BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 29, 2015


                           ASSEMBLY COMMITTEE ON EDUCATION


                              Patrick O'Donnell, Chair


          AB 233  
          (Lopez) - As Amended April 9, 2015


             [Note: This bill was doubled referred to the Assembly Human  
          Services Committee and was heard by that Committee as it relates  
                         to issues under its jurisdiction.]
          


          SUBJECT:  Child care and development services:  alternative  
          payment programs:  reimbursement rates


          SUMMARY:  Provides a 12-month eligibility determination process  
          for specified child care and development programs and makes  
          changes to the administration of various programs.   
          Specifically, this bill:  




          1)Adds "access" to the current designated purpose of alternative  
            payment programs (APPs) of allowing for maximum parental  
            choice.


          2)Establishes an eligibility determination process of every 12  
            months for APPs.









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          3)Deletes the requirement that alternative payment (AP) child  
            care providers maintain monthly attendance records or invoices  
            in the unaltered original format and instead simply requires  
            that these records or invoices be maintained.




          4)Deletes the requirement that contractors track absences for  
            purpose of reimbursement to providers through an APP.


          5)Authorizes an APP to implement an altered rate level once per  
            year.




          6)Deletes the requirement that a licensed child care provider  
            post its rates and discounts or scholarship policies in a  
            prominent location adjacent to the provider's license at a  
            child care facility.


          7)Deletes the requirement for an APP to verify provider rates no  
            less frequently than once a year by randomly selecting 10% of  
            licensed child care providers serving subsidized families.  


          8)Deletes the provision requiring the California Department of  
            Education (CDE) to develop regulations addressing  
            discrepancies in the provider rate levels identified through  
            the rate verification process.











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          9)Changes the requirement that every agency operating both a  
            direct service program and an APP provide at least four  
            referrals to a family, as specified, to apply only to resource  
            and referral agencies.




          10)Specifies that a family may receive child care services for  
            12 months, rather than 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.




          11)Specifies that a family that transfers from one subsidized  
            child care program to another in order to maintain eligibility  
            shall be considered continuously eligible for services for 12  
            months from the time of initial, or subsequent, eligibility  
            determination.   




          12)States that it is the intent of the Legislature that an  
            extension of the 60-day working period improve services in  
            areas with high unemployment rates or areas with  
            disproportionately high numbers of seasonal agricultural jobs,  
            or both.




          13)Deletes the requirement that families have a physical  
            examination and evaluation, including age-appropriate  








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            immunization, as a condition of enrollment in a child care and  
            development program.  Deletes the requirement that 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.  Deletes the requirement  
            that 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.




          14)Specifies that the funding and reimbursement procedures the  
            Superintendent of Public Instruction (SPI) is currently  
            required to adopt rules, regulations, and guidelines for apply  
            to contractors operating centers, family child care homes, or  
            both.




          15)Authorizes an APP contractor to develop a written policy  
            directing parents to pay family fees directly to the child  
            care provider.  Establishes requirements related to this  
            process, as follows:




             a)   The contractor shall provide written notification of the  
               assessed fee to both the parent and the child care  








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               provider.




             b)   The contractor shall deduct the amount of the family fee  
               assessed to the parent when calculating the payment due to  
               the child care provider.




             c)   The contractor shall report its payment to the child  
               care provider plus the assessed family fees as an expense  
               on the attendance and expenditure reports as required by  
               regulation.




             d)   A contractor with a written policy directing parents to  
               pay family fees directly to the child care provider are  
               exempt from all of the following:




               i)     Requiring families to pay family fees in advance of  
                 child care services.




               ii)    Requiring any record or proof that the family paid  
                 any applicable family fees to the child care provider.












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               iii)   Notification of delinquent fees or termination for  
                 delinquent fees.




             e)   The contractor is authorized to require child care  
               providers to collect the family fee, which shall be  
               deducted from the reimbursement to the child care provider,  
               or to collect the family fee amount directly from the  
               parent.


          16)Strikes obsolete provisions and makes technical,  
            non-substantive changes.


          EXISTING LAW: 


          1)Establishes eligibility for child care services and child  
            development programs administered by the CDE and requires the  
            SPI to adopt rules and regulations on eligibility, enrollment  
            and priority of services needed for implementation (Education  
            Code (EC) Section 8263).

          2)Provides that CalWORKs recipients are eligible for three  
            stages of child care services.  Stage one child care begins  
            when a recipient first receives CalWORKs aid and is limited to  
            six months.  Stage two begins when a recipient's work or work  
            activity is stable and is available for up to two years after  
            a recipient is no longer eligible for CalWORKs aid.  Families  
            can maintain child care benefits if it meets income  
            eligibility under stage 3 if there are slots available.  (EC  
            Sections 8350-8359.1)

          3)Specifies that in order to be eligible for federal and state  
            subsidized child development services, families must meet at  
            least one requirement in each of the following areas:








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             a)   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; and,

             b)   A family needs the child care services (A) because the  
               child is identified by a legal, medical, 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. (EC Section 8263(a))

          4)Defines "income eligible" as a family whose adjusted monthly  
            income is at or below 70% of the state median income (SMI),  
            adjusted for family size, and adjusted annually.  For the  
            2014-15 fiscal year, the income eligibility shall be 70% of  
            the SMI that was in use for the 2007-08 fiscal year, adjusted  
            for family size.  (EC Section 8263.1)

