Existing law, the Child Care and Development Services Act, establishes a system of child care and development services for children up to 13 years of age, and requires the Superintendent of Public Instruction to implement a plan establishing assigned reimbursement rates, per unit of average daily enrollment, to be paid by the state to provider agencies for the provision of those services. Existing law also provides for an adjustment factor to be applied to units of average daily enrollment if a provider agency serves children who meet specified criteria. Existing law provides adjustment factors for infants who are 0 to 18 months of age, and toddlers who are 18 to 36 months of age, and are served in a child day care center, and for infants and toddlers who are 0 to 36 months of age and are served in a family child care home.

This bill would increase the adjustment factor for infants who are 0 to 18 months of age, age and toddlers who are 18 to 36 months of age, and are served in a child day care center, and for infants and toddlers who are 0 to 36 months of age and are served in a family child care home. age, would provide that these adjustment factors apply without regard to the kind of facility that the infant or toddler is served by, and would make conforming changes.

Existing law, the Child Care and Development Services Act, establishes a system of child care and development services for children up to 13 years of age, and requires the Superintendent of Public Instruction to implement a plan establishing assigned reimbursement rates, per unit of average daily enrollment, to be paid by the state to provider agencies for the provision of those services. Existing law also provides for an adjustment factor to be applied to units of average daily enrollment if a provider agency serves children who meet specified criteria.

This bill would increase the adjustment factor for infants who are 0 to 18 months of age, and toddlers who are 18 to 36 months of age, and are served in a child day care center, and for infants and toddlers who are 0 to 36 months of age and are served in a family child care home.

The act establishes the Child Care Facilities Revolving Fund in the State Treasury to provide funding for loans for the renovation, repair, or improvement of an existing building to make the building suitable for licensure for child care and development services, and for the purchase of new relocatable child care facilities for lease to local educational agencies and contracting agencies that provide child care and development services.

This bill would establish in the State Department of Education the Classroom Planning and Implementation Grant Program, to be administered by the Superintendent, in order to reflect the additional start-up costs of opening new general child care and development centers and California state preschool program classrooms or converting existing classrooms to serve a different child age group, as provided. The bill would require the Superintendent to award grants, as provided, upon appropriation by the Legislature.

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2292 (Aguiar-Curry) - Child care: reimbursement rates: startup costs: grants

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

This bill establishes the Family Child Care Recruitment and Training Program of 2018 to recruit, train and support new family child care providers and the Inclusive Early Education Expansion Program. This bill also adjusts the reimbursement rate for infant and toddler care and increases access to inclusive early care and education environments and infant and toddler care by providing grants for one-time infrastructure costs.

Fiscal Impact:

• While the bill’s establishment of the Family Child Care Recruitment and Training Program would be subject to an appropriation, it could create General Fund cost pressure of about $63 million to fund the program. The 2018 Budget Act already includes $167.2 million Proposition 98 General Fund for the Inclusive Early Education Expansion Program.

• The 2018 Budget Act includes an increase of $39.668 million (increasing to $79.336 million in 2019-20) for increases to the Standard Reimbursement Rate adjustment factors for infants, toddlers, children with exceptional needs, and severely disabled children. However, the adjustment factor proposed by this measure is .03 points higher which would result in additional General Fund costs of $3.3 million for General Child Care and Migrant Centers.
• Any cost to the California Department of Education (CDE) for administering the Inclusive Early Education Expansion Program is expected to be minor and absorbable within existing resources.

Background:

Existing law establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents including a full range of supervision, health, and support services through full- and part-time programs. Existing law defines “child care and development services” to mean services designed to meet a wide variety of children’s and families’ needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite.

Existing law states the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs.

Existing law requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified.

Existing law requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates for child care and development services, to vary by length of program year and hours of service, and establishes amounts for, and provides for an annual cost-of-living adjustment to, the standard reimbursement rate.

Existing law establishes adjustment factors to reimbursement rates for child care and development services, applied by multiplying the applicable adjustment factor by the provider agency’s reported child days of enrollment for the child(ren) to whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including, as specified: infants served in child day care centers; toddlers served in child day care centers; infants and toddlers served in family child care homes; children between the ages of 0 and 21 with exceptional needs; children between the ages of 0 and 21 with severe disabilities; children between the ages of 0 and 14 at risk of neglect, abuse, or exploitation; and limited-English-speaking and non-English-speaking children between 2 years of age and kindergarten age. Further, prohibits the days of enrollment for children who meet more than one adjustment-factor criteria from being adjusted more than once, and requires the increase in reimbursement amounts resulting from application of the adjustment factor(s) to be used to serve each child for whom an adjustment factor is claimed.

Proposed Law:

This bill establishes the Family Child Care Recruitment and Training Program of 2018, to be administered by the Superintendent of Public Instruction, for purposes of supporting the recruitment and training of a new generation of licensed family child care providers. The bill specifies that upon appropriation by the Legislature for these purposes, the program shall provide resources in accordance with the Child Care Initiative Project pursuant to current law, conduct outreach, recruitment and business training, and provide startup costs and resources to new family child care providers in the state.

This bill revises the reimbursement rate adjustment factors for subsidized child care as follows:

• Deletes the adjustment factor specific to children between the ages of 0 and 36 months in family child care homes, and instead applies the separate adjustment factors for infants and toddlers to all applicable child care settings.
• Increases the adjustment factor for infants who are 0 to 18 months of age from 1.7 to 2.44 regardless of the setting.
• Increases the adjustment factor for toddlers between the ages of 18 and 36 months from 1.4 to 1.83 regardless of the setting.

This bill establishes the Inclusive Early Education Expansion Program for purposes of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities, and requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the program.

This bill provides that an applicant shall include specified information in its application, including a proposal to increase access to subsidized inclusive early care and education programs for children up to five years of age, or subsidized infant and toddler early care and education programs, in low-income and high-need communities, and requires grants to be awarded on a competitive basis with priority given to applicants with a demonstrated need for expanded access to inclusive early care and education or infant and toddler care, as well as applicants that represent a consortium of local partners.

This bill requires that grants be used for one-time infrastructure costs only, including, but not limited to, adaptive and age-appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment and professional development. This bill also requires Early Education Expansion Program expenditures to comply with federal statute governing Temporary Assistance for Needy Families, and requires that a grant recipient commit to provide program data, as specified by the CDE, as a condition of the receipt of grant funding.

This bill establishes the Early Education Expansion Program for Local Educational Agencies for the purpose of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities. This bill requires CDE to use funds appropriated in the annual Budget Act or another statue to implement the program and requires that these funds be available for encumbrance until June 30, 2023.

This bill requires CDE’s Special Education Division and Early Education and Support Division to provide guidance to local educational agencies on serving young children with exceptional needs in the least restrictive environment, as required by the federal Individuals with Disabilities Education Act.

This bill requires, at a minimum, an applicant to be an LEA and include specified information in its grant application, including a proposal to increase access to subsidized inclusive early care and education programs for children up to five years of age, or subsidized infant and toddler early care and education programs, in low-income and high-need communities.

This bill prohibits anything in the provisions of the bill related to the Early Education Expansion Program for LEAs from prohibiting an LEA from applying on behalf of a consortium of providers within the local educational agency’s program area, including agencies that will provide inclusive early care education programs on behalf of the applicant.

This bill requires grants to be awarded on a competitive basis with priority given to applicants with a demonstrated need for expanded access to inclusive early care and education that demonstrated a commitment to serving children with exceptional needs or children in infant and toddler early care and education programs; applicants in low-income communities, and applicants that represent a consortium of local partners; and LEA’s that through their applications, demonstrate collaboration between special education and early education staff and that commit to serving a higher proportion of children with exceptional needs in least restrictive early education environments.

This bill authorizes grants to be used for one-time infrastructure costs only, including, but not limited to adaptive and age appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment, and professional development.

This bill prohibits grant funds from being used for ongoing expenditures, and requires a grant recipient commit to provide program data, as specified by the department, as a condition of the receipt of grant funding.

Related Legislation:

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Staff Comments:

The 2018 Budget Act provides a total of $167 million in one-time funding for competitive grants to LEAs and non-LEAs to increase the availability of inclusive early care and education settings for children from birth to five years old in low-income and high-need communities. The Budget Act also increases to the adjustment factor are also being discussed through the budget process. The infant rate adjustment factor has been increased from 1.7 to 2.44 and the toddler rate adjustment factor has been increased from 1.4 to 1.8. In addition, the adjustment factor for children with exceptional needs has been increased from 1.2 to 1.54 and the adjustment factor for severely disabled children has been increased from 1.5 to 1.93.

-- END --

SENATE COMMITTEE ON HUMAN SERVICES

Senator Wiener, Chair

2017 - 2018 Regular

Bill No: AB 2292

Subject: Child care: reimbursement rates: startup costs: grants.

SUMMARY

This bill establishes the Family Child Care Recruitment and Training Program of 2018 to recruit, train and support new family child care providers; adjusts the reimbursement rate for infant and toddler care; and increases access to inclusive early care and education environments and infant and toddler care by providing grants for one-time infrastructure costs.

