BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 2368|
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                                   THIRD READING 


          Bill No:  AB 2368
          Author:   Gordon (D), et al.
          Amended:  4/5/16 in Assembly
          Vote:     21 

           SENATE EDUCATION COMMITTEE:  9-0, 6/15/16
           AYES:  Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan,  
            Vidak

           SENATE HUMAN SERVICES COMMITTEE:  5-0, 6/28/16
           AYES:  McGuire, Berryhill, Hancock, Liu, Nguyen

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/11/16
           AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
            
           ASSEMBLY FLOOR:  80-0, 5/31/16 - See last page for vote

           SUBJECT:   Child care and development services:  individualized  
                     county child care subsidy plan:  County of Santa  
                     Clara


          SOURCE:    Author


          DIGEST:  This bill authorizes the County of Santa Clara to  
          establish a 5-year pilot program for purposes of developing and  
          implementing an individualized county child care subsidy plan  
          that meets the particular needs of families in the county.


          ANALYSIS:  









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          Existing law:

          1)Establishes the Child Care and Developmental 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  
            including a full range of supervision, health, and support  
            services through full- and part-time programs.  (Education  
            Code § 8200, et seq.)
            
          2)States legislative intent that all families have access to  
            child care and development services, regardless of demographic  
            background or special needs, 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, among other things.  (EC  
            § 8202)

          3)Establishes several programs providing subsidized child care  
            and development services that service low-income families who  
            are working, seeking work, in training, or providing community  
            service. These programs are administered by the California  
            Department of Education (CDE) and require the Superintendent  
            of Public Instruction (SPI) to adopt rules and regulations on  
            eligibility, enrollment, family fees, provider rates, and  
            priority services.  (EC § 8235 and 8263)

          4)Authorizes a pilot project in, Alameda (since 2015), San Mateo  
            County (since 2004) and San Francisco City and County (since  
            2006) that allows the counties to develop and implement an  
            individualized county child care subsidy plan in recognition  
            of the high-cost of living in those counties.  (EC § 8335, §  
            8340 and § 8347)

          This bill:

          1)Authorizes the County of Santa Clara to establish a 5-year  
            pilot program for purposes of developing and implementing an  
            individualized county child care subsidy plan that meets the  
            particular needs of families in the county, as specified, to  
            include the following: 

             a)   An assessment to identify the county's goal for its  







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               subsidized child care system, as specified.

             b)   A local policy to eliminate state-imposed regulatory  
               barriers that constrain the county from meeting its desired  
               outcomes for subsidized child care, as specified. 

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

             d)   Measurable outcomes to evaluate the success of the plan  
               in achieving county and state child care goals.

          2)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.

          3)Requires the plan to be submitted to the specified local  
            planning council, and upon approval the county board of  
            supervisors shall do all of the following:

             a)   Hold at least one public hearing before voting on the  
               plan.

             b)   Submit an approved plan to Early Education and Support  
               Division (EESD) or review provided that board votes in its  
               favor. 

          4)Requires the CDE's EESD to review and either approve or  
            disapprove any modification of the plan within 30 days of  
            receiving it. Specifies that the EESD 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. 

          5)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 2015-16 Fiscal Year.

          6)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 the  







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            CDE each year. 

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

          8)Makes various legislative findings and declarations related to  
            the unique circumstances in the County of Santa Clara that  
            condition a special law including the high-cost of living. 

          9)Sunsets the provisions of this bill on January 1, 2022. 





          Comments
          
          1)Need for the bill. According to the author, families seeking  
            quality child care are adversely affected by the high cost of  
            living in Santa Clara County. The author notes that families  
            who earn just enough to meet housing costs are deemed  
            ineligible for subsidized child care, at the same time  
            agencies receiving insufficient state reimbursement rates are  
            unable to cover programing and operational costs.  As a  
            result, child care subsidy funds allocated to the county are  
            not fully expended thereby reducing access to quality child  
            care.  This bill seeks to maximize state allocated funding and  
            efficiently use child care subsidy funds to meet local  
            conditions.

          2)Provider Reimbursement Rates.  California has established two  
            methodologies for determining the reimbursement rates for  
            child care and development services:

             a)   The Regional Market Rate (RMR) is determined by the RMR  
               survey and varies depending on the geographical location of  
               the provider. In Santa Clara, for example, the full-time  
               daily RMR for a preschool-aged child in a child care center  
               is $69.77.  The RMR is based on a survey of licensed  
               centers and family child care homes measuring child care  
               rates of similar socio-economic conditions.  Rate ceilings  
               are established for each county according to estimates of  
               the 85th percentile of rates for the various types of child  







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               care settings. The county rate ceilings are differentiated  
               by the age of the child (infant, preschool, school age),  
               full-day or part-day care, and frequency of care (days per  
               week).  Families may choose a child care provider that  
               charges a rate above the RMR, but the provider would only  
               be reimbursed at the RMR.  Current law requires the RMR  
               survey to be updated every two years. The Budget Act of  
               2014 based the RMR on the 2009 survey, thereby providing a  
               lower rate than if based on the most recent survey. 

             b)   Standard Reimbursement Rate (SRR).  Child care and  
               development providers that contract directly with the  
               California Department of Education (CDE) must meet Title 5  
               requirements in addition to those of Title 22 (have units  
               in Early Childhood Education, provide an educational  
               component to child care).  Title 5 providers are reimbursed  
               using the SRR, which is a specific rate established in  
               statute. The SRR is $38.29 per child per day for full-day  
               care, or a maximum of $9,572 per year based on 250 days of  
               operation.  

