Amended in Assembly May 23, 2014

Amended in Assembly May 1, 2014

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 begin delete amend Sections 8265, 8265.5, 8266, 8266.1, and 8357 of, and to repeal Section 8265.7 of, end delete begin insert add and repeal Section 8265.2 of end insert the Education Code, relating to child care.

LEGISLATIVE COUNSEL’S DIGEST

AB 2125, as amended, Ridley-Thomas. Child care: standard reimbursement rates.

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 delete 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 delete

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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, among other things, the reimbursement rate to be based on the most recent regional market rate survey with the ceiling established at the 100th percentile in each region per unit of average daily enrollment for a 250-day year. The bill would make conforming changes.

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

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This bill would delete the requirement that the adjustment factors apply to those specified programs. The bill would also delete the adjustment factors for infants and toddlers.

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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.

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This bill would delete this provision.

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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.

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

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This bill, on or before January 1, 2016, would require the Superintendent to review the plan that establishes reasonable standards and assigned reimbursement rates and submit recommendations to the Legislature and the Governor for a single reimbursement system that reflects the actual current cost of child care based on the most recent regional market rate survey. The bill would repeal these provisions on January 1, 2017.

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

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

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begin insert SECTION 1. end insert   

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begin insert Section 8265.2 is added to the end insert begin insert Education Code end insert begin insert ,
to read: end insert

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begin insert 8265.2. end insert   

(a) On or before January 1, 2016, the Superintendent
shall review the plan that establishes reasonable standards and
assigned reimbursement rates, as established pursuant to
subdivision (a) of Section 8265, and submit recommendations to
the Legislature and the Governor for a single reimbursement
system that reflects the actual current cost of child care based on
the most recent regional market rate survey.

(b) (1) A report to be submitted pursuant to subdivision (a)
shall be submitted in compliance with Section 9795 of the
Government Code.

(2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2017.

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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,
through a single reimbursement system, 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) (1) The reimbursement rate shall be based on the most recent
regional market rate survey with the ceiling established at the 100th
percentile in each region per unit of average daily enrollment for
a 250-day year. The department may divide the weekly regional
market rate by five to obtain a daily rate.

(2) Beginning with the year of the most recent market rate
survey established pursuant to paragraph (1), as amended by this
act in the 2013-14 Regular Session of the Legislature, contractors
that are expected to receive less under the most recent regional
market rate survey than what they previously received shall instead
receive the reimbursement rate that was in effect on July 1, 2014,
until the reimbursement rate specified in paragraph (1) exceeds
that rate.

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

(d) 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.

SEC. 2.  

Section 8265.5 of the Education Code is amended to
read:

8265.5.  

(a) In order to reflect the additional expense of serving
children who meet any of the criteria outlined in paragraphs (1)
to (4), 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) Pursuant to subdivision (a), the following adjustment factors
shall apply:

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

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

(3) 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.

(4) For limited-English-speaking and non-English-speaking
children who are two 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 (4), 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 (4),
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.

SEC. 3.  

Section 8265.7 of the Education Code is repealed.

SEC. 4.  

Section 8266 of the Education Code is amended to
read:

8266.  

(a) Notwithstanding Section 8265, the assigned
reimbursement rate of a center-based child care agency (1)
contracting with the department, (2) 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 Code of Regulations, and (3) 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.

(b) (1) It 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.

(2) These 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.

SEC. 5.  

Section 8266.1 of the Education Code is amended to
read:

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
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), 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 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 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 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 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 reimbursement rate.

(d) For child care and development program providers serving
children for 10 and one-half hours or more per day, the
reimbursement factor is 118 percent of the reimbursement rate.

SEC. 6.  

Section 8357 of the Education Code is amended to
read:

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 most recent 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 law, reimbursements to child
care providers based upon a daily rate shall 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.

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