ABSTRACT

Existing law:

1. Establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents including a full range of supervision, health, and support services through full- and part-time programs. (EDC 8200 et seq.)
2. States the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs. (EDC 8202)
3. Defines "child care and development services" to mean services designed to meet a wide variety of children's and families' needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208 (j))
4. Requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified. (EDC 8240 and EDC 8241)
5. Creates the California Child Care Initiative Project as a project to expand the role and functions of selected resource and referral (R&R) agencies in activities to aid communities in increasing their capability in the number of child care spaces available and the quality of child care services offered. (EDC 8215)
6. Requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates for child care and development services, to vary by length of program year and hours of service, and establishes amounts for, and provides for an annual cost-of-living adjustment to, the standard reimbursement rate (SRR). (EDC 8265)
7. Establishes adjustment factors to reimbursement rates for child care and development services, applied by multiplying the applicable adjustment factor by the provider agency's reported child days of enrollment for the child(ren) for whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including, as specified. (EDC 8265.5)
8. Requires through state and federal law that children with exceptional needs between the ages of three and five be provided with a free and appropriate education. (EDC 56026)
9. Requires families to meet certain criteria in order to be eligible for federal and state subsidized child development services, including that a family must be either a current aid recipient, income eligible, homeless, or one whose children are recipients of protective services or have been identified as being abused, or neglected, as specified. (EDC 8263)
10. Defines "California State Preschool Program" (CSPP) to mean part-day and full-day educational programs for low-income or otherwise disadvantaged three- and four-year olds, and includes the CSPP under the definition of "child care and development programs" which offer a full range of services for children from zero to 13 years of age, as specified. (EDC 8208(i) and 8208(ad))
11. Requires the Superintendent of Public Instruction to administer all CSPPs, which include, but are not limited to, part-day age- and developmentally appropriate programs designed to facilitate the transition to kindergarten for three- and four-year-old children in educational development, health services, social services, nutritional services, parent education and parent participation, evaluation, and staff development. (EDC 8235(a))
12. Authorizes a part-day CSPP to provide services to children in families with incomes up to 15 percent above the income eligibility threshold, as specified, provided all other eligible three- and four-year-olds have been enrolled. Further specifies that no more than 10 percent of the children enrolled under a provider's entire contract can be children in families above the income eligibility threshold. (EDC 8235(c))
13. Authorizes a part-day CSPP to, after all otherwise eligible children have been enrolled, provide services to three- and four-year old children whose families earn incomes above the eligibility threshold if the children have been identified as "children with exceptional needs" pursuant to current law, as specified. (EDC 8235(d))
14. Establishes under federal law the Temporary Assistance for Needy Families (TANF) program to provide cash aid and welfare-to-work services to eligible families. (42 U.S.C. 601 et seq.)
15. Establishes in federal law the Individuals with Disabilities Education Act to ensure the provision of free appropriate public education to children with disabilities that is tailored to meet their needs. (20 U.S.C. 1400 et seq.)

This bill:

1. Makes Legislative findings and declarations related to the importance of the first three years of a child's life and the availability of affordable child care during this period.
2. States Legislative intent to increase the state's capacity to serve infants and toddlers in high-quality child care programs across California, through a variety of methods, as specified.
3. Establishes within the California Department of Education (CDE) the Family Child Care Recruitment and Training Program of 2018, to be administered by the Superintendent for purposes of supporting the recruitment and training of a new generation of licensed family child care providers and specifies that upon appropriation by the Legislature for these purposes, the program shall provide resources in accordance with the Child Care Initiative Project pursuant to current law; conduct outreach; recruitment; business training; and provide startup costs and resources to new family child care providers.
4. Revises reimbursement rate adjustment factors for subsidized child care as follows:
   1. Deletes the adjustment factor specific to children between the ages of 0 and 36 months in family child care homes, and instead applies the separate adjustment factors for infants and toddlers to all applicable child care settings.
   2. Increases the adjustment factor for infants who are zero to 18 months of age from 1.7 to 2.44, regardless of the setting.
   3. Increases the adjustment factor for toddlers between the ages of 18 and 36 months from 1.4 to 1.83, regardless of the setting.
5. States legislative findings and declarations relative to increasing the state’s capacity for high-quality early care and education and the importance of inclusive early care and education environments.
6. Establishes the Early Education Expansion Program for purposes of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities.
7. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement Early Education Expansion program and requires these funds to be available for encumbrance until June 30, 2023.
8. Requires, at a minimum, an applicant include all of the following information in its application:
   1. A proposal to increase access to subsidized inclusive early care and education programs for children up to five years of age, or subsidized infant and toddler early care and education programs, in low-income and high-need communities. Defines “high need” as identified through the annual county-wide assessments of need for child care conducted by the relevant local planning councils, as specified;
   2. The number of additional subsidized children proposed to be served and the number of children with exceptional needs intended to be served initially;
   3. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period. Subsidies may be funded with private, local, state, or federal funds, so long as a reasonable expectation of sustainability is demonstrated; and
   4. The inclusion of a set-aside of resources to invest in professional development, including, but not limited to, for age-appropriate inclusive practices, as specified.
9. Requires grants to be awarded on a competitive basis with priority given to applicants with a demonstrated need for expanded access to inclusive early care and education or infant and toddler care, as well as applicants that represent a consortium of local partners.
10. Requires grants to be used for one-time infrastructure costs only, including, but not limited to, adaptive and age-appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment and professional development.
11. Requires Early Education Expansion Program expenditures to comply with federal statute governing TANF.
12. Requires that a grant recipient commit to provide program data, as specified by the CDE, as a condition of the receipt of grant funding.
13. Establishes the Early Education Expansion Program for LEAs for the purpose of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities.
14. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program for LEAs and requires that these funds be available for encumbrance until June 30, 2023.
15. Requires CDE’s Special Education Division and Early Education and Support Division to provide guidance to LEAs on serving young children with exceptional needs in the least restrictive environment, as required by the federal Individuals with Disabilities Education Act.
16. Requires, at a minimum, an applicant to be an LEA and include all of the following information in its grant application.
    1. A proposal to increase access to subsidized inclusive early care and education programs for children up to five years of age, or subsidized infant and toddler early care and education programs, in low-income and high-need communities.
    2. The number of additional subsidized children proposed to be served.
    3. A plan to fill and sustain subsidized programs created by grant funds beyond the grant period. Subsidies may be funded with private, local, state, or federal funds so long as reasonable expectation of sustainability is demonstrated.
    4. The identification of resources necessary to support lead agency professional development, including, but not limited to, that which will allow staff to develop the knowledge and skills required to implement effective inclusive and age-appropriate practices, and fiscal sustainability.
17. Prohibits anything in the provisions of the bill related to the Early Education Expansion Program for LEAs from prohibiting an LEA from applying on behalf of a consortium of providers within the LEA’s program area, including agencies that will provide inclusive early care education programs on behalf of the applicant.
18. Requires grants to be awarded on a competitive basis with priority given to:
19. Applicants with a demonstrated need for expanded access to inclusive early care and education that demonstrate a commitment to serving children with exceptional needs or children in infant and toddler early care and education programs.
20. Applicants in low-income communities and applicants that represent a consortium of local partners.
21. LEA’s that demonstrate collaboration between special education and early education staff and that commit to serving a higher proportion of children with exceptional needs in the least restrictive early education environments.
22. Authorizes grants to be used for one-time infrastructure costs only, including, but not limited to adaptive and age appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment, and professional development.
23. Prohibits grant funds from being used for ongoing expenditures.
24. Requires a grant recipient to commit to provide program data, as specified by CDE, as a condition of the receipt of grant funding.

FISCAL IMPACT

According to the Assembly Committee on Appropriations on May 23, 2018, this bill may result in the following costs:

1. Unknown, potentially significant costs (Proposition 98 General Fund [GF], GF or federal funds) to provide additional funding, services, and supports to new family child care providers;
2. $65 million ongoing mix of GF and federal fund to provide a reimbursement rate increase to all subsidized child care providers serving infants and toddlers;
3. One-time GF costs of $380,000 in Fiscal Year (FY) 2018-19 and $228,000 in FY 2019-20 for CDE to administer a competitive grant program to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities. Lower costs, likely in the $100,000 to $200,000 range, in FYs 2020-21 and 2021-22 to provide technical assistance; and
4. Unknown, potentially significant costs (Proposition 98 GF, GF, or federal funds) to provide grant funding for one-time grant funding to a competitive grant program to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.

BACKGROUND AND DISCUSSION

Purpose of the bill:

According to the author, “AB 2292 will expand access to care for infants and toddlers, meaning parents now struggling to cobble together substandard care, or going without, can go to work confident that their children are supported and nurtured during the most critical developmental years in their lives.” Specifically, this bill will create the Early Education Expansion Program and the Early Education Expansion Program for Local Educational Agencies to fund start-up costs for opening new inclusive early child care facilities, as well as converting existing facilities to serve a younger age group. This bill will also codify and expand the Family Child Care Recruitment and Training Fund to provide targeted outreach, recruitment, training, supplies, and resources for startup costs to recruit child care providers. It also increases the reimbursement rate for infant and toddler care.

