seek
the advice and assistance of these health authorities in situations
where service under this chapter includes or requires care of
children who are ill or children with exceptional needs.

begin delete

(g)

end delete

begin insert (f) end insert  The Superintendent shall establish guidelines for the
collection of employer-sponsored child care benefit payments from
a parent whose child receives subsidized child care and
development services. These guidelines shall provide for the
collection of the full amount of the benefit payment, but not to
exceed the actual cost of child care and development services
provided, notwithstanding the applicable fee based on the fee
schedule.

begin delete

(h)

end delete

begin insert (g) end insert  The Superintendent shall establish guidelines according to
which the director or a duly authorized representative of the child
care and development program will certify children as eligible for
state reimbursement pursuant to this section.

begin delete

(i)

end delete

begin insert (h) end insert  Public funds shall not be paid directly or indirectly to an
agency that does not pay at least the minimum wage to each of its
employees.

SEC. 8.  

Section 8265 of the Education Code is amended to
read:

8265.  

(a) The Superintendent shall implement a plan that
establishes reasonable standards and assigned reimbursement rates,
which vary with the length of the program year and the hours of
service.

(1) Parent fees shall be used to pay reasonable and necessary
costs for providing additional services.

(2) When establishing standards and assigned reimbursement
rates, the Superintendent shall confer with applicant agencies.
begin insert Applicant agencies shall comply with both of the following: end insert

begin insert

(A) Applicant agencies shall establish, as applicable, full-time,
part-time, and hourly rates.

end insert begin insert

(B) Applicant agencies shall establish reimbursement rates that
best meet the needs of the community, that are consistent with
certified hour of care, and that do not exceed market rate ceilings.

end insert

(3) The reimbursement system, including standards and rates,
shall be submitted to the Joint Legislative Budget Committee.

begin delete

(4) The Superintendent may establish any regulations he or she
deems advisable concerning conditions of service and hours of
enrollment for children in the programs.

end delete

(b) The standard reimbursement rate shall be nine thousand
twenty-four dollars and seventy-five cents ($9,024.75) per unit of
average daily enrollment for a 250-day year, and commencing
with the 2015-16 fiscal year, shall be increased by the
cost-of-living adjustment granted by the Legislature annually
pursuant to Section 42238.15.

begin delete

(c) The plan shall require agencies having an assigned
reimbursement rate above the current year standard reimbursement
rate to reduce costs on an incremental basis to achieve the standard
reimbursement rate.

end delete begin delete

(d)

end delete

begin insert ( end insert begin insert c) end insert  The plan shall provide for adjusting reimbursement on a
case-by-case basis, in order to maintain service levels for agencies
currently at a rate less than the standard reimbursement rate.
Assigned reimbursement rates shall be increased only on the basis
of one or more of the following:

(1) Loss of program resources from other sources.

(2) Need of an agency to pay the same child care rates as those
prevailing in the local community.

(3) Increased costs directly attributable to new or different
regulations.

(4)  begin insert (A) end insert begin insert   end insert Documented increased costs necessary to maintain the
prior year’s level of service and ensure the continuation of
threatened programs.

begin delete

Child

end delete

begin insert (B) end insert begin insert   end insert begin insert Child end insert care agencies funded at the lowest rates shall be given
first priority for increases.

begin delete

(e)

end delete

begin insert ( end insert begin insert d) end insert  The plan shall provide for expansion of child development
programs at no more than the standard reimbursement rate for that
fiscal year.

begin delete

(f)

end delete

begin insert (e) end insert  The Superintendent may reduce the percentage of reduction
for a public agency that satisfies any of the following:

(1) Serves more than 400 children.

(2) Has in effect a collective bargaining agreement.

(3) Has other extenuating circumstances that apply, as
determined by the Superintendent.

SEC. 9.  

Section 8269 of the Education Code is amended to
read:

8269.  

begin insert (a) end insert begin insert   end insert The Superintendent begin delete of Public Instruction end delete shall adopt
rules, regulations, and guidelines to facilitate the funding and
reimbursement procedures begin insert , for contractors operating centers,
family child care homes, or both, end insert required by this chapter.

begin insert

(b) (1) The Superintendent shall adopt rules, regulations, and
guidelines to facilitate the funding and reimbursement procedures
for contractors that do not operate a center, a family child care
home, or both.

end insert begin insert

(2) Contractors not operating a center, a family child care home,
or both, shall establish, as applicable, a full-time, part-time, and
hourly rate reimbursement structure to meet a certified need for
child care.

end insert begin insert

(3) Reimbursement to the provider shall be the amount the
provider charges unsubsidized families for the same hours of child
care, or the maximum subsidy amount.

end insert

SEC. 10.  

Section 8273 of the Education Code is amended to
read:

8273.  

(a) The Superintendent shall establish a fee schedule
for families using preschool and child care and development
services pursuant to this chapter, including families receiving
services pursuant to paragraph (1) of subdivision (b) of Section
8263. It is the intent of the Legislature that the new fee schedule
shall be simple and easy to implement.

