Amended in Assembly April 10, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2125

Introduced by Assembly Member Ridley-Thomas

February 20, 2014

An act to amend begin delete Section end delete begin insert Sections end insert 8265 begin insert , 8265.5, 8266, 8266.1, and 8357 of, and to repeal Section 8265.7 end insert of begin insert , end insert the Education Code, relating to child care.

LEGISLATIVE COUNSEL’S DIGEST

AB 2125, as amended, Ridley-Thomas. Child care: standard reimbursement begin delete rate: adjustment. end delete begin insert rates. end insert

Existing law establishes a system of child care and development services for children from infancy to 13 years of age and provides certain requirements for the payment by the state for these child care and development services. Existing law requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates, as provided, and requires the standard reimbursement rate to be $3,523 per unit of average daily enrollment for a 250-day year, increased by the cost-of-living adjustment granted by the Legislature. begin insert Existing law requires the plan to require agencies having an assigned reimbursement rate above the current year standard reimbursement rate to reduce costs on an incremental basis to achieve the standard rate and requires the plan to provide for adjusting reimbursements on a case-by-case basis, as provided. end insert

begin delete

This bill would add an authorization to adjust that standard reimbursement rate to provide adequate compensation for education and training.

end delete begin insert

This bill would delete these requirements relating to assigned reimbursement rates and reimbursement adjustments. The bill would delete references to the standard reimbursement rate and instead would require the reimbursement rate to reflect the actual current cost of care in each region per unit of average daily enrollment for a 250-day year. The bill would make conforming changes.

end insert begin insert

Existing law applies various adjustment factors to specified programs for which reimbursement rates are at or below the standard reimbursement rate, as provided.

end insert begin insert

This bill would delete the requirement that the adjustment factors apply to those specified programs.

end insert begin insert

Existing law authorizes programs above the standard reimbursement rate to be considered on a case-by-case basis for rate adjustments due to documented increases in insurance costs.

end insert begin insert

This bill would delete this provision.

end insert begin insert

Existing law requires the cost of child care services provided to CalWORKs recipients to be governed by regional market rates. Existing law requires regional market rate ceilings to be established at the 85th percentile of the 2005 regional market rate survey for that region.

end insert begin insert

This bill would instead establish the market rate ceiling at the 85th percentile of the current regional market rate survey for that region.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 8265 of the Education Code is amended
to read:

8265.  

(a) The Superintendent shall implement a plan that
establishes reasonable standards and assigned reimbursement rates,
begin insert through a single reimbursement system, end insert which vary with the length
of the program year and the hours of service.

(1) Parent fees shall be used to pay reasonable and necessary
costs for providing additional services.

(2) When establishing standards and assigned reimbursement
rates, the Superintendent shall confer with applicant agencies.

(3) The reimbursement system, including standards and rates,
shall be submitted to the Joint Legislative Budget Committee.

(4) The Superintendent may establish any regulations he or she
deems advisable concerning conditions of service and hours of
enrollment for children in the programs.

(b) The begin delete standard end delete reimbursement rate shall begin delete be three thousand
five hundred twenty-three dollars ($3,523) end delete begin insert reflect the actual current
cost of care in each region end insert per unit of average daily enrollment
for a 250-day begin delete year, increased by the cost-of-living adjustment
granted by the Legislature beginning July 1, 1980, or as adjusted
to provide adequate compensation for education and training. end delete begin insert year. end insert

begin delete

(c) The plan shall require agencies having an assigned
reimbursement rate above the current year standard reimbursement
rate to reduce costs on an incremental basis to achieve the standard
reimbursement rate.

(d) (1) The plan shall provide for adjusting reimbursement on
a case-by-case basis, in order to maintain service levels for agencies
currently at a rate less than the standard reimbursement rate.
Assigned reimbursement rates shall be increased only on the basis
of one or more of the following:

(A) Loss of program resources from other sources.

(B) Need of an agency to pay the same child care rates as those
prevailing in the local community.

(C) Increased costs directly attributable to new or different
regulations.

(D) Documented increased costs necessary to maintain the prior
year’s level of service and ensure the continuation of threatened
programs.

(2) Child care agencies funded at the lowest rates shall be given
first priority for increases.