Subsidized Child Care and Development

California’s subsidized childcare system is designed to support low income parents and guardians who are working, in training, seeking employment, incapacitated, or in need of respite. Subsidized child care is available through a number of programs, the three main programs are: CalWORKs, AP programs, and general child care. Depending on the program, child care may be obtained through licensed child care centers, licensed family child care homes, and licensed-exempt providers.

Care is available for children through age 12, or up to age 22 for youth with exceptional needs. The majority of children in care are age three and four, with that age group making up 59 percent of the total number of children in subsidized child care. Twenty-nine percent of children in care are five years of age or older, while 12 percent are ages two or younger.^[1] These numbers do not include children who are enrolled in federally funded Head Start or other federal programs.

Families may be eligible for state-subsidized child care through participation in CalWORKs, or based on income and if they can show need for child care services. Income eligibility for families that are not current recipients of CalWORKs is established initially at 70 percent of state median income, which is up to $52,076 per year for a family of three. Families remain income eligible until their adjusted monthly income exceeds 85 percent of the most recent state median income, which is up to $63,235 per year for a family of three.

The state’s child care and development services are delivered to eligible families through two categories of providers, those with a direct service contract with CDE (licensed Title 5 programs) and licensed and licensed-exempt providers who are reimbursed with vouchers (AP programs/ Title 22). This mixed delivery system serves children from birth to 13 years old and allows families to choose from center-based care, family child care homes and in-home care.

In Fiscal Year 2017-18, there are approximately 187,000 subsidized child care slots offered across the various programs, as well as over 165,000 State Preschool (101,000 part-day and 65,000 full-day) and 83,000 Transitional Kindergarten slots.

Provider Reimbursement

California has established two methodologies for determining the reimbursement rates for child care and development services. Voucher-based providers are reimbursed using a Regional Market Rate (RMR) survey, with rates varying regionally. Rate ceilings are established for each county according to estimates of the 75th percentile of rates for the various types of child care settings. Direct contract providers are reimbursed using the SRR, which is set by the state. These providers receive the same reimbursement rate, no matter where in the state they are located, but are eligible for adjustments based on the needs of the children served. The SRR is $45.55 per child per date of enrollment.

Current law authorizes an adjustment increase in the SRR, recognizing that there are higher costs to serve certain populations, including the following:

This bill increases the adjustment factor specifically for toddlers 18 to 36 months from 1.4 to 1.83, regardless of setting and for infants who are zero to 18 months from 1.7 to 2.44, also regardless of setting.

Serving Children with Unique Needs

State and federal law require LEAs to provide services for preschool-age students with exceptional needs in the least restrictive environment. Similarly, LEAs are responsible for providing education to a preschool child with a disability and must ensure that services are provided in the least restrictive environment where the child’s unique needs can be met. Children with disabilities may be served through the state’s subsidized child care or State Preschool programs. From birth through age two, children with exceptional needs generally receive support through regional developmental centers or sometimes through LEAs. This support may be a full-day program or a targeted intervention that a child would be provided on a regular basis with families potentially also utilizing mainstream options for child care. When children with disabilities turn three years of age, they are able to participate in programs provided by their LEAs either through special day programs, generally for more intensive support, or with targeted support such as speech therapy. Child care providers who serve children with special needs do so at a higher reimbursement rate, an adjustment factor to the rate of 1.2 for children with exceptional needs, and 1.5 for severely disabled children.

This bill establishes two grant programs (LEAs and non-LEAs) for the purposes of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities. Specifically, this bill provides one-time grants to providers committing to serving children (0 to five) with exceptional needs with access to one-time infrastructure grant funds.

Family Child Care Homes

CCDSS regulates and oversees various licensed child care facilities in the state, including family child care homes. Licensed family child care homes must be in a provider's own home and provide a home-like environment. As of June 30, 2017, there were 28,679 licensed family day care homes in the state, with the capacity to serve 298,026 children.

Home-based care can be especially important for families with lower incomes, who are more likely to work nontraditional work hours and have a need for care providers offering flexible schedules on nights and weekends. For example, United States Department of Labor data from 2013 showed that four out of every 10 people classified as "working poor" – i.e., individuals spending at least 27 weeks in the labor force yet still earning incomes below the federal poverty level – worked in service occupations. Service sector jobs often involve nontraditional and less predictable work schedules. Correspondingly, family child care homes are more likely to serve the needs of families with parents that work nontraditional hours. The California Child Care R&R Network reports that, in 2014, 39 percent of licensed family child care homes in California offered evening, overnight, and/or weekend care, while only 2 percent of child care centers did the same.

According to the author, California has seen a 26 percent drop in the number of licensed family child care homes since 2008, leaving only 27,500 throughout the state. This bill provides one-time funding to recruit, train, and support family child care providers by building upon the Child Care Initiative Project currently administered through the CDE and offered by local R&R agencies.

Related Budget Activity

AB 1808 (Committee on Budget, 2018) the K-12 budget bill, makes the following changes that are substantially similar to provision of this bill:

• Updates the infant reimbursement rate adjustment factor from 1.7 to 2.44 and the toddler reimbursement rate adjustment factor from 1.4 to 1.8. In addition, the adjustment factor for children with exceptional needs is increased from 1.2 to 1.54 and the adjustment factor for severely disabled children is increased from 1.5 to 1.93. These rate adjustment factors are intended to account for the higher costs of serving children in these categories.
• Allocates $167.2 million in Proposition 98 funding for the Inclusive Early Education Expansion program. Under this program grants will be provided to LEAs to increase access to subsidized early care and education programs for children from birth to five years of age.
• Establishes the Inclusive Early Care Pilot Program, through which county offices of education may apply to receive grants to increase access to early care and education programs for children with exceptional needs, including severe disabilities, from birth to five years of age.

Related legislation:

AB 2698 (Rubio, 2108) defines early childhood mental health consultation service, declares Legislative intent encouraging the provision of such services in CSPPs and general child care and development programs, and requires, under certain circumstances, the application of a reimbursement rate adjustment factor for children served in programs where these services are provided. This bill is pending before this committee.

AB 2626 (Mullin, 2018) makes a number of statewide changes to subsidized child care and development programs, including raising the income eligibility threshold for families; changing the age restrictions for CSPP; providing opportunities for staff training; and increasing flexibility in the use of contracted funds. This bill is pending before this committee.

AB 1808 (Committee on Budget, 2018) is the K-12 Education Omnibus Trailer Bill for FY 2018-19 budget and makes various statutory changes to implement the budget, including increasing the adjustment factors for certain populations of child care providers. This bill is awaiting the Governor’s signature.

AB 312 (O’Donnell, 2018) creates a funding mechanism for state support of special education preschool and requires that special education funding rates be equalized to the 90th percentile after the Local Control Funding Formula is fully funded. This bill was held in Assembly Appropriations.

AB 104 (Assembly Committee on Budget, Chapter 13, Statutes of 2015), among other things, required that reimbursement rate adjustment factors must apply to a full-day State Preschool program when reimbursement rates are above the full-day State Preschool rate.

AB 47 (McCarty, 2015) would have established the Preschool for All Act of 2015 and required, on or before June 30, 2018, all eligible children who are not enrolled in transitional kindergarten to have access to CSPP the year before they enter kindergarten, if their parents wish to enroll them and contingent upon the appropriation of sufficient funding in the annual Budget Act for this purpose. This bill was vetoed by the Governor.

AB 2286 (Bonilla, 2011) proposed to increase the adjustment factor for infants who are 0 to 18 months of age and are served in a child day care center and for toddlers who are 18 to 36 months of age and are served in a child day care center, as specified. The bill did not pass out of the Assembly Committee on Appropriations.

AB 3781 (Brulte, Chapter 588, Statutes of 1994) split the existing adjustment factor of 1.4 for children ages 0 to 36 months in child care centers into an adjustment factor of 1.7 for infants ages 0 to 18 months in centers and another adjustment factor of 1.4 for toddlers ages 18 to 36 months in centers, and specified an adjustment factor of 1.4 for children ages 0 to 36 months in family child care homes.

COMMENTS

This bill is substantially similar to provisions in AB 1808 (Committee on Budget, 2018) which is the K-12 Education Omnibus Trailer Bill for 2018-19 budget. AB 1808 provides one-time funding for competitive grants to LEAs and non-LEAs to increase the availability of inclusive early care and education settings for children from birth to five years old in low-income and high-need communities. Increases infant rate adjustment factor would be increased from 1.7 to 2.44 and the toddler rate adjustment factor from 1.4 to 1.8. In addition, the adjustment factor for children with exceptional needs would be increased from 1.2 to 1.54 and the adjustment factor for severely disabled children would be increased from 1.5 to 1.93. As of June 21, 2018, AB 1808 is awaiting the Governor’s signature.

It’s unclear to committee staff whether this bill compliments or competes with related budget activity.