(b) The family fee schedule shall retain a flat monthly fee per
family. The schedule shall differentiate between fees for part-time
care and full-time care.

begin insert

(c) The amount of a family fee shall be deducted from the
reimbursement to a provider.

end insert begin delete

(c)

end delete

begin insert ( end insert begin insert d) end insert  Using the most recently approved family fee schedule
pursuant to subdivision (f) of Section 8447, families shall be
assessed a flat monthly fee based on income, certified family need
for full-time or part-time care services, and enrollment, and shall
not be based on actual attendance. begin delete No end delete begin insert A end insert recalculation of a family
fee shall begin insert not end insert occur if attendance varies from enrollment unless a
change in need for care is assessed.

begin delete

(d)

end delete

begin insert (e) end insert  The Superintendent shall design the new family fee schedule
based on the state median income data that was in use for the
2007−08 fiscal year, adjusted for family size. The revised family
fee schedule shall begin at income levels at which families
currently begin paying fees. The revised fees shall not exceed 10
percent of the family’s monthly income. The Superintendent shall
first submit the adjusted fee schedule to the Department of Finance
for approval.

begin delete

(e)

end delete

begin insert (f) end insert  The income of a recipient of federal supplemental security
income benefits pursuant to Title XVI of the federal Social Security
Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program
benefits pursuant to Title XVI of the federal Social Security Act
(42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with
Section 12000) of Part 3 of Division 9 of the Welfare and
Institutions Code shall not be included in total countable income
for purposes of determining the amount of the family fee.

begin delete

(f)

end delete

begin insert (g) end insert  Family fees shall be assessed at initial enrollment and
reassessed at update of certification or recertification.

begin delete

(g)

end delete

begin insert (h) end insert  It is the intent of the Legislature that the new family fees
shall be cost neutral to the state and generate roughly the same
amount of revenue as was generated under the previous family fee
schedule.

SEC. 11.  

The heading of Article 16.5 (commencing with
Section 8385) of Chapter 2 of Part 6 of Division 1 of Title 1 of the Education Code is amended to read:

 

Article 16.5.  begin delete Fraud And Overpayments end delete begin insert Best Practices end insert

 

SEC. 12.  

Section 8385 of the Education Code is amended to
read:

begin delete

8385.  

(a) (1) The department, in consultation with the State
Department of Social Services, county fraud investigators, and
other fraud investigation experts, shall perform an error rate study
to estimate the percentage of errors, including, but not limited to,
overpayments and fraud, in determinations of eligibility, the need
for child care pursuant to paragraph (2) of subdivision (a) of
Section 8263, family fees, and reimbursement payments to child
care providers, including, but not limited to, authorized hours of
care and the use of adjustment factors, in programs operated
pursuant to Article 3 (commencing with Section 8220) and Article
15.5 (commencing with Section 8350). The study shall include,
but not be limited to, an analysis of a statistically valid, random,
sample of family files and reimbursement payments that have been
processed over a specified time. Each payment from the sample
shall be audited to determine whether it was correctly paid or paid
in error. Those payments identified as being paid in error shall be
classified based on the type of the error that occurred, including,
but not limited to, administrative errors, overpayment caused by
providers, overpayments caused by parents, provider fraud, and
beneficiary fraud.

(2) In conducting the compliance reviews required by regulations
of the Superintendent pursuant to Section 8261 for programs
operated pursuant to Article 8 (commencing with Section 8240),
the department shall survey a statistically valid sample of files for
the program and identify and report the errors, by category,
resulting from that survey.

(3) The department shall report in writing to the Governor, the
Chair of the Joint Legislative Budget Committee, the chairs of the
fiscal committees for both houses of the Legislature, and the
Department of Finance, information regarding the error rate study
by April 1, 2005. The report shall include, but not be limited to,
all of the following:

(A) The results of the error rate study.

(B) Fraud and overpayment reduction targets that have been
established based on the data from the error rate study.

(C) The timeframe for achieving the targets.

(D) Recommendations developed pursuant to subdivision (b).

(b) The department shall develop recommendations for the
prevention and elimination of child care fraud and programmatic
errors and the identification and collection of child care
overpayments. The recommendations shall include, but not be
limited to:

(1) Precise definitions of what constitutes child care fraud and
overpayments.

(2) A consistent statewide system to identify fraud and
overpayments.

(3) A consistent statewide system of standards for fraud
prevention, intervention, and overpayment collection that is applied
to all child care program provider categories.

(4) Statewide fraud and overpayment measures that will be
reported annually by the department.

(5) Standards for independent financial compliance audits,
including provisions to ensure that small programs are not unduly
burdened.

(6) Consistent statewide mechanisms for due process for parents.

(7) Consistent statewide mechanisms for dispute resolution for
child care programs and providers.

(8) Assessment of the cost-effectiveness of prevention and
intervention activities.

(9) Equitable treatment of all consumers of subsidized child
care.

(10) Consideration of the need to minimize new barriers to
family access to child care.

(11) A survey of best practices from both California agencies
and providers and from other states.

(c) In developing its recommendations, the department shall
place priority on prevention of fraud and overpayments, and shall
consider existing best practices for doing so. The department shall
make any identified best practices available on its Web site by
March 1, 2005.

(d) The department shall consult with representatives of the
State Department of Social Services, the Legislative Analyst’s
Office, the Department of Finance, staff from the appropriate policy
and fiscal committees of each house of the Legislature, and other
interested parties including, but not limited to, child care consumers
and providers, representatives from county welfare departments,
district attorneys, county special investigative units, and legal
advocacy organizations representing consumers in developing
these recommendations.

(e) The department shall report its recommendations directly
to the respective policy and fiscal committees of the Legislature
by April 1, 2005.

(f) 

end delete

begin insert

begin insert 8385. end insert   

end insert

On or after July 1, 2005, all child care contracts entered
into by the begin delete State Department of Education end delete begin insert department end insert for
means-tested child care programs, including, but not limited to,
the programs described in Article 3 (commencing with Section
8220), Article 8 (commencing with Section 8240), and Article
15.5 (commencing with Section 8350), shall require
implementation of best practices begin delete identified pursuant to subdivision
(c) end delete .