(e)

end delete

begin insert (c) end insert  The plan shall provide for expansion of child development
programs at no more than the begin delete standard end delete reimbursement rate for that
fiscal year.

begin delete

(f)

end delete

begin insert (d) end insert  The Superintendent may reduce the percentage of reduction
for a public agency that satisfies any of the following:

(1) Serves more than 400 children.

(2) Has in effect a collective bargaining agreement.

(3) Has other extenuating circumstances that apply, as
determined by the Superintendent.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 8265.5 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

8265.5.  

(a) In order to reflect the additional expense of serving
children who meet any of the criteria outlined in paragraphs (1)
to (7), inclusive, of subdivision (b) the provider agency’s reported
child days of enrollment for these children shall be multiplied by
the adjustment factors listed below.

(b)  begin delete The end delete begin insert Pursuant to subdivision (a), the following end insert adjustment
factors shall begin delete apply to those programs for which assigned
reimbursement rates are at or below the standard reimbursement
rate. In addition, the adjustment factors shall apply to those
programs for which assigned reimbursement rates are above the
standard reimbursement rate, but the reimbursement rate, as
adjusted, shall not exceed the adjusted standard reimbursement
rate. end delete begin insert apply: end insert

(1) For infants who are 0 to 18 months of age and are served in
a child day care center, the adjustment factor shall be 1.7.

(2) For toddlers who are 18 to 36 months of age and are served
in a child day care center, the adjustment factor shall be 1.4.

(3) For infants and toddlers who are 0 to 36 months of age and
are served in a family child care home, the adjustment factor shall
be 1.4.

(4) For children with exceptional needs who are 0 to 21 years
of age, the adjustment factor shall be 1.2.

(5) For severely disabled children who are 0 to 21 years of age,
the adjustment factor shall be 1.5.

(6) For a child at risk of neglect, abuse, or exploitation who are
0 to 14 years of age, the adjustment factor shall be 1.1.

(7) For limited-English-speaking and non-English-speaking
children who are 2 years of age through kindergarten age, the
adjustment factor shall be 1.1.

(c) Use of the adjustment factors shall not increase the provider
agency’s total annual allocation.

(d) Days of enrollment for children having more than one of
the criteria outlined in paragraphs (1) to (7), inclusive, of
subdivision (b) shall not be reported under more than one of the
above categories.

(e) The difference between the reimbursement resulting from
the use of the adjustment factors outlined in paragraphs (1) to (7),
inclusive, of subdivision (b) and the reimbursement that would
otherwise be received by a provider in the absence of the
adjustment factors shall be used for special and appropriate services
for each child for whom an adjustment factor is claimed.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 8265.7 of the end insert begin insert Education Code end insert begin insert is repealed. end insert

begin delete

8265.7.  

Notwithstanding Section 8265, programs above the
standard reimbursement rate may be considered on a case-by-case
basis for rate adjustments due to documented increases in insurance
costs.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 8266 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

8266.  

begin insert (a) end insert begin insert   end insert Notwithstanding begin delete the provisions of end delete Section 8265, the
assigned reimbursement rate of a center-based child care agency
begin delete (a) end delete begin insert (1) end insert contracting with the begin delete Department of Education, (b) end delete
begin insert department, (2) end insert operating under licensing standards for child care
and development facilities specified by Section 1500 et seq. of the
Health and Safety Code and by Title 22 of the California
begin delete Administrative Code, end delete begin insert Code of Regulations, end insert and begin delete (c) end delete begin insert (3) end insert with less
than a majority of subsidized children enrolled in the facility, shall
be equivalent to the fee paid for the same service by families of
nonsubsidized children.

begin delete

It

end delete

begin insert (b) end insert begin insert   end insert begin insert (1) end insert begin insert   end insert begin insert It end insert is not the intent of the Legislature to preclude an
agency with a contract with the department from adjusting the fees
charged to nonsubsidized children during the contract year. begin delete In no
event shall the assigned reimbursement rate exceed the standard
reimbursement rate established pursuant to Section 8265. end delete

begin delete

These

end delete

begin insert (2) end insert begin insert   end insert begin insert These end insert agencies shall provide documentation to the
department that subsidized children, as necessary and appropriate,
shall receive supportive services through county welfare
departments, resource and referral programs, or other existing
community resources, or all of them.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 8266.1 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

8266.1.  