PRIOR VOTES

POSITIONS

Support:

2020 Mom

Advancement Project California

Alameda County Board of Supervisors

Cal Poly Pomona Children’s Center

California Alternative Payment Program

California Association for the Education of Young Children

California Child Development Administrators Association

California Community Colleges Early Childhood Educators

California Federation of Teachers

California Legislative Women’s Caucus

California State Alliance of YMCAs

Cambridge Community Center

Central valley Children’s Services Network

Child Action Inc.

Child Care Alliance of Los Angeles

Child Care Resource Center

Child Development Consortium of Los Angeles

Child Development Resources of Ventura County

Child360

Children Now

Children’s Council of San Francisco

Choices for Children

City and County of San Francisco Human Services Agency

Coco Kids

Common Sense Kid’s Action

Community Action Partnership of San Luis Obispo County, Inc

Community Child Care Council

Concord Child Care Center

Congregation Beth Am

Crystal Stairs, Inc

Early Edge California

Easter Seals of Southern California

First 5

First 5 California

First 5 Humboldt

First 5 LA

First 5 of Mono County

First 5 of Santa Clara County

First 5 Placer Children and Families Commission

First 5 Sacramento

First 5 San Bernardino

First 5 San Mateo County

First 5 Santa Cruz County

First 5 Sonoma County

First 5 Association of California

Go Kids

Kidango

Los Angeles County Board of Supervisors

Los Angeles County Office of Education

Norco College

Options for Learning

Palo Alto Community Child Care

Santa Clara Office of Education

SIEU California

Strong Start of Santa Clara County

The California Coalition for Equity in Early Care and Education

The California Kindergarten Association

The League of Women Voters California

The National Association of Social Workers

The San Francisco Childcare Planning and Advisory Council

The San Mateo County Child Care Partnership Council

UDW/AFSCME Local 3930

United Ways of California

V.I.P. Tots

Wu Yee Children’s services

Young Horizons

Zero to Three

3 individuals

Oppose:

None received

-- END –

1. “Analysis of Child Care and Preschool Proposals,” Legislative Analyst’s Office, March 16, 2017. ↑

SENATE COMMITTEE ON EDUCATION

Senator Benjamin Allen, Chair

2017 - 2018 Regular

Bill No: Hearing Date: June 13, 2018

Subject:

NOTE: This bill has been referred to the Committees on Education and Human Services. A "do pass" motion should include referral to the Committee on Human Services.

SUMMARY

This bill establishes the Family Child Care Recruitment and Training Program of 2018 to recruit, train and support new family child care provides; adjusts the reimbursement rate for infant and toddler care; and increases access to inclusive early care and education environments and infant and toddler care by providing grants for one-time infrastructure costs.

BACKGROUND

Existing law:

1. Establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents including a full range of supervision, health, and support services through full- and part-time programs. (Education Code § 8200 et seq.)
2. Defines “child care and development services” to mean services designed to meet a wide variety of children’s and families’ needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EC § 8208 (j))
3. States the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs. (EC § 8202)
4. Requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified. (EC § 8240 and 8241)
5. Creates the California Child Care Initiative Project as a project to expand the role and functions of selected resource and referral agencies in activities to aid communities in increasing their capability in the number of child care spaces available and the quality of child care services offered. (EC § 8215)
6. Requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates for child care and development services, to vary by length of program year and hours of service, and establishes amounts for, and provides for an annual cost-of-living adjustment to, the standard reimbursement rate. (EC § 8265)
7. Establishes adjustment factors to reimbursement rates for child care and development services, applied by multiplying the applicable adjustment factor by the provider agency’s reported child days of enrollment for the child(ren) to whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including, as specified: infants served in child day care centers; toddlers served in child day care centers; infants and toddlers served in family child care homes; children between the ages of 0 and 21 with exceptional needs; children between the ages of 0 and 21 with severe disabilities; children between the ages of 0 and 14 at risk of neglect, abuse, or exploitation; and limited-English-speaking and non-English-speaking children between 2 years of age and kindergarten age. Further, prohibits the days of enrollment for children who meet more than one adjustment-factor criteria from being adjusted more than once, and requires the increase in reimbursement amounts resulting from application of the adjustment factor(s) to be used to serve each child for whom an adjustment factor is claimed. (EC § 8265.5)
8. Establishes in federal law the Individuals with Disabilities Education Act (IDEA) to ensure the provision of free appropriate public education to children with disabilities that is tailored to meet their needs. (20 U.S.C. §1400 et seq.)
9. Requires through state and federal law that children with exceptional needs between the ages of three and five be provided with a free and appropriate education. (EC § 56026)
10. Establishes under federal law the Temporary Assistance for Needy Families program to provide aid and welfare-to-work services to eligible families. (42 U.S.C. 601 et seq.)

ANALYSIS

This bill:

Family Child Care Recruitment and Training Program

1. Establishes in the California Department of Education (CDE) of the Family Child Care Recruitment and Training Program of 2018, to be administered by the Superintendent for purposes of supporting the recruitment and training of a new generation of licensed family child care providers and specifies that upon appropriation by the Legislature for these purposes, the program shall provide resources in accordance with the Child Care Initiative Project pursuant to current law, conduct outreach, recruitment and business training, and provide startup costs and resources to new family child care providers in the state.

Reimbursement Rate Adjustment Factors

1. Revises reimbursement rate adjustment factors for subsidized child care as follows:
   1. Deletes the adjustment factor specific to children between the ages of 0 and 36 months in family child care homes, and instead applies the separate adjustment factors for infants and toddlers to all applicable child care settings.
   2. Increases the adjustment factor for infants who are 0 to 18 months of age from 1.7 to 2.44 regardless of the setting.
   3. Increases the adjustment factor for toddlers between the ages of 18 and 36 months from 1.4 to 1.83 regardless of the setting.

Early Education Expansion Program

1. Establishes the Early Education Expansion Program for purposes of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities.
2. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement Early Education Expansion program and requires these funds to be available for encumbrance until June 30, 2023.
3. Requires, at a minimum, an applicant include all of the following information in its application:
   1. A proposal to increase access to subsidized inclusive early care and

education programs for children up to five years of age, or subsidized infant and toddler early care and education programs, in low-income and high-need communities.

• 1. The number of additional subsidized children proposed to be served and

the number of children with exceptional needs intended to be served initially.

• 1. A plan to fill and sustain subsidized spaces or programs created by grant

funds beyond the grant period. Subsidies may be funded with private, local, state, or federal funds, so long as a reasonable expectation of sustainability is demonstrated.

• 1. The inclusion of a set-aside of resources to invest in professional

development, including, but not limited to, for age-appropriate inclusive practices, as specified.

1. Requires grants to be awarded on a competitive basis with priority given to applicants with a demonstrated need for expanded access to inclusive early care and education or infant and toddler care, as well as applicants that represent a consortium of local partners.
2. Requires grants be used for one-time infrastructure costs only, including, but not limited to, adaptive and age-appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment and professional development.

1. Requires Early Education Expansion Program expenditures to comply with federal statute governing Temporary Assistance for Needy Families.
2. Requires that a grant recipient commit to provide program data, as specified by the California Department of Education (CDE), as a condition of the receipt of grant funding.

Early Education Expansion Program for Local Educational Agencies

1. Establishes the Early Education Expansion Program for Local Educational Agencies is hereby established for the purpose of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities.
2. Requires the department to use funds appropriated in the annual Budget Act or another statue to implement the Early Education Expansion Program for LEAs and requires that these funds be available for encumbrance until June 30, 2023.
3. Requires CDE’s Special Education Division and Early Education and Support Division to provide guidance to local educational agencies on serving young children with exceptional needs in the least restrictive environment, as required by the federal Individuals with Disabilities Education Act.
4. Requires, at a minimum, an applicant to be a local educational agency and include all of the following information in its grant application.
   1. A proposal to increase access to subsidized inclusive early care and

education programs for children up to five years of age, or subsidized infant and toddler early care and education programs, in low-income and high-need communities.

• 1. The number of additional subsidized children proposed to be served.
  2. A plan to fill and sustain subsidized programs created by grant funds

beyond the grant period. Subsidies may be funded with private, local, state, or federal funds so long as reasonable expectation of sustainability is demonstrated.

• 1. The identification of resources necessary to support lead agency

professional development, including, but not limited to, professional development to allow staff to develop the knowledge and skills required to implement effective inclusive and age-appropriate practices, and fiscal sustainability.

1. Prohibits anything in the provisions of the bill related to the Early Education Expansion Program for Local Education Agencies (LEAs) from prohibiting an LEA from applying on behalf of a consortium of providers within the local educational agency’s program area, including agencies that will provide inclusive early care education programs on behalf of the applicant.
2. Requires grants to be awarded on a competitive basis with priority given to:
   1. Applicants with a demonstrated need for expanded access to inclusive

early care and education that demonstrated a commitment to serving children with exceptional needs or children in infant and toddler early care and education programs.

• 1. Applicants in low-income communities, and applicants that represent a

consortium of local partners.

• 1. LEA’s that through their applications, demonstrate collaboration between

special education and early education staff and that commit to serving a higher proportion of children with exceptional needs in least restrictive early education environments.

