BILL ANALYSIS                                                                                                                                                                                                    



                                                                       AB 833


                                                                      Page  1





          ASSEMBLY THIRD READING


          AB  
          833 (Bonta)


          As Amended  April 22, 2015


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes |Ayes                |Noes                 |
          |                |      |                    |                     |
          |                |      |                    |                     |
          |----------------+------+--------------------+---------------------|
          |Human Services  |7-0   |Chu, Mayes,         |                     |
          |                |      |Calderon, Lopez,    |                     |
          |                |      |Maienschein,        |                     |
          |                |      |                    |                     |
          |                |      |                    |                     |
          |                |      |Mark Stone,         |                     |
          |                |      |Thurmond            |                     |
          |                |      |                    |                     |
          |----------------+------+--------------------+---------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,     |                     |
          |                |      |Bonta, Calderon,    |                     |
          |                |      |Chang, Daly,        |                     |
          |                |      |Eggman, Gallagher,  |                     |
          |                |      |                    |                     |
          |                |      |                    |                     |
          |                |      |Eduardo Garcia,     |                     |
          |                |      |Gordon, Holden,     |                     |
          |                |      |Jones, Quirk,       |                     |
          |                |      |Rendon, Wagner,     |                     |
          |                |      |Weber, Wood         |                     |
          |                |      |                    |                     |








                                                                       AB 833


                                                                      Page  2





          |                |      |                    |                     |
           ------------------------------------------------------------------ 


          SUMMARY:  Establishes a subsidized child care pilot program in  
          Alameda County.  Specifically, this bill:  


          1)States Legislative intent to build a stable, comprehensive, and  
            adequately funded high-quality early learning and educational  
            support system.


          2)Permits Alameda County to develop and implement an  
            individualized county child care subsidy plan, as specified, to  
            include the following:


             a)   An assessment to identify the county's goal for its  
               subsidized child care system, as specified;


             b)   Development of a local policy to eliminate state-imposed  
               regulatory barriers to the county's achievement of its  
               desired outcomes for subsidized child care, as specified;


             c)   Recognition that all funding sources utilized by direct  
               child care service contractors in the county are eligible to  
               be included in the county's plan; and


             d)   Establishment of measurable outcomes to evaluate the  
               success of the plan to achieve the county's child care goals  
               and to overcome any barriers identified in the state's child  
               care subsidy plan.


          1)Requires the California Department of Education's (CDE) Child  








                                                                       AB 833


                                                                      Page  3





            Development Division (CDD) to review and either approve or  
            disapprove any modification of the plan within 30 days of  
            receiving it.  Further specifies that CDD may only disapprove  
            those portions of the plan that are not in conformance with the  
            provisions of this bill or that are in conflict with federal  
            law.


          2)Requires the county to prepare and submit a report summarizing  
            the success of the county's plan, as specified, to the  
            Legislature, the Department of Social Services (DSS), and CDE  
            each year.


          3)Requires a participating contractor to receive any increase or  
            decrease in funding that the contractor would have received had  
            the contractor not participated in the plan.


          4)Repeals the provisions of this bill as of January 1, 2021.


          5)Declares legislative findings that a special law is necessary  
            and that a general law cannot be made applicable because of the  
            unique circumstances in Alameda County, as specified.


          EXISTING LAW:  


          1)Establishes the Child Care and Development Services Act to  
            provide child care and development services as part of a  
            coordinated, comprehensive, and cost-effective system serving  
            children from birth to 13 years old and their parents, and  
            including a full range of supervision, health, and support  
            services through full- and part-time programs.  (Education Code  
            (EDC) Section 8200 et seq.)










                                                                       AB 833


                                                                      Page  4





          2)States the intent of the Legislature that all families have  
            access to child care and development services, through resource  
            and referral where appropriate, and regardless of demographic  
            background or special needs, and that families are provided the  
            opportunity to attain financial stability through employment,  
            while maximizing growth and development of their children, and  
            enhancing their parenting skills through participation in child  
            care and development programs.  (EDC Section 8202)


          3)Requires the Superintendent of Public Instruction to adopt rules  
            and regulations regarding eligibility, enrollment, and priority  
            of services.  (EDC Section 8263) 


          4)Requires the Superintendent to adopt rules, regulations, and  
            guidelines to facilitate funding and reimbursement procedures  
            for subsidized child care.  (EDC Section 8269)


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


          6)Establishes the San Mateo County and San Francisco  
            individualized county child care subsidy plan pilot projects and  
            provides for them to sunset in 2016 and 2018, respectively.   
            (EDC Sections 8347 and 8335)


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill will allow Alameda County to retain unspent  
          child care funds that otherwise would revert to the General Fund  
          (GF).  Between 2011-12 and 2013-14, the County was unable to spend  
          approximately 5% of its contracted amounts each year, and returned  
          over $10 million in unspent child care funding to the State.  That  
          funding is a combination of GF, Proposition 98 (1988) funding and  
          federal funds.  Historically, such reversions have been  








                                                                       AB 833


                                                                      Page  5





          redistributed for child care purposes in subsequent budget years.


          COMMENTS:  


          Subsidized child care:  California offers subsidized child care to  
          parents participating in CalWORKs and to families transitioning  
          off of and no longer receiving aid.  CDE also administers  
          non-CalWORKs child care.  The largest programs are:  General Child  
          Care, which includes contracted centers and family child care  
          homes; the California State Preschool Program, which includes  
          contracted centers and family child care homes for three- and  
          four-year olds; and Alternative Payment Programs (APPs), which  
          provide vouchers that can be used to obtain child care in a  
          center, family child care home, or from a license-exempt provider.  
           Waitlists for non-CalWORKs child care are common.  Across the  
          various subsidized child care programs, there are estimated to be  
          over 205,000 slots (not including State Preschool).  State  
          Preschool contains close to 150,000 additional slots.


