BILL ANALYSIS
AB 932
Page 1
Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 932 (Torlakson) - As Amended: April 27, 2009
Policy Committee: Education
Vote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill expands the purposes of the Child Care Facilities
Revolving Loan (CCFRL) Fund to authorize funds to be used for
purchase, site development, construction, and expansion of
licensed child care facilities, as specified. This measure also
specifies that the one of the CCFRL Fund's purposes is loan
administration. Specifically, this bill:
1)Authorizes all licensed child care facilities to access the
CCFRL Fund.
2)Authorizes the Superintendent of Public Instruction (SPI) to
transfer federal funds into the CCFRL Fund and requires the
deposits derived from the loan repayments to be deposited into
the fund, as specified.
3)Requires the State Department of Education (SDE) to utilize
the capital financing expertise of the child care financial
intermediary (established under current law to aid child care
facilities) to administer the CCFRL Fund. This measure also
requires the SDE to adopt regulations to establish priorities,
forms, policies, and procedures for implementing and managing
the fund.
4)Requires a child care financial intermediary to provide
capital financing and facility development expertise and
assistance to the CCFRL Fund process, as specified.
FISCAL EFFECT
Unknown, indeterminate, GF/98 cost pressure, likely in the
AB 932
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hundreds of thousands to low millions of dollars, to expand the
purpose of the CCFRL Fund to include the construction of
facilities, as specified.
COMMENTS
1)Rationale . The intent of this bill is:
According to the author, "Unfortunately, the CCFRL Fund has been
underutilized for the past several years due to the complex and
specialized expertise required to make loans for development
projects, other than relocatable buildings primarily on public
school sites. Child care and development contractors operate
care and education programs in all different types of
facilities. By enhancing the capital financing capacity of the
fund, the program will be better equipped to meet the facility
development needs of eligible borrowers. There will also be
enhanced capacity and support for low-income child care
providers to access financing. Additionally, the financial
intermediary will increase the efficiency and effectiveness of
existing state resources and provide more opportunities to
leverage public and private capital."
2)CCFRL Background . AB 1578 (Migden), Chapter 299, Statutes of
1997, established the CCFRL Fund. The fund is a
lease-purchase program that provides funding to eligible SDE
child care and development contracting agencies for the
acquisition of relocatable buildings.
Child care agencies may apply for up to $210,000 for each
single, free-standing relocatable building (basic building
consisting of three 12-by-40 foot modules) and up to $70,000
maximum for each additional module added to the basic
building. Eligible program costs include building expenses,
architect and inspection fees, site development, and site
improvement costs.
Approved applications are funded in two phases: (a) the
initial funding at 60% and (b) the final funding at 40%. The
CCFR Fund contracting agencies begin making lease repayments
to the SDE 180 days after the final funding has been released.
Payments are amortized over 10 years without interest. Upon
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full repayment, facility title transfers from the State of
California to the CCFR Fund contracting agencies.
Statute limits access to the CCFRL Fund to only existing
contracting agencies that provide CDE subsidized child care
program services. These include the following programs: (a)
general child care and development; (b) state preschool; (c)
migrant child care and development; (d) School Age Community
Child Care Services (Latchkey); and (e) child care and
development services for children with special needs.
3)CCFRL Fund is underutilized . According to the Legislative
Analyst Office (LAO) 2007-08 Budget Analysis, "The CCFRL Fund
has consistently carried a healthy balance over recent years.
The fund balance so routinely exceeds demand that the
Legislature has reverted funds from the CCFRL Fund to support
other K-12 programs four times since 2002-for a total
reversion of $93.2 million." These funds have been utilized
to provide child care direct services or for the child care
repair and renovation program.
According to SDE, 617 applications have been approved for
funding from the CCFRL Fund, providing potential capacity for
24,490 children. Local education agencies (LEAs) comprise the
majority of the participants in the fund, while private child
care providers comprise 30.7% of the total. The largest group
to be served through the fund is preschool children. The most
frequently cited reason for request of funds was child care
program expansion, followed by replacement of facilities for
health and safety reasons. The CCFRL Fund is expected to have
approximately $3 million available at the end of the 2009-10
FY.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081