1. Authorizes grants to be used for one-time infrastructure costs only, including, but not limited to adaptive and age appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment, and professional development.
2. Prohibits grant funds from being used for ongoing expenditures.
3. Requires a grant recipient commit to provide program data, as specified by the department, as a condition of the receipt of grant funding.

Other

1. States legislative findings and declarations relative to increasing the state’s capacity for high-quality early care and education and the importance of inclusive early care and education environments.
2. Defines “high need” as identified through the annual county-wide assessments of need for child care conducted by the relevant local planning councils, pursuant to Section 8499.5.

STAFF COMMENTS

1. Need for the bill. According to the author, “The standard reimbursement rate, which the state pays to subsidized child care providers through direct contracts, is exceptionally low and inadequate to fully fund high quality child care and development programs. There is a specific problem in the Education Code that leads to the exceptionally low reimbursement rates. Center contractors are using a system similar to K-12 “ADA”, called a standard maximum payment rate (currently $45.44 per day of enrollment). Infant and toddler classes cost much more per child to operate, due largely to the much smaller teacher or adult to child ratios required. Therefore, there are adjustment factors to increase the standard maximum payment rate for infants and toddlers. The current adjustment factors are not enough to cover the significantly higher costs of infant and toddler centers.”

The author states, “This bill will also create the “Early Education Expansion Program” and the “Early Education Expansion Program for Local Educational Agencies to fund start-up costs for opening new inclusive early child care facilities, as well as converting existing facilities to serve a younger age group. The program will enable child care providers to purchase age-appropriate facilities and infrastructure, start-up support, and professional development for all care settings. Proper training, facilities, and infrastructure will ensure our children receive the best adult-child interaction to support their brain development when they are away from their parents. This bill will also codify and expand the “Family Child Care Recruitment and Training Fund,” dedicating $6 Million dollars over 5 years to targeted outreach, recruitment, training, supplies, and resources for startup costs to recruit a new generation of family child care providers in California.”

1. State-subsidized child care. Families may be eligible for state-subsidized child care through participation in CalWORKs, or based on income and if they can show need for child care services. Income eligibility for families that are not current recipients of CalWORKs is established, initially, at 70 percent of state median income. Families remain income eligible until their adjusted monthly income exceeds 85 percent of the most recent state median income, adjusted for family size. The state’s child care and development services are delivered to eligible families through two categories of providers, providers with a direct service contract with the California Department of Education (CDE) (licensed Title 5 programs) and voucher-based (Alternative Payment Programs/Title 22) licensed and licensed-exempt. This mixed delivery system serves children from birth to 13 years old allows families to choose from center-based care, family child care homes and in-home care.

This bill, among other things, provides one-time grants for both local educational agencies and other providers to purchase equipment and train staff to expand access to early care and education for infants and toddlers.

1. Family Child Care. Families often choose family child care settings to meet the needs of their children. The Community Care Licensing Division (CCLD) within the Department of Social Services (DSS) regulates and oversees various licensed child care facilities in the state, including family child care homes.

Licensed family child care homes must be in a provider's own home and provide a home-like environment. The types of family child care homes vary widely, from small family child care homes that care for a few children to a large family child care home that cares for up to 14 children depending on their ages. As of June

30, 2017, there were 28,679 licensed family day care homes in the state, with the capacity to serve 298,026 children. The pool of family child care providers declined significantly during the recession and current providers may be nearing retirement. This bill provides one-time funding to recruit, train, and support family child care providers by building upon the Child Care Initiative Project currently administered through the CDE and offered by local resource and referral agencies.

1. Provider Reimbursement Rates. California has established two methodologies for determining the reimbursement rates for child care and development services. Voucher-based providers are reimbursed using a Regional Market Rate (RMR) survey, with rates varying regionally. Rate ceilings are established for each county according to estimates of the 75th percentile of rates for the various types of child care settings. Direct contract providers are reimbursed using the Standard Reimbursement Rate set by the state. These programs receive the same reimbursement rate, no matter where in the state the program is located but are eligible for adjustments based on needs of the children served. The SRR is $45.44 per child per day of enrollment.
2. Adjustment factor. Current law authorizes an adjustment increase in the SRR, recognizing that there are higher costs to serve certain populations, including the following:

Infants (0 – 18 months): 1.7

Toddlers (18 – 36 months): 1.4

Infants and Toddlers in Family child care home: 1.4

Children with exceptional needs (0 to 21 years): 1.2

Severely disabled children (0 – 21 years): 1.5

Child at risk of neglect, abuse, or exploitation (0 – 14): 1.1

Limited-English-speaking (2 – kindergarten age) 1.1

This bill increases the adjustment factor specifically for toddlers 18 to 36 months from 1.4 to 1.83 regardless of setting and for infants who are 0 to 18 months from 1.7 to 2.44 also regardless of setting.

1. Serving children with unique needs. State and federal law require local educational agencies (LEA) to provide services for preschool-age students with exceptional needs in a least restrictive environment. Federal guidance notes that the LEA responsible for providing education to a preschool child with a disability must ensure that services are provided in the least restrictive environment where the child’s unique needs can be met. Children with disabilities may be served through the state’s subsidized child care or State Preschool programs. From birth through age two, children with exceptional needs generally receive support through regional developmental centers or sometimes through LEAs. This support may be a full-day program or a targeted intervention that a child would be provided on a regular basis with families potentially also utilizing mainstream options for child care. When children with disabilities turn three years of age, they are able to participate in programs provided by their local educational agency (LEA) either through special day programs, generally for more intensive support, or with targeted support such as speech therapy. Providers who serve children with special needs do so at a higher reimbursement rate, an adjustment factor to the rate of 1.2 for children with exceptional needs, and 1.5 for severely disabled children.

This bill establishes two grant programs (LEAs and non-LEAs) for the purposes of increasing access to inclusive early care and education programs and increasing early learning infrastructure capacity in high-need communities. Specifically, this bill provides one-time grants to providers committing to serving children (0 to five) with exceptional needs with access to one-time infrastructure grant funds.

1. Related budget activity. Substantially similar to this bill, the Governor’s Budget proposal provides a total of $167 million in one-time funding for competitive grants to LEAs and non-LEAs to increase the availability of inclusive early care and education settings for children from birth to five years old in low-income and high-need communities. Increases to the adjustment factor are also being discussed through the budget process. The infant rate adjustment factor would be increased from 1.7 to 2.44 and the toddler rate adjustment factor from 1.4 to 1.8. In addition, the adjustment factor for children with exceptional needs would be increased from 1.2 to 1.54 and the adjustment factor for severely disabled children would be increased from 1.5 to 1.93. It’s unclear to committee staff whether this bill compliments or competes with related budget activity.

SUPPORT

2020 Mom

Advancement Project

Alameda County Board of Supervisors

CAAEYC

Cal Poly Pomona Children’s Center

California Alternative Payment Program Association

California Child Development Administrators Association

California Community Colleges Early Childhood Educators

California Federation of Teachers

California State Alliance of YMCAs

Central Valley Children’s Services Network

Child Action, Inc.

Child Care Alliance of Los Angeles County

Child Care Resource Center

Child Development Consortium of Los Angeles, Inc.

Child Development Resources of Ventura County

Child360

Children Now

Children’s Council of San Francisco

Choices for Children

CocoKids

Common Sense Kids Action

Community Action Partnership of San Luis Obispo County, Inc.

Community Child Care Council (4Cs) of Alameda County

Concord Child Care Center, Inc.

Crystal Stairs, Inc.

Early Edge California

First 5 California

First 5 Humboldt

First 5 LA

First 5 Mono County

First 5 Placer Children and Families Commission

First 5 Sacramento

First 5 San Bernardino

First 5 San Mateo County

First 5 Santa Clara County

First 5 Santa Cruz County

First 5 Sonoma County

Go Kids

Kidango

League of Women Voters of California

Legislative Women’s Caucus

Los Angeles County Office of Education

Norco College

Options for Learning

San Francisco Childcare Planning and Advisory Council

San Francisco Human Services

San Mateo County Child Care Partnership Council

SEIU California

Strong Start of Santa Clara County

The California Kindergarten Association

UDW/AFSCME Local 3930

United Way

University of New England

VIP Tots

Wu Yee Children’s Services

Young Horizons Child Development Centers

Zero to Three

OPPOSITION

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2292

Author:(Aguiar-Curry)

As Amended Ver:April 4, 2018

Majority vote

SUMMARY: Adopts a number of changes designed to increase capacity to serve young children in family child care homes, and across a variety of settings within the state subsidized child care system. Specifically, this bill:

