Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 765


Introduced by Assembly Member Ridley-Thomas

February 25, 2015


An act to amend Section 8265 of the Education Code, relating to child care and development.

LEGISLATIVE COUNSEL’S DIGEST

AB 765, as amended, Ridley-Thomas. Child care and development: reimbursement rates.

Existing law requires the Superintendent of Public Instruction to implement a plan that establishes reasonable child care standards and assigned reimbursement rates, as provided. Existing law requires the standard reimbursement rate to be increased annually by a cost-of-living adjustment, as provided.

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This bill would make nonsubstantive changes to these provisions.

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This bill would provide that the standard reimbursement rate is not intended to fund mandated costs imposed upon child development programs due to actions of law relating to minimum wage requirements, health insurance requirements, new or increased fees, new or expanded program requirements, or other cost increases due to legislative action. The bill would also require the standard reimbursement rate to be raised as needed to provide a living wage, reasonable health insurance, and retirement benefits for employees, to support the recruitment and retention of skilled and trained teachers, to support the financial stability of programs and educational quality, and to achieve gender pay equity. The bill would define cost-of-living adjustment to be, among other things, at least equal to the amount of the inflation adjustments given to K-12 education programs, as provided.

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Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P2    1begin insert

begin insertSECTION 1.end insert  

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(a) The Legislature finds and declares all of the
2following:

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3(1) Teachers in state-funded educational child development
4programs are denied living wages.

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5(2) Low wages for the predominantly female staff of these
6programs contributes significantly to the gender pay gap in
7California.

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8(3) Many nonprofit, community-based child development
9agencies are unable to provide employer-paid health insurance
10 to their employees and their families.

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11(4) There is a steady stream of both school district and nonprofit
12agencies closing their child development programs.

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13(5) The cause of these problems is an inadequate standard
14reimbursement rate for state-funded child development centers,
15due to a 34-year history of either no annual cost-of-living
16adjustment (COLA) or substandard raises. The lack of adequate
17COLAs has cut the buying power, wages, and benefits in these
18agencies by 22 percent since 1980, and has bankrupted programs.

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19(b) (1) It is the intent of the Legislature to both consistently
20provide these state-funded child development programs with annual
21cost-of-living adjustments equal to the inflation adjustments given
22to K-12 education programs, and to take additional steps to rebuild
23wages, benefits, and financial stability in these programs.

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24(2) It is the intent of the Legislature to eliminate gender pay
25inequity in wages for the predominantly female and college
26educated staff of these programs.

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27(3) It is the intent of the Legislature to ensure and enhance the
28ability of these programs for young children to meet the high
29educational standards required by state and federal law and
30regulations, and to retain skilled and trained teachers by increasing
31the standard reimbursement rate.

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P3    1

begin deleteSECTION 1.end delete
2begin insertSEC. 2.end insert  

Section 8265 of the Education Code is amended to
3read:

4

8265.  

(a) The Superintendent shall implement a plan that
5establishes reasonable standards and assigned reimbursement rates,
6which vary with the length of the program year and the hours of
7service.

8(1) Parent fees shall be used to pay reasonable and necessary
9costs for providing additional services.

10(2) When establishing standards and assigned reimbursement
11rates, the Superintendent shall confer with applicant agencies.

12(3) The reimbursement system, including standards and rates,
13shall be submitted to the Joint Legislative Budget Committee.

14(4) The Superintendent may establish any regulations he or she
15deems advisable concerning conditions of service and hours of
16enrollment for children in the programs.

17(b) begin insert(1)end insertbegin insertend insert The standard reimbursement rate shall be nine thousand
18twenty-four dollars and seventy-five cents ($9,024.75) per unit of
19average daily enrollment for a 250-day year, and commencing
20with the 2015-16 fiscal year, shall be increased by the
21cost-of-living adjustment granted by the Legislature annually
22pursuant to Section 42238.15.begin insert The standard reimbursement rate
23is not intended to fund mandated costs imposed upon child
24development programs due to actions of law relating to minimum
25wage requirements, health insurance requirements, new or
26increased fees, new or expanded program requirements, or other
27cost increases due to legislative action.end insert

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28(2) In addition to the increase in paragraph (1), the standard
29reimbursement rate shall be raised as needed to provide a living
30wage, reasonable health insurance, and retirement benefits for
31employees, to support the recruitment and retention of skilled and
32trained teachers, to support the financial stability of programs
33and educational quality, and to achieve gender pay equity.

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34(3) For purposes of this subdivision, “cost-of-living adjustment”
35means an annual increase in funding and the standard
36reimbursement rate to maintain buying power as the result of
37inflation. Notwithstanding any other law, for each fiscal year, the
38amount of cost-of-living adjustment provided by Section 42238.15
39shall at least be equal to the amount of the inflation adjustment
40provided by Section 42238.1.

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P4    1(c) The plan shall require agencies having an assigned
2reimbursement rate above the current year standard reimbursement
3rate to reduce costs on an incremental basis to achieve the standard
4reimbursement rate.

5(d) The plan shall provide for adjusting reimbursement on a
6case-by-case basis, in order to maintain service levels for agencies
7currently at a rate less than the standard reimbursement rate.
8Assigned reimbursement rates shall be increased only on the basis
9of one or more of the following:

10(1) Loss of program resources from other sources.

11(2) Need of an agency to pay the same child care rates as those
12prevailing in the local community.

13(3) Increased costs directly attributable to new or different
14regulations.

15(4) (A) Documented increased costs necessary to maintain the
16prior year’s level of service and ensure the continuation of
17threatened programs.

18(B) Child care agencies funded at the lowest rates shall be given
19first priority for increases.

20(e) The plan shall provide for expansion of child development
21programs at no more than the standard reimbursement rate for that
22fiscal year.

23(f) The Superintendent may reduce the percentage of reduction
24for a public agency that satisfies any of the following:

25(1) Serves more than 400 children.

26(2) Has in effect a collective bargaining agreement.

27(3) Has other extenuating circumstances that apply, as
28determined by the Superintendent.



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