          3)Why Santa Clara County? Santa Clara County serves  
            approximately 12,600 children in state subsidized child care  
            programs.  According to Santa Clara's County's local Early  
            Education Planning council, approximately $9.3 million under  
            the Title 5 state subsidized child care contracts has been  
            returned to the state. Roughly translating to 1,100 children  
            who could have been served by the county.

            The cost of living in Santa Clara is reported to be well above  
            the state median.  In 2014, for a family of four in Santa  
            Clara County it is estimated that a family have a  
            self-sufficiency hourly wage of $22.61 and $95,508 annually.  
            The median household annual income for the county is $91,142  
            as compared to state median of about $61,933 per year. To be  
            eligible for subsidized child care and services the state  
            requires a family's adjusted monthly income to be at or below  
            70% of the state median income about $42,000 per year for a  
            family of three. This bill does not change the total amount of  
            fund allocated to the count for subsidized child care. This  
            bill seeks to provide Santa Clara County limited local  
            flexibility to assess and address local conditions of working  
            families in the county through a child care subsidy pilot  
            plan.  







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          4)Other pilot programs. Current law has authorized three other  
            Bay Area pilot projects in recognition of the high-cost of  
            living in those counties. As many have noted, given that there  
            are other high-cost counties in the state dealing with similar  
            subsidized child care needs the state may want to a more  
            comprehensive approach to addressing these issues.  

          Related/Prior Legislation 

          AB 833 (Bonta, Chapter 563, Statutes of 2015), similar to this  
          bill, authorized Alameda County to develop and implement, as a  
          pilot project, an individualized county child care subsidy plan.  
          This Committee heard and approved AB 833, by a vote of 9-0. 
          
          AB 260 (Gordon, Chapter 731, Statutes of 2013) extended the  
          sunset dates of the San Francisco and San Mateo County  
          individualized county child care subsidy plans to 2016 and 2018,  
          respectively. This Committee heard and approved AB 260, by a  
          vote of 9-0.

          The sunset date of the San Francisco plan has been extended  
          three times as follows: AB 86 (Committee on Budget, Chapter 48,  
          Statutes of 2013), SB 1016 (Committee on Budget and Fiscal  
          Review, Chapter 38, Statutes of 2012), AB 1610 (Committee on  
          Budget, Chapter 724, Statutes of 2010).


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Committee on Appropriation, this bill  
          would impose the following costs:


           Potentially significant loss in savings to the state due to  
            Santa Clara County being able to spend more of its allocation  
            under an individualized county child care subsidy plan.  The  
            plan is allowed to supersede state law in specific areas which  
            would allow greater access to services within the county.   
            Without this bill these savings could otherwise be  
            redistributed for services in other counties.  See staff  
            comments.  (General Fund/Proposition 98)







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           The CDE estimates that this bill will result in initial costs  
            to the CDE of $130,000 for the first year and $95,000 ongoing  
            costs for work across several positions to review and monitor  
            the new plan.  This estimate also includes travel costs.   
            Costs are expected to decrease over time.  (General Fund)


          SUPPORT:   (Verified8/11/16)


          Bay Area Council
          California Association for the Education of Young Children 
          California Child Care Coordinators Association 
          California Head Start Association 
          Campbell Union School District 
          Child Development Incorporated 
          Community Child Care Council of Santa Clara County, Inc.
          Congregation Beth Am
          Early Edge California 
          Educare California at Silicon Valley
          First 5 San Mateo County 
          First 5 Santa Clara County 
          Gilroy Unified School District State Preschool 
          Go Kids, Inc. 
          Kindango
          Leagues of Women Voters of Santa Clara County
          Local Early Education Planning Council of Santa Clara County 
          Mountain View Wishman
          San Francisco Child Care Planning and Advisory Council 
          San Francisco SRR Initiative
          San Mateo County Office of Education 
          Santa Clara County Board of Supervisors 
          Santa Clara County Office of Education 
          SJB Child Development Centers 


          OPPOSITION:   (Verified8/11/16)


          None received

          ASSEMBLY FLOOR:  80-0, 5/31/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  







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                                                                    Page  8


            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth  
            Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

          Prepared by:Olgalilia Ramirez / ED. / (916) 651-4105
          8/15/16 19:39:51


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