1. Makes Legislative findings and declarations related to the importance of the first three years of a child's life and the availability of affordable child care during this period.
2. States Legislative intent to increase the state's capacity to serve infants and toddlers in high-quality child care programs across California, through a variety of methods, as specified.
3. Establishes within the California Department of Education (CDE) the Family Child Care Recruitment and Training Program of 2018, to be administered by the Superintendent of Public Instruction, for purposes of supporting the recruitment and training of licensed family child care providers and stipulates that, upon appropriation by the Legislature, the program shall provide resources in accordance with the Child Care Initiative Project (CCIP) as established in current law and provide funding, services, and supports, as specified, to new family child care providers in the state.
4. Revises reimbursement rate adjustment factors for subsidized child care as follows:
   1. Deletes the adjustment factor specific to children between the ages of zero and 36 months in family child care homes, and instead applies the separate adjustment factors for infants and toddlers to all applicable child care settings, versus child care centers as in current law;
   2. Increases the adjustment factor for infants who are between the ages of zero and 18 months from 1.7 to 2.44; and
   3. Increases the adjustment factor for toddlers between the ages of 18 and 36 months from 1.4 to 1.83.
5. Makes Legislative findings and declarations related to the benefits of high-quality and inclusive early care and education and the need for increased classroom infrastructure capacity as a means to increase the state's ability to provide this early care and education.
6. Establishes the Early Education Expansion Program in order to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.
7. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program and requires these funds to be available for encumbrance until June 30, 2023.
8. Requires an applicant for the Early Education Expansion Program to include, at a minimum, the following information in its application, as specified:
   1. A proposal for increasing access to subsidized early care and education programs in low-income, high-need communities for children up to five years old or for infants and toddlers;
   2. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period; and
   3. The inclusion of a set-aside of resources to invest in professional development of staff.
9. Requires Early Education Expansion Program grants to be awarded on a competitive basis, with priority given to applicants with a demonstrated need for expanded access, as specified, and to applicants that represent a consortium of local partners.
10. Requires Early Education Expansion Program grants to be used for one-time infrastructure costs only, as specified, and not for ongoing expenditures.
11. Requires Early Education Expansion Program expenditures to comply with federal statute governing Temporary Assistance for Needy Families (TANF).
12. Requires an Early Education Expansion Program grant recipient to commit to provide program data, as specified by CDE, as a condition of receiving grant funding.
13. Establishes the Early Education Expansion Program for Local Educational Agencies (LEAs) in order to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.
14. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program for LEAs and requires these funds to be available for encumbrance until June 30, 2023.
15. Requires CDE's Special Education Division and Early Education and Support Division to provide guidance to LEAs on serving young children in the least restrictive environment, as required by specified federal law.
16. Requires an applicant for the Early Education Expansion Program for LEAs to be an LEA and to include, at a minimum, the following information in its application, as specified:
    1. A proposal for increasing access to subsidized early care and education programs in low-income, high-need communities for children up to five years old or for infants and toddlers;
    2. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period; and
    3. The identification of resources necessary to support lead agency professional development, as specified.
17. Prohibits anything in the provisions of the bill related to the Early Education Expansion Program for LEAs from prohibiting an LEA from applying on behalf of a consortium of providers within the LEA's program area, as specified.
18. Requires Early Education Expansion Program for LEAs grants to be awarded on a competitive basis with priority given to:
    1. Applicants with a demonstrated need for expanded access, as specified;
    2. Applicants in low-income communities;
    3. Applicants that represent a consortium of local partners; and
    4. LEAs that demonstrate collaboration between special education and early education staff and that commit to serving a higher proportion of children with exceptional needs in the least restrictive environments, as specified.
19. Allows Early Education Expansion Program for LEAs grants to be used for one-time infrastructure costs only, as specified, and prohibits funds from being used for ongoing expenditures.
20. Requires an Early Education Expansion Program for LEAs grant recipient to commit to provide program data, as specified by the department, as a condition of receiving grant funding.

EXISTING LAW:

1. Establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents including a full range of supervision, health, and support services through full- and part-time programs. (Education Code Section (EDC) 8200 et seq.)
2. Defines "child care and development services" to mean services designed to meet a wide variety of children's and families' needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208 (j))
3. States the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs. (EDC 8202)
4. Requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified. (EDC 8240 and 8241)
5. Creates the California Child Care Initiative Project as a project to expand the role and functions of selected resource and referral agencies in activities to aid communities in increasing their capability in the number of child care spaces available and the quality of child care services offered. (EDC 8215)
6. Requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates for child care and development services, to vary by length of program year and hours of service, and establishes amounts for, and provides for an annual cost-of-living adjustment to, the standard reimbursement rate. (EDC 8265)
7. Establishes adjustment factors to reimbursement rates for child care and development services, applied by multiplying the applicable adjustment factor by the provider agency's reported child days of enrollment for the child(ren) to whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including, as specified: infants served in child day care centers; toddlers served in child day care centers; infants and toddlers served in family child care homes; children between the ages of zero and 21 with exceptional needs; children between the ages of zero and 21 with severe disabilities; children between the ages of zero and 14 at risk of neglect, abuse, or exploitation; and limited-English-speaking and non-English-speaking children between two years of age and kindergarten age. Further, prohibits the days of enrollment for children who meet more than one adjustment-factor criteria from being adjusted more than once, and requires the increase in reimbursement amounts resulting from application of the adjustment factor(s) to be used to serve each child for whom an adjustment factor is claimed. (EDC 8265.5)
8. Establishes in federal law the Individuals with Disabilities Education Act (IDEA) to ensure the provision of free appropriate public education to children with disabilities that is tailored to meet their needs. (Title 20 United States Code Section (U.S.C.) 1400 et seq.)
9. Establishes under federal law the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families. (Title 42 U.S.C. 601 et seq.)

FISCAL EFFECT: According to the Assembly Appropriations Committee on May 23, 2018, this bill may result in the following costs:

1. Unknown, potentially significant costs (Proposition 98 General Fund [GF], GF, or federal funds) to provide additional funding, services, and supports to new family child care providers;
2. $65 million ongoing mix of GF and federal fund to provide a reimbursement rate increase to all subsidized child care providers serving infants and toddlers;
3. One-time GF costs of $380,000 in the 2018-19 fiscal year and $228,000 in the 2019-20 fiscal year for CDE to administer a competitive grant program to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities. Lower costs, likely in the $100,000 to $200,000 range, in 2020-21 and 2021-22 fiscal years to provide technical assistance; and
4. Unknown, potentially significant costs (Proposition 98 GF, GF, or federal funds) to provide grant funding for one-time grant funding to a competitive grant program to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.

COMMENTS:

Subsidized child care: California's subsidized child care system is designed to assist families with parents or guardians who are working, in training, seeking employment, homeless, incapacitated, or in need of respite. Depending on the program, subsidized child care can be obtained through three main types of providers: licensed child care centers, licensed family child care homes, and license-exempt providers (for example, family members, neighbors, or friends). This child care is available through a number of programs; additionally, California offers State Preschool Programs to eligible three-and four-year-olds.

In Fiscal Year 2017-18, there are approximately 187,000 subsidized child care slots offered across the various programs, as well as over 165,000 State Preschool (101,000 part-day and 65,000 full-day) and 83,000 Transitional Kindergarten slots. Families are typically eligible for subsidized child care if they meet specified requirements and income qualifications, including: parents have a need related to work, training, or education; children are under 13 years old (or under 22 years old if they have exceptional needs), and parents earn incomes less than 70% of the most recent state median income (SMI) when first applying – up to $52,076 per year for a family of 3 – and less than 85% of the most recent SMI – up to $63,235 per year for a family of three – when renewing eligibility.

Family child care homes: The Community Care Licensing Division (CCLD) within the Department of Social Services (DSS) regulates and oversees various licensed child care facilities in the state, including family child care homes. Licensed family child care homes must be in a provider's own home and provide a home-like environment. As of June 30, 2017, there were 28,679 licensed family day care homes in the state, with the capacity to serve 298,026 children.

Home-based care can be especially important for families with lower incomes, who are more likely to work nontraditional work hours and have a need for care providers offering flexible schedules on nights and weekends. For example, United States Department of Labor data from 2013 demonstrated that four out of every 10 people classified as "working poor" – i.e., individuals spending at least 27 weeks in the labor force yet still earning incomes below the federal poverty level – worked in service occupations. Service sector jobs can often involve nontraditional and less predictable work schedules. Correspondingly, family child care homes are more likely to serve the needs of families with parents that work nontraditional hours. The California Child Care Resource and Referral Network reports that, in 2014, 39% of licensed family child care homes in California offered evening, overnight, and/or weekend care, while only 2% of child care centers did the same.

Reimbursement rates and adjustment factors: Rates are paid to providers of subsidized child care according to two different sets of schedules. Voucher-based care provides vouchers to families to access child care through their choice of a licensed day care center, a licensed family child care home, or license-exempt child care (typically, care provided by a family, friend, or neighbor who has passed a background check). Providers are reimbursed based on a biannual regional market rate (RMR) survey of the cost of child care in various geographical regions across the state; rate ceilings are then determined by applying a certain percentile to the RMR for each county. In 2018, the ceiling for licensed providers is the higher of the 75th percentile of the 2016 RMR survey or the RMR ceiling for a county as of December 31, 2017; beginning on January 1, 2019, the RMR ceiling will be established at the 75th percentile of the 2016 RMR survey for a county. (The RMR ceilings for license-exempt providers are set at the 70th percentile of a county's established RMR ceiling for family child care homes.)

