BILL ANALYSIS Ó SENATE COMMITTEE ON HUMAN SERVICES Senator McGuire, Chair 2015 - 2016 Regular Bill No: SB 567 ----------------------------------------------------------------- |Author: |Liu | ----------------------------------------------------------------- |----------+-----------------------+-----------+-----------------| |Version: |February 26, 2015 |Hearing |April 21, 2015 | | | |Date: | | |----------+-----------------------+-----------+-----------------| |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Mareva Brown | |: | | ----------------------------------------------------------------- Subject: Child care programs: continuity of services SUMMARY This bill would require a child who is enrolled in a state or federally funded child care program to be deemed eligible for that program for the remainder of the program year. ABSTRACT Existing law: 1) Establishes in federal law the Child Care and Developmental Block Grant (CCDBG), reauthorized in 2014 with the following purposes: a. To allow each state maximum flexibility in developing child care programs and policies that best suit the needs of children and parents within that state; b. To promote parental choice to empower working parents to make their own decisions regarding the child care services that best suit their family's needs; c. To encourage states to provide consumer education information to help parents make informed choices about child care services and to promote involvement by parents and family members in the development of their children in child care settings; SB 567 (Liu) PageB of? d. To assist states in delivering high-quality, coordinated early childhood care and education services to maximize parents' options and support parents trying to achieve independence from public assistance; e. To assist states in improving the overall quality of child care services and programs by implementing the health, safety, licensing, training, and oversight standards; f. To improve child care and development of participating children; and g. To increase the number and percentage of low-income children in high-quality child care settings." (42 USC 9801, § 658A) 2) Requires in the CCDBG that state plans demonstrate that each child who receives assistance will be considered to meet all eligibility requirements and will receive assistance for not less than 12 months before the state or designated local entity re-determines the eligibility of the child, regardless of a temporary change in the ongoing status of the child's parent as working or attending a job training or educational program, or a change in family income for the child's family, if that family income does not exceed 85 percent of the state median income for a family of the same size. (42 USC 9801, § 658E(c)(2)(N)(i)) 3) Establishes in state law the Child Care and Development Services Act and outlines its purpose to include a comprehensive, coordinated and cost-effective system of child care and development services for children from infancy to 13 years of age in an environment that is healthy and nurturing for all children, among other goals. (EDC 8200, et seq.) 4) Requires the Superintendent of Public Instruction to adopt rules and regulations on eligibility, enrollment, and priority of services. In order to be eligible for federal and state subsidized child development services, families shall meet at least one requirement in each of the following areas: The child's family is a current aid recipient, income eligible, homeless, or involved with the child protection system, and the child's family needs child care. (EDC 8263) SB 567 (Liu) PageC of? 5) Defines income eligibility to mean that a family's adjusted monthly income is at or below 70 percent of the state median income, adjusted for family size, and adjusted annually. (EDC 8263.1 (a)) For the 2014-15 fiscal year, the income eligibility limits shall be 70 percent of the state median income that was in use for the 2007-08 fiscal year, adjusted for family size. (EDC 8263.1 (e)) 6) Establishes a 12-month certification for child care providing the family continues to require child care and remains otherwise eligible. This time limit does not apply if the family's child care referral is recertified. (EDC 8263 (b)(1)(c)) 7) Requires that families be disenrolled from subsidized child care services in a specified order, with families whose incomes are above 70 percent of SMI being disenrolled first and families with the highest incomes below 70 percent of SMI being disenrolled next, unless certain factors are present, as specified. (EDC 8263.2, EDC 8263.3) 8) Requires families to notify their child care contractor within five calendar days of any changes in family income, family size or the need for services. (Title V Regulations, 18102, 18410 and 18425) 9) Permits a family enrolled in a state or federally funded child care and development program whose services would otherwise be terminated because the family no longer meets the program income, eligibility, or need criteria, to continue to receive child development services in another state or federally funded child care and development program if the contractor is able to transfer the family's enrollment to another program, as specified. (EDC 8263 (c)) This bill: 1) States Legislative intent to strategically use state and federal funds to provide a stable, comprehensive, and adequately funded early learning and educational support system for children from birth to five years of age that promotes access to safe, high-quality, part-day and SB 567 (Liu) PageD of? full-day services that support the development of the whole child, especially for those children who need it most, as defined. 2) Requires that, notwithstanding any other law, in order to promote continuity of services, subsequent to enrollment in a state or federally funded child care program, a child shall be deemed eligible for the remainder of the program year. FISCAL IMPACT This bill has not been analyzed by a fiscal committee. BACKGROUND AND DISCUSSION Purpose of the bill: According to the author, families that receive state-subsidized childcare are certified for 12 months of eligibility; however they are also required to report changes in circumstances throughout that period that can result in the loss of the care subsidy. For example, a single mother who receives a .50 raise at an hourly job can lose her entire subsidy if that raise puts her $1.00 over the income ceiling, the author states. Working 40 hours a week, a 50-cent raise equates to $20 per week, the author writes that is hardly enough to obtain childcare in the private market. The author also states that changes like this can destabilize families, create a disincentive to garner raises and interrupt the continuity of care for children. Continuity for children is one of the most important