BILL ANALYSIS Ó AB 833 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 833 (Bonta) As Amended September 4, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |80-0 |(June 1, 2015) |SENATE: | 40-0 |(September 9, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: HUM. S. 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; AB 833 Page 2 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 and contractors that contract with licensed providers and centers 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)States that the plan, and requirements regarding it, shall not be construed to permit the county to change the regional market rate survey results for the county. 2)Requires the plan to be submitted to the local planning council, as specified, for approval and, upon approval, requires the Alameda County Board of Supervisors to hold at least one public hearing on the plan. Should the board vote in favor of the plan after this hearing, requires the plan to be submitted to the California Department of Education's (CDE's) Early Education and Support Division to review the plan and, within 30 days of receiving it, to approve or disapprove it. 3)Requires the Early Education and Support Division to review and either approve or disapprove any modification of the plan within 30 days of receiving it. Further specifies that the Early Education and Support Division 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 AB 833 Page 3 law. 4)Requires the county, by the end of the first fiscal year of operation under the approved child care subsidy plan, to demonstrate an increase in the aggregate days a child is enrolled in child care as compared to the enrollment in the final quarter of the 2014-15 Fiscal Year. 5)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. 6)Requires a participating contractor to receive an increase or decrease in funding that the contractor would have received had the contractor not participated in the plan. 7)Repeals the provisions of this bill as of January 1, 2021. 8)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. The Senate amendments: 1)Clarify that all funding sources utilized by contractors that contract with licensed providers and centers are eligible to be included in the county's plan. 2)Clarify that the plan, and requirements regarding it, shall not be construed to permit the county to change its regional market rate survey results. AB 833 Page 4 3)Require the plan to be submitted to the local planning council, as specified, for approval and, upon approval, require the Alameda County Board of Supervisors to hold at least one public hearing on the plan. Should the board vote in favor of the plan after this hearing, require the plan to be submitted to the CDE's Early Education and Support Division to review the plan and, within 30 days of receiving it, to approve or disapprove it. 4)Require the county, by the end of the first fiscal year of operation under the approved child care subsidy plan, to demonstrate an increase in the aggregate days a child is enrolled in child care as compared to the enrollment in the final quarter of the 2014-15 fiscal year. 5)Make other technical changes. EXISTING LAW 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. (Education Code (EDC) Sections 8347 and 8335) FISCAL EFFECT: According the Senate Appropriations Committee, this bill may result in the following costs: 1)Alameda County individualized subsidy plan: Potential loss of savings in the low millions to the extent the plan allows more of the county's funding allocation to be expended. 2)CDE indicates minor and absorbable costs to review and approve contract amendments and other related activities. AB 833 Page 5 COMMENTS: Child care in Alameda County: As of April 2015, approximately 14,000 children were 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 polled a number of providers in the county earlier this year and found that there were 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 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 AB 833 Page 6 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. 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 high numbers of 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. 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 AB 833 Page 7 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: 0002343