Child care and development programs and state preschool programs that contract directly with CDE, as opposed to voucher-based care, are reimbursed according to a uniform statewide rate system based on the standard reimbursement rate (SRR). The fiscal year (FY) 2017-18 SRR for General Child Care is $45.44 per child day of enrollment or $11,360 per year based on 250 days of operation. However, in recognition of the higher costs associated with providing care to certain populations, state law (Education Code Section 8265.5) provides for "adjustment factors" to be multiplied by child days of enrollment to arrive at an adjusted, higher SRR for the provision of care to each child who meets one of the adjustment factor criteria.

Need for this bill: According to the author of this bill, "We need to increase the adjustment factors, but our work doesn't stop there. There is also a need for new and updated state preschool program classrooms and centers. However, the cost associated with opening these new facilities often prevents them from happening, further contributing to the shortage of care. That is why the 'Classroom Planning and Implementation Grant Program' is so important. These startup funds can get a classroom/center up and running, and that is what we need. We also need to look out for California's working families, with or without state-supported child care programs. For these families, access to licensed family child care is critical to their ability to maintain employment. This is especially true for the parents of infants and toddlers, those who work in jobs meeting the demands of our 24/7 economy, and those in rural communities. To help with access to family child providers, we need to codify and expand the 'Family Child Care Recruitment and Training Fund.' Since 2008, California has seen a 26% drop in the number of licensed family child care homes, leaving only 27,500 of these small businesses open in the state. The fund will help address this problem by recruiting a new generation of family child care providers in California. [This bill] will expand access to care for infants and toddlers, meaning parents now struggling to cobble together substandard care, or going without, can go to work confident that their children are supported and nurtured during the most critical developmental years in their lives."

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089 FN: 0003209

Date of Hearing: May 23, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2292

Author:(Aguiar-Curry) – As Amended Ver:April 4, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY: This bill, subject to appropriation, provides additional funding to recruit, train, and support new family child care providers, adjusts the reimbursement rate for infant and toddler care, and creates a grant program for one-time costs for inclusive early care and education environments and infant and toddler care. Specifically, this bill:

1. Provides additional funding for the Child Care Initiative Project (CCIP) at the California Department of Education (CDE) for outreach, recruitment, and training of licensed family child care providers.
2. Revises reimbursement rate adjustment factors for subsidized child care by a) deleting the adjustment factor specific to children between the ages of 0 and 36 months in family child care homes, and instead applying the separate adjustment factors for infants and toddlers to all applicable child care settings, b) increasing the adjustment factor for infants in all settings who are between the ages of 0 and 18 months from 1.7 to 2.44 regardless of setting, and c) increasing the adjustment factor, from 1.4 to 1.83, for toddlers in all settings between the ages of 18 and 36 months.
3. Creates a one-time competitive grant program administered by CDE to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities. Grants may be awarded to providers affiliated and not affiliated with a local education agency (LEA) and may be used for one-time infrastructure costs. (Funding to LEA-affiliated providers generally is Proposition 98 GF and funding to non-LEA-affiliated providers generally is GF.)

FISCAL EFFECT:

1. Unknown, potentially significant costs (Proposition 98 GF, GF, or federal funds) to provide additional funding, services, and supports to new family child care providers.
2. $65 million ongoing mix of GF and federal fund to provide a reimbursement rate increase to all subsidized child care providers serving infants and toddlers.
3. One-time GF costs of $380,000 in the 2018-19 fiscal year and $228,000 in the 2019-20 fiscal year for CDE to administer a competitive grant program to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities. Lower costs, likely in the $100,000 to $200,000 range, in 2020-21 and 2021-22 fiscal years to provide technical assistance.
4. Unknown, potentially significant costs (Proposition 98 GF, GF, or federal funds) to provide grant funding for one-time grant funding to a competitive grant program to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.

COMMENTS:

1. Purpose. According to the author:

We need to increase the adjustment factors, but our work doesn’t stop there. There is also a need for new and updated inclusive early child care facilities. However, the cost associated with opening these new facilities often prevents them from happening, further contributing to the shortage of care…We also need to look out for California’s working families, with or without state-supported child care programs. For these families, access to licensed family child care is critical to their ability to maintain employment.

1. Family Child Care. Families often choose family child care settings to meet the needs of their children. Family child care is licensed and regulated by the Department of Social Services (DSS) and is operated in a provider’s own home. There are about 30,000 licensed family day care homes in the state, with the capacity to serve about 300,000 children. The pool of family child care providers declined significantly during the recession and current providers may be nearing retirement. This bill provides one-time funding to recruit, train, and support family child care providers by building upon the Child Care Initiative Project currently administered through the CDE and offered by local resource and referral agencies. Current law establishes the Child Care Initiative Project, which provides funding, services, and supports to new family child care providers in the state. It is supported with about $3 million annually in federal funding.
2. Child Care Rates. The state provides a standard reimbursement rate to child care providers for providing care. Current law recognizes the varied costs of care for different groups of children by specifying adjustment factors to that reimbursement rate to better reflect the additional cost of serving children of specific ages and with certain needs including infants, toddlers, children with exceptional needs, children with severe disabilities, children at risk of neglect, abuse, or exploitation, and limited-English-speaking and non-English-speaking children.
3. Inclusive Early Care and Education and Services for Infants and Toddlers. State and federal law require providers to provide services for preschool-age students with exceptional needs in the least restrictive environment. This generally means placing children with disabilities and typically developing children in inclusive settings. Over the last decade, the number of preschool age children with exceptional needs has increased by about 20%. The 2015 Statewide Task Force of Special Education indicated a severe shortage of general education preschool options which provide children with exceptional needs with services in the least restrictive environment with their typically developing peers. The task force recommended that the state provide a) additional funds for facility modifications, b) professional learning opportunities for preschool staff, and c) increases in the availability of least-restrictive settings. This bill provides one-time grants to providers committing to serving children with exceptional needs with access to one-time infrastructure grant funds.

Since the recession, funding for subsidized child care to 3- and 4-year-old children has been restored more than has been funding for infant and toddler care. The portion of eligible infants and toddlers served varied by region, with less affluent counties tending to serve fewer children. This bill provides one-time grants to purchase equipment and train staff to offer more early care and education for infants and toddlers.

1. Related Legislation. The 2018-19 governor’s budget proposal includes $167 million (Proposition 98 GF and federal funding) in one-time funding for infrastructure to increase access to subsidized inclusive early care and education programs for zero-to-five year-old children in high-need communities.

Analysis Prepared by: Natasha Collins / APPR. / (916) 319-2081

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON EDUCATION

Patrick O'Donnell, Chair

ABPCA Bill Id:AB 2292 (

Author:Aguiar-Curry) – As Amended Ver:April 4, 2018

[Note: This bill was doubled referred to the Assembly Human Services Committee and was heard by that Committee as it relates to issues under its jurisdiction.]

SUBJECT: Child care: reimbursement rates: startup costs: grants

SUMMARY: Establishes a program to recruit, train and support new family child care providers; adjusts the reimbursement rate for infant and toddler care; and increases access to inclusive early care and education environments and infant and toddler care by providing grants for one-time infrastructure costs. Specifically, this bill:

