BILL ANALYSIS Ó
AB 233
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
233 (Lopez) - As Amended May 6, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill adopts a 12-month eligibility determination process
for subsidized child care, and removes certain reporting and
administrative requirements. Specifically, this bill:
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1)Establishes an eligibility determination process of every 12
months for Alternative Payment Programs (APPs).
2)Deletes the requirement that APP 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.
3)Deletes the requirement that contractors track absences for
purpose of reimbursement to providers through an APP, and
authorizes an APP to implement an altered rate level once a
year.
4)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.
5)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.
6)Specifies that a family that transfers from one subsidized
child care program to another in order to maintain eligibility
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shall be considered continuously eligible for services for 12
months from the time of initial, or subsequent, eligibility
determination.
7)Requires the Superintendent of Public Instruction (SPI) to
adopt rules, regulations, and guidelines to facilitate the
funding and reimbursement for contractors operating centers,
family child care homes, or both.
8)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.
FISCAL EFFECT:
1)The proposal to remove requirements for providers to keep
documentation in the unaltered original format is problematic
to CDE. They note audit and legal considerations regarding the
increased risk for fraud and the possible loss of some or all
of CDEs $700 million federal child care dollars due to
inadequate controls on the use of those funds. They have been
working with the sponsor to develop the necessary controls to
protect the federal funds, but those controls are not in the
bill. Absent those controls, CDE anticipates the following
costs.
a) One-time costs of approximately $75,000 to train CDE
audit staff and revise audit procedures.
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b) On-going costs of up to $4.9 million due to increased
audit field work costs of between $70,000 and $100,000 per
on site audit, and for review of the independent audits of
the 1,227 child care contractors.
1)Potential costs due to potential caseload increases in Stage 2
and Stage 3 CalWORKs childcare (federal funds/GF), resulting
from the 12 month eligibility changes.
2)One-time costs, unknown, but likely minor, for the SPI to
adopt rules, regulations, and guidelines to facilitate the
funding and reimbursement procedures specific for contractors
operating centers, family child care homes, or both.
COMMENTS:
1)Purpose. According to the author, "The priority of this bill
is to provide maximum parental choice, access and stable child
care for eligible working families up to 12 months. Our
working poor families dealing with a multitude of poverty
stressors 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."
In addition, adopting a 12-month eligibility period for
subsidized child care will help bring the state into
conformity with pending federal requirements per the Child
Care and Development Block Grant Act of 2014.
2)Background. The California Department of Education (CDE)
administers a child care and development system, maintaining
over 1,300 service contracts with approximately 750 public and
private agencies supporting and providing services to children
from birth through 12 years of age. Programs administered by
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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.
A network of APPs contract with CDE to provide low-income and
eligible families access to subsidized child care. In
2013-14, there were 76 APPs across the state providing support
and payment services and they range from private, nonprofit
organizations to county offices of education. APPs do not
provide direct child development services or programs;
instead, they facilitate family choice by providing families
with subsidized child care vouchers. Eligible families can
include those participating in welfare-to-work activities
under the California Work Opportunities and Responsibility to
Kids (CalWORKs) program, or those who are low-income but do
not qualify for CalWORKs.
APPs are reimbursed based on the number of children served and
funds are appropriated based on the fiscal reporting process
and budget estimations. APPs began as pilot programs in 1977
and became permanent in 1980.
3)Child Care and Development Block Grant. The federal Child
Care and Development Block Grant Act of 2014 (P.L. 113-186)
reauthorized the Child Care and Development Block
Grant Act of 1990. This reauthorization brought about a
number of changes aimed at addressing health and safety
requirements, quality of care, and consumer and provider
education.
One specific change adopted by this reauthorization
establishes a 12-month eligibility redetermination period for
families, regardless of changes in income (provided income
does not exceed 85% of State median income) or temporary
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changes in participation in work, training, or education
activities.
4)Related Legislation. AB 271 (Obernolte), pending in this
Committee, allows APPs and child care providers to maintain
records electronically.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081