          5)Authorizes child care and development funds to be used for  
            APPs to allow for maximum parental choice.  (EC Section 8220)

          6)Requires the SPI to establish a family fee schedule for  
            subsidized child care, as specified, contingent on income and  
            subject to a cap.  (EC Section 8273)


          FISCAL EFFECT:  Unknown


          COMMENTS: Background on child care and development programs.   
          The CDE administers a child care and development system,  
          maintaining over 1,300 service contracts with approximately 750  








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          public and private agencies supporting and providing services to  
          children from birth through 12 years of age. Contractors include  
          school districts, county offices of education, cities, colleges,  
          other public entities, community-based organizations, and  
          private agencies.  Programs administered by the CDE include  
          General Child Care, California State Preschool Program, Migrant  
          Child Care, and APPs.  In fiscal year (FY) 2014-15, $2.4 billion  
          was provided for child care and development programs from state  
          and federal funds, offering 355,000 slots.  


          This bill is sponsored by the California Alternative Payment  
          Program Association (CAPPA).  APPs, funded with state and  
          federal funds, offer a variety of child care arrangements for  
          parents, including licensed family child care homes and  
          center-based care, and arrange for payments to licensed-exempt  
          providers, who are relatives or friends of parents or guardians.  
           The APP helps families access child care services and makes  
          payment for those services directly to the child care provider  
          selected by the family.  The APP is intended to increase  
          parental choice and accommodate the individual needs of the  
          family.  APPs are reimbursed based on the number of children  
          served and funds are appropriated based on the fiscal reporting  
          process and budget estimations.  In 2013-14, there were 76 APPs  
          throughout the state and they range from private, nonprofit  
          organizations to county offices of education.  APPs began as  
          pilot programs in 1977 and became permanent in 1980.


          The bill has the following major components:


          1)12-month eligibility:  This bill extends eligibility for child  
            care services to 12 months for APPs and for families  
            transferring from one subsidized child care program to  
            another.  With the exception of families receiving care due to  
            social services placements, California already has a 12-month  
            eligibility determination practice.  The issue addressed by  
            the bill is whether and to what extent families should be  








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            required to report changes during the 12 month period and  
            whether these changes should result in termination of  
            services.  California requires families to report any changes  
            in income or need within five calendar days.  This bill  
            negates this regulation and the requirement for contractors to  
            recertify families receiving services.  



            The 12-month eligibility provision is incorporated in the APP  
            section of the EC and in the section regarding families  
            transferring from one subsidized child care program to  
            another.  Staff recommends striking the 12-month eligibility  
            language in the two sections in the bill and instead adding a  
            new subdivision in EC 8263 to apply the 12-month eligibility  
            determination to all child care and development programs.  





            A 12-month eligibility determination provides certainty to  
            families.  It is also consistent with the changes in the  
            reauthorization of the federal Child Care and Development  
            Block Grant, from which California received $570 million in  
            2014-15.





          2)Physical examination and evaluation.  The bill deletes  
            requirements that a physical exam and evaluation, including  
            age-appropriate immunization, be required before, or within  
            six weeks of, enrollment.  The bill also strikes the provision  
            offering an exemption from the requirement for religious  
            reasons, and the authority to remove a child temporarily if a  
            child is suffering from a recognized contagious or infectious  
            disease.  According to the sponsor, this provision was removed  








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            because APPs do not directly work with children.  This  
            provision is not specific to APPs and should not be deleted.   
            Staff recommends reinstating this provision and instead adding  
            language clarifying the provisions that apply to providers.     




          3)Elimination of requirement for APs to verify provider rates.   
            This bill eliminates a requirement for an APP to verify  
            provider rates at least once a year in order to ascertain the  
            rates charged to nonsubsidized families.  The sponsor argues  
            that this is unnecessary because the rates is established by  
            the regional market rate established by the Legislature.   
            According to the CDE, this provision is necessary to verify  
            the amount being charged to non-subsidized families.  Staff  
            recommends reinstating this provision.



          4)Family fee.  This bill authorizes an APP to develop a written  
            policy that directs parents to pay family fees directly to the  
            child care provider and exempts APs from the responsibility  
            for collecting fees.  This provision reduces administrative  
            responsibilities for APs, but may put a burden and financial  
            risk on a provider to collect fees, as the bill authorizes the  
            AP contractor to deduct the family fee amount in the  
            reimbursement to a child care provider.  It is also unclear  
            who will be responsible for conducting the administrative  
            functions currently required of APs, such as maintaining  
            records of payments and issuing a Notice of Action if a family  
            fails to pay a fee.  According to the sponsor, many providers  
            have already assumed the responsibilities for collecting the  
            fees.  Staff recommends adding an amendment to specify that an  
            AP may direct a parent to pay family fees directly to a  
            provider upon agreement by a child care provider to collect  
            the fee.  
          Arguments in support. According to the author, "The priority of  
          this bill is to provide maximum parental choice, access and  








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          stable child care for eligible working families up to 12 months.  
           Our working poor families dealing with a multitude of poverty  
          stressors, that are getting up, working and doing everything we  
          ask of them to move towards self-sufficiency, ought to have  
          peace of mind that their child care is stable.  Additionally,  
          this bill aims to create greater efficiencies and maximize the  
          use of public funds to greater support working families."

            


          REGISTERED SUPPORT / OPPOSITION:




          Support


          One individual




          Opposition


          None on file




          Analysis Prepared by:Sophia Kwong Kim / ED. / (916) 319-2087














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