BILL ANALYSIS �
AB 2302
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2302 (Mullin) - As Amended: May 1, 2014
Policy Committee: EducationVote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes the term of a loan provided under the Child
Care Facilities Revolving Fund (CCFRF) to be 10 years or a
different term as established by regulations. Specifically,
this bill:
1)Requires CDE to adopt regulations to establish priorities,
forms, policies, and procedures for implementing and managing
the CCFRF that set expansion of capacity, including expansion
of capacity of existing sites, as a priority and requires the
CDE to promote the availability of the fund on its Internet
Web site.
2)Expresses the intent of the Legislature to annually
appropriate $7 million of the CCFRF to the facility renovation
and repairs program, pursuant to provisional budget act
language.
FISCAL EFFECT
1)Annual General Fund/Proposition 98 cost pressure of up to $7
million, to the extent the fund balance in the CCFRF cannot
cover the annual appropriation intended under this bill.
This bill expresses legislative intent to annually appropriate
$7 million for the FRR. The CCFRF is expected to have a fund
balance of $4.78 million beginning FY 2014-15, with an
additional $2.6 million expected from loan payments. The
annual budget act authorizes payments up to $5 million for
FRR. After subtracting $5 million for FRR and allocating a
projected $2 million in awards, the CCFRF fund is expected to
have a balance of $377,362 by the end of the fiscal year.
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2)General Fund administrative costs to CDE of $30,000 to $70,000
to develop and adopt regulations to establish priorities,
policies and procedures for implementing and managing the
fund.
COMMENTS :
1)Purpose . The San Mateo County Child Care Partnership Council
supports the bill and asserts, CCFRF funds have not been
effectively used in recent years by agencies and school
districts providing state-subsidized early learning services
because the cap on the dollars available per project is too
low, the repayment period specified too short, and the use is
restricted to the purchase or repair of relocatable buildings.
This bill will permit the fund to fulfill its original intent
to increase the capacity, quality and safety of early learning
facilities serving low income children.
2)Background on CCFRF . The CCFRF, established in 1997, is
administered by the CDE to provide funding for the
lease-purchase of new relocatable buildings to eligible school
districts and contracting agencies that provide child care and
development services, and for the renovation, repair, or
improvement of an existing building to make the building
suitable for licensure for child care and development
services. Local educational agencies (LEAs) and child care
agencies that contract with the CDE to provide state-funded
child care and development services may apply for up to
$210,000 for each single, freestanding relocatable building
and up to $70,000 maximum for each additional module added to
the basic building.
All funds advanced from the program are repaid by the
applicant agency over a 10-year term, with no interest. This
bill extends loan payments to 14 years which will result in
lower payments annually for LEAs and child care providers.
However, this also means fewer payments returning to the fund
every year and less funding for new loans. The CDE expresses
concerns that extending the term increases the risk of a
borrower defaulting on a loan.
The CCFRF received an initial General Fund appropriation of
$25 million in 1997-98. By 2007-08, the CCFRF had an
available fund balance of $80.8 million. In subsequent years,
the state began diverting funds from the account to support
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other child care budget needs in the wake of the budget
crisis. Another contributing factor is the allocation of $5
million annually from the CCFRF to the FRR. Since 2006-07,
$40 million has been deducted from the CCFRF. These are
contracts and are not paid back to the CCFRF. The CDE reports
that there is high demand for the facility renovation and
repair funds. These funds are allocated to providers who
contract with CDE to provide subsidized child care and
preschool to bring a facility into compliance with the
American with Disability Act or for health and safety
compliance. Requests have totaled at least $7 million
annually over the last several years.
Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081