aspects of effective early learning and care programs, according to the author. She states that this bill would guarantee eligibility to families enrolled in subsidized care for the remainder of the program year, ensuring that families can make long-term plans for economic prosperity and that children receive the care necessary to thrive. Child Care The state's child care slots are means-tested for families, meaning that eligibility is predicated on families remaining at or below 70 percent of the state median income. Currently a SB 567 (Liu) PageE of? family of three loses eligibility for child care if they earn more than $42,216 annually and a family of four loses eligibility at $46,896. Concern about families whose wages fluctuate or who receive incremental increases that bump them above the eligibility threshold have been persistent both in California and nationwide. Researchers have documented that maintaining a primary caregiver relationship until a child is at least 3 years old is an important effort to support children and their families.<1> Deep reductions in child care slots and reimbursement rates during the Great Recession have left California about 16 percent fewer slots than in 2008-09. In FY 2015-16, approximately 360,000 children will receive subsidized child care funding in a variety of settings. Child Care and Development Block Grant reauthorization The federal CCDBG is the primary source of federal funding to help families pay for care. In November 2014, Congress re-authorized the block grant (S.1086) with major changes to programming requirements, including more frequent inspections, higher health and safety standards and policies to help low-income working families maintain greater stability in their child care arrangements. The new federal statute is the first comprehensive reauthorization of the original CCDBG, which was first authorized nearly 25 years ago with minimal safety and quality requirements. Deadline change The reauthorization bill mandated a state plan be submitted to the federal government by June 30, 2015, detailing how states would spend federal funds. California's 2014 state budget required the California Department of Education (CDE) to provide the revised state plan and a description of the changes to the Director of Finance and the Legislature by April 1, 2015. However correspondence from the U.S. Health and Human Services Agency's Office of Child Care in late March moved that date back by nine months, to March 1, 2016, leaving California with --------------------------- <1> "Promoting continuity of Care in Infant/Toddler Settings: What Can State/Territory Leaders Do?" National Center on Child Care professional Development Systems and Workforce Initiatives, September 2012. SB 567 (Liu) PageF of? additional planning time. Placement stability The reauthorization bill includes a requirement that every child receiving care under the CCDBG must be considered eligible for that care for not less than 12 months before the state imposes any kind of redetermination on the family, regardless of temporary changes in the parent's income or work status so long as the family income does not exceed 85 percent of the state median income. It also allows for a graduated phase-out period for parents who have exceeded income eligibility at the time of redetermination, in keeping with many state practices.<2> California's statute currently includes a 12-month eligibility period, but requires parents to report changes in income or work status, which can trigger a loss of the child care subsidy. CDE has recently sought an internal legal opinion about whether California's 12-month eligibility statute is sufficient to comply with the new federal block grant. This bill is silent on the 12-month requirement, and instead requires that a child retains eligibility to remain in the program for the remainder of the program year. The author states that this language is a step toward fulfilling the stability requirement until there is clarity around the need for legislation on the 12-month mandate. The author intends this requirement to encompass school-year programs as well as programs that run continuously and therefore may be subject to a calendar year timeline. Should the state additionally enacted legislation to satisfy the 12-month federal mandate, this bill would require that some children be maintained in a program longer than 12 months if that 12-month period does not coincide with the end of a program year. Related legislation: AB 233 (Lopez, 2015) would require that a family enrolled in a state or federally funded child care and development program to be considered eligible for services for 12 months from time of initial or annual, eligibility determination. The bill additionally would make substantial changes to the process used --------------------------- <2> Child Care Law Center, CCDBG Legislative Update, November 2014 SB 567 (Liu) PageG of? by alternative payment providers in establishing and tracking rates. SB 1123 (Liu, 2014) would have permitted providers to have choices that enable greater funding flexibility and allow services to be tailored to fit community needs including the remainder of program year eligibility. This bill died in the Assembly Appropriations Committee. SB 192 (Liu, 2014) would have recast existing child care and development statute as the Early Learning and Educational Support Act, and would require the Superintendent to develop standards for the implementation of high-quality early learning and educational support programs based on certain indicia of quality, as defined. This bill died in the Assembly appropriations committee. COMMENTS Despite the roll-back of the CCDBG state plan deadline from September 2015 to March 2016, changes still need to be considered and implemented in this Legislative session. The author states she intends this bill to be a vehicle for those necessary changes and plans to include other required changes as the bill moves forward and guidance from the federal government becomes clearer. Mandating a child remain eligible for the remainder of the program year does not explicitly align with the CCDBG requirements to make children eligible for a minimum of 12 months. The author states that the intent of this bill is to comply with the intent of the stabilization language and that if CDE's legal opinion indicates the current law does not comply with the new mandate that this bill can be changed. Staff suggests that should this bill move to the Senate Education Committee, the author consider adding a minimum 12-month requirement into this language, to comply with federal reauthorization language. Staff also recommends the author consider establishing what entity defines the duration of a program year. POSITIONS SB 567 (Liu) PageH of? Support: None. Oppose: None. -- END --