          Contracted providers are funded through the receipt of the  
          Standard Reimbursement Rate (SRR) based on the number of children  
          enrolled and the hours of care provided.  Families may also be  
          required to pay a family fee if they earn above a certain  
          threshold income for their family size.  The current SRR is $36.10  
          per child for a full day of care.  Adjustment factors are applied  
          to the SRR in some instances to reflect the increased cost of care  
          for the different ages and needs of children.


          The Regional Market Rate survey calculates the market rates for  
          child care in each of California's 58 counties and uses these to  
          establish maximum child care reimbursement rates for child care  
          services for families in various APP or other voucher child care  
          programs. States are required to conduct a market rate survey  
          every two years, but are not required to use the most recent  
          survey to set rates.  Reimbursement rates for licensed providers  








                                                                       AB 833


                                                                      Page  6





          accepting vouchers are currently set at the 85th percentile of the  
          2009 RMR survey less 10.11%.  License-exempt providers are  
          reimbursed at 60% of the Family Child Care Home ceilings.  In  
          Santa Clara County, for example, the full-time daily RMR for a  
          preschool-age child in a child care center is $66.77.  For that  
          same child in a family child care home, the RMR is $55.39, and  
          with a license-exempt provider, the RMR is $33.23.


          Families are typically eligible for subsidized child care if their  
          income is less than 70% of the 2007-08 State Median Income (about  
          $42,000 per year for a family of 3), if the parents have a need  
          related to work, training, or education, and if the children are  
          up to 12 years old (or 21 years old for youth with exceptional  
          needs). 


          Child care in Alameda County:  14,206 children are served by  
          subsidized child care programs in Alameda County (note that these  
          data do not include the number of children in CalWORKs Stage 1  
          child care).  While Alameda County does not have a centralized  
          eligibility list that provides an exact number of children  
          wait-listed for subsidized child care, the Alameda County Early  
          Care and Education Planning Council has polled a number of  
          providers in the county and found that there are over 9,750  
          children on their waitlists.  This indicates that there are likely  
          well over 10,000 children in the county who are eligible for, but  
          unable to access slots in, local subsidized child care programs.  
          One study found that, during the period of 2011-12 to 2013-14,  
          Alameda County lost 22% of its subsidized child care contractors.   



          San Mateo County and San Francisco pilot programs:  AB 1326  
          (Simitian), Chapter 691, Statutes of 2003, established the San  
          Mateo County individualized county child care subsidy plan pilot  
          project and SB 701 (Migden), Chapter 725, Statutes of 2005,  
          established the San Francisco individualized county child care  
          subsidy plan pilot project.  Both pilots were developed to address  








                                                                       AB 833


                                                                      Page  7





          two significant issues facing subsidized child care in high-cost  
          counties:  1) that low-income families earning just enough to  
          afford housing in a high-cost area may be deemed to earn too much  
          to qualify for assistance with child care by statewide eligibility  
          standards, and 2) that the statewide SRR paid to contracted child  
          care centers and family child care homes is often not sufficient  
          to cover program costs and overhead, particularly in high-cost  
          areas.  Both counties would see a portion of their child care  
          subsidy funds go unused as low-income families failed to qualify  
          for eligibility by uniform statewide criteria, and as provider  
          reimbursement rates made offering subsidized care untenable for  
          some providers.


          San Mateo County's and San Francisco's pilot programs, still in  
          operation today, offer them the limited local flexibility to  
          revise eligibility rules and adjust provider rates and family fees  
          within the context of local evaluation and assessment and  
          heightened state oversight.  Thus, the counties are able to  
          reinvest otherwise-unused funds through increased reimbursement  
          rates.  Both San Mateo County and San Francisco are also allowed  
          flexibility regarding eligibility rules.  San Mateo County and San  
          Francisco currently set their eligibility income thresholds at 80%  
          of the current State Median Income, compared to 70% as the state  
          does. 


          Evaluation results for both counties have indicated a number of  
          successes, including increases in the number of aggregate days of  
          enrollment in subsidized child care and decreases in the amount of  
          unspent child care funds returned to the state.


          Need for this bill:  With close to 10,000 children waitlisted for  
          subsidized child care, and difficulties retaining contractors,  
          Alameda County may be a good candidate for an individualized  
          county child care subsidy plan like those seen in San Mateo County  
          and San Francisco.









                                                                       AB 833


                                                                      Page  8






          According to the author: 


            In Alameda County, many children and families are unable to  
            access quality child care in part by the unintended  
            consequences of living in a high cost county.  Since many  
            families are deemed ineligible due to the high cost of  
            living and provider reimbursement rates are insufficient to  
            cover the cost of care, child care subsidy funds allocated  
            to Alameda County are not fully expended.


            [This bill] provides Alameda County limited local  
            flexibility with increased state oversight to address the  
            fiscal reality of high-cost counties, where the cost of  
            living and doing business is well beyond the state median.   
            With the ability to revise their eligibility and need  
            determinations, adjust their reimbursement rates and family  
            fees based upon a local evaluation and assessment, and  
            modify their funding requirements, Alameda County will be  
            able to maximize allocated funding and efficiently use  
            child care subsidy funds to meet local conditions.  As a  
            result, more children can be served with quality child  
            care.




          Analysis Prepared by:                                               
                          Daphne Hunt / HUM. S. / (916) 319-2089  FN:  
          0000609















                                                                       AB 833


                                                                      Page  9