Commencing with the 1995-96 fiscal year and each
fiscal year thereafter, for the purposes of this chapter,
reimbursement rates shall be adjusted by the following
reimbursement factors for child care and development programs
begin delete with a standard reimbursement rate, end delete but shall not apply to the
Resource and Referral Programs set forth in Article 2 (commencing
with Section 8210), the Alternative Payment Programs set forth
in Article 3 (commencing with Section 8220), the part-day
California state preschool programs set forth in Article 7
(commencing with Section 8235), begin delete the schoolage community child
care services programs set forth in Article 22 (commencing with
Section 8460), end delete or to the schoolage parent and infant development
programs:

(a) For child care and development providers serving children
for less than four hours per day, the reimbursement factor is 55
percent of the begin delete standard end delete reimbursement rate.

(b) For child care and development program providers serving
children for not less than four hours per day, and less than six and
one-half hours per day, the reimbursement factor is 75 percent of
the begin delete standard end delete reimbursement rate. For providers operating under
the At Risk Child Care Program set forth in Article 15.5
(commencing with Section 8350) and serving children for not less
than four hours per day, and less than seven hours per day, the
reimbursement factor is 75 percent of the begin delete standard end delete reimbursement
rate.

(c) For child care and development program providers serving
children for not less than six and one-half hours per day, and less
than 10 and one-half hours per day, the reimbursement factor is
100 percent of the begin delete standard end delete reimbursement rate. For providers
operating under the At Risk Child Care Program set forth in Article
15.5 (commencing with Section 8350) and serving children for
not less than seven hours per day, and less than 10 hours per day,
the reimbursement factor is 100 percent of the begin delete standard end delete
reimbursement rate.

(d) For child care and development program providers serving
children for 101⁄2 hours or more per day, the reimbursement factor
is 118 percent of the begin delete standard end delete reimbursement rate.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 8357 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

8357.  

(a) The cost of child care services provided under this
article shall be governed by regional market rates. Recipients of
child care services provided pursuant to this article shall be allowed
to choose the child care services of licensed child care providers
or child care providers who are, by law, not required to be licensed,
and the cost of that child care shall be reimbursed by counties or
agencies that contract with the State Department of Education if
the cost is within the regional market rate. For purposes of this
section, “regional market rate” means care costing no more than
1.5 market standard deviations above the mean cost of care for
that region. The regional market rate ceilings shall be established
at the 85th percentile of the begin delete 2005 end delete begin insert current end insert regional market rate
survey for that region.

(b) Reimbursement to license-exempt child care providers shall
not exceed 60 percent of the family child care home rate established
pursuant to subdivision (a), effective July 1, 2011.

(c) Reimbursement to child care providers shall not exceed the
fee charged to private clients for the same service.

(d) Reimbursement shall not be made for child care services
when care is provided by parents, legal guardians, or members of
the assistance unit.

(e) A child care provider located on an Indian reservation or
rancheria and exempted from state licensing requirements shall
meet applicable tribal standards.

(f) For purposes of this section, “reimbursement” means a direct
payment to the provider of child care services, including
license-exempt providers. If care is provided in the home of the
recipient, payment may be made to the parent as the employer,
and the parent shall be informed of his or her concomitant legal
and financial reporting requirements. To allow time for the
development of the administrative systems necessary to issue direct
payments to providers, for a period not to exceed six months from
the effective date of this article, a county or an alternative payment
agency contracting with the State Department of Education may
reimburse the cost of child care services through a direct payment
to a recipient of aid rather than to the child care provider.

(g) Counties and alternative payment programs shall not be
bound by the rate limits described in subdivision (a) when there
are, in the region, no more than two child care providers of the
type needed by the recipient of child care services provided under
this article.

(h) Notwithstanding any other begin delete provision of end delete law, reimbursements
to child care providers based upon a daily rate begin delete may end delete begin insert shall end insert only be
authorized under either of the following circumstances:

(1) A family has an unscheduled but documented need of six
hours or more per occurrence, such as the parent’s need to work
on a regularly scheduled day off, that exceeds the certified need
for child care.

(2) A family has a documented need of six hours or more per
day that exceeds no more than 14 days per month. In no event shall
reimbursements to a provider based on the daily rate over one
month’s time exceed the provider’s equivalent full-time monthly
rate or applicable monthly ceiling.

(3) This subdivision shall not limit providers from being
reimbursed for services using a weekly or monthly rate, pursuant
to subdivision (c) of Section 8222.