1. Makes legislative findings and declarations as follows:
2. The first three years of each child’s life is the foundation for a successful and healthy future.
3. California is able to offer affordable child care to less than 14 percent of eligible babies and toddlers in the state, which creates a crisis for working new parents, their families, and the state’s businesses.
4. Increasing the state’s capacity for infant and toddler child care will require four foundational and distinct supports in increased per-child funding rate capacity, classroom infrastructure capacity, licensing capacity, and service capacity.
5. States Legislative intent to increase the state’s capacity to serve infants and toddlers in high-quality child care programs across California, through adequate per child funding, classroom infrastructure development, licensing, start-up support for center-based and licensed family child care, and increased child access to child care in all settings to meet the needs of working families.
6. Establishes within the California Department of Education (CDE) the Family Child Care Recruitment and Training Program of 2018, to be administered by the Superintendent of Public Instruction, for purposes of outreach, as well as the recruitment and training of licensed family child care providers and stipulates that, upon appropriation by the Legislature, the program shall provide resources in accordance with the Child Care Initiative Project (CCIP) as established in current law and provide funding, services, and supports, as specified, to new family child care providers in the state.
7. Revises reimbursement rate adjustment factors for subsidized child care as follows:
   1. Deletes the adjustment factor specific to children between the ages of 0 and 36 months in family child care homes, and instead applies the separate adjustment factors for infants and toddlers to all applicable child care settings.
   2. Increases the adjustment factor for infants who are between the ages of 0 and 18 months from 1.7 to 2.44 regardless of the setting.
   3. Increases the adjustment factor for toddlers between the ages of 18 and 36 months from 1.4 to 1.83 regardless of the setting.
8. Makes Legislative findings and declarations related to the benefits of high-quality and inclusive early care and education as follows:
9. Increasing the state’s capacity for high-quality early care and education will require increased classroom infrastructure capacity, including staff development, equipment, curricula, and facility development.
10. All young children benefit from, and should have access to, inclusive and high-quality early care and education programs, and should be provided with individualized and appropriate supports to enable them to meet high expectations.
11. Inclusive early care and education programs can improve a child’s developmental progress and educational outcomes, especially for children with exceptional needs.
12. Interventions provided to children with exceptional needs, including children who are at risk of requiring services for pupils with exceptional needs, can be more effective when a child is younger.
13. Access to high-quality inclusive early care and education programs benefits communities and families, especially when programs are coordinated with public elementary and secondary education systems to create a developmental and educational continuum of support.
14. Early childhood inclusion embodies the values, policies, and practices that support the right of every infant and young child, and his or her family, regardless of ability, to participate in a broad range of activities and contexts as full members of families, communities, and society. The desired results of inclusive experiences for children with and without disabilities, and their families, include a sense of belonging and membership, positive social relationships and friendships, and development and learning to reach their full potential. The defining features of inclusion that can be used to identify high-quality early childhood programs and services are access, participation, and supports.
15. Establishes the Early Education Expansion Program in order to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.
16. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program and requires these funds to be available for encumbrance until June 30, 2023.
17. Requires an applicant for the Early Education Expansion Program to include, at a minimum, the following information in its application, as specified:
    1. A proposal for increasing access to subsidized inclusive early care and education programs in low-income, high-need communities for children up to five years old or for subsidized early care and education programs for infants and toddlers.
    2. The number of additional subsidized children proposed to be served and the number of children with exceptional needs intended to be served initially.
    3. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period.
    4. The inclusion of a set-aside of resources to invest in professional development of staff, including, but not limited to the knowledge and skills required to implement effective and age-appropriate inclusive practices.
18. Defines “high need” as identified through the annual county-wide assessments of need for child care conducted by the relevant local planning councils, pursuant to Section 8499.5.
19. Requires Early Education Expansion Program grants to be awarded on a competitive basis, with priority given to applicants with a demonstrated need for expanded access to inclusive early care and education or infant and toddler care, and to applicants that represent a consortium of local partners.
20. Requires Early Education Expansion Program grants to be used for one-time infrastructure costs only, including, but not limited to adaptive and age-appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment and professional development, and not for ongoing expenditures.
21. Requires Early Education Expansion Program expenditures to comply with federal statute governing Temporary Assistance for Needy Families (TANF).
22. Requires an Early Education Expansion Program grant recipient to commit to provide program data, as specified by CDE, as a condition of receiving grant funding.
23. Establishes the Early Education Expansion Program for Local Educational Agencies (LEAs) in order to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.
24. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program for LEAs and requires these funds to be available for encumbrance until June 30, 2023.
25. Requires CDE’s Special Education Division and Early Education and Support Division to provide guidance to LEAs on serving young children with exceptional needs in the least restrictive environment, as required by specified federal law.
26. Requires an applicant for the Early Education Expansion Program for LEAs to be an LEA and to include, at a minimum, the following information in its application, as specified:
    1. A proposal for increasing access to subsidized inclusive early care and education programs in low-income, high-need communities for children up to five years old or for subsidized early care and education for infants and toddlers.
    2. The number of additional subsidized children proposed to be served.
    3. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period.
27. The identification of resources necessary to support lead agency professional development of staff, including, but not limited to the knowledge and skills required to implement effective and age-appropriate inclusive practices, and fiscal sustainability.
28. Prohibits anything in the provisions of the bill related to the Early Education Expansion Program for LEAs from prohibiting an LEA from applying on behalf of a consortium of providers within the LEA’s program area, including agencies that will provide inclusive early care and education programs on behalf of the applicant.
29. Requires Early Education Expansion Program for LEAs grants to be awarded on a competitive basis with priority given to:
    1. Applicants with a demonstrated need for expanded access to inclusive early care and education that demonstrate a commitment to serving a specified number of additional children with exceptional needs, or children in infant and toddler early care and education programs.
    2. Applicants in low-income communities.
    3. Applicants that represent a consortium of local partners.
    4. LEAs that demonstrate collaboration between special education and early education staff and that commit to serving a higher proportion of children with exceptional needs in the least restrictive early education environments.
30. Allows Early Education Expansion Program for LEAs grants to be used for one-time infrastructure costs only, including, but not limited to, adaptive and age-appropriate facility renovations or new construction, adaptive and age-appropriate equipment, staff recruitment, and professional development; and prohibits funds from being used for ongoing expenditures.
31. Requires an Early Education Expansion Program for LEAs grant recipient to commit to provide program data, as specified by the department, as a condition of receiving grant funding.

EXISTING LAW:

1. Establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents including a full range of supervision, health, and support services through full- and part-time programs. (EDC 8200 et seq.)
2. Defines “child care and development services” to mean services designed to meet a wide variety of children’s and families’ needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208 (j))
3. States the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs. (EDC 8202)
4. Requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified. (EDC 8240 and 8241)
5. Creates the California Child Care Initiative Project as a project to expand the role and functions of selected resource and referral agencies in activities to aid communities in increasing their capability in the number of child care spaces available and the quality of child care services offered. (EDC 8215)
6. Requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates for child care and development services, to vary by length of program year and hours of service, and establishes amounts for, and provides for an annual cost-of-living adjustment to, the standard reimbursement rate. (EDC 8265)
7. Establishes adjustment factors to reimbursement rates for child care and development services, applied by multiplying the applicable adjustment factor by the provider agency’s reported child days of enrollment for the child(ren) to whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including, as specified: infants served in child day care centers; toddlers served in child day care centers; infants and toddlers served in family child care homes; children between the ages of 0 and 21 with exceptional needs; children between the ages of 0 and 21 with severe disabilities; children between the ages of 0 and 14 at risk of neglect, abuse, or exploitation; and limited-English-speaking and non-English-speaking children between 2 years of age and kindergarten age. Further, prohibits the days of enrollment for children who meet more than one adjustment-factor criteria from being adjusted more than once, and requires the increase in reimbursement amounts resulting from application of the adjustment factor(s) to be used to serve each child for whom an adjustment factor is claimed. (EDC 8265.5)
8. Establishes in federal law the Individuals with Disabilities Education Act (IDEA) to ensure the provision of free appropriate public education to children with disabilities that is tailored to meet their needs. (20 U.S.C. §1400 et seq.)
9. Requires through state and federal law that children with exceptional needs between the ages of three and five be provided with a free and appropriate education. (EC 56026)
10. Establishes under federal law the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families. (42 U.S.C. 601 et seq.)

FISCAL EFFECT: Unknown

COMMENTS: Need for the bill. According to the author:

“We need to increase the adjustment factors, but our work doesn’t stop there. There is also a need for new and updated inclusive early child care facilities. However, the cost associated with opening these new facilities often prevents them from happening, further contributing to the shortage of care. That is why the “Early Education Expansion Program” and the “Early Education Expansion Program for Local Educational Agencies” is so important. These startup funds can get inclusive early child care facilities up and running, and that is what we need. We also need to look out for California’s working families, with or without state-supported child care programs. For these families, access to licensed family child care is critical to their ability to maintain employment. This is especially true for the parents of infants and toddlers, those who work in jobs meeting the demands of our 24/7 economy, and those in rural communities. To help with access to family child providers, we need to codify and expand the “Family Child Care Recruitment and Training Fund”. Since 2008, California has seen a 26% drop in the number of licensed family child care homes, leaving only 27,500 of these small businesses open in the state. The fund will help address this problem by recruiting a new generation of family child care providers in California. AB 2292 will expand access to care for infants and toddlers, meaning parents now struggling to cobble together substandard care, or going without, can go to work confident that their children are supported and nurtured during the most critical developmental years in their lives”

This bill includes three initiatives to address the needs of California’s children and families for high quality early care and education by:

1. Addressing the need for children from 0 to 5 years with exceptional needs to access inclusive early care and education environments through the establishment of the Early Education Expansion Program providing one-time infrastructure grant funds to providers committing to serving children with exceptional needs. Grant funds may be used for facility, equipment, and professional development expenditures to increase the ability of child care sites and staff better meet the needs of young children with exceptional needs.
2. Providing opportunities to increase early learning infrastructure capacity to serve infants and toddlers from zero to three years of age in high-need communities through:
   1. Establishing the Early Education Expansion Program providing one-time infrastructure grant funds to support facility, equipment and professional development expenditures.
   2. Addressing the reimbursement rates associated with serving infants and toddlers by amending the adjustment factors in an attempt to more accurately reflect the actual cost of care.
3. Increasing the pool of family child care providers through the provision of funds to recruit, train and support new providers able to meet the needs of families for quality care in a home-based setting.

Each of these is discussed in more detail below.

1. Early Education Expansion Program for inclusive environments
2. Importance of inclusive early care and education environments. State and federal law require LEAs to provide services for preschool-age students with exceptional needs in a least restrictive environment. Federal guidance notes that the LEA responsible for providing education to a preschool child with a disability must ensure that services are provided in the least restrictive environment where the child’s unique needs can be met.

Research cites positive outcomes for children with disabilities and typically developing children in inclusive settings. Various studies have shown that children with disabilities perform as well or better in inclusive settings than in traditional special education settings. Researchers observed that the behavior of children with disabilities is positively affected by participation in activities and classrooms with typically developing children. They also note that the attitudes among typically developing children toward children with disabilities is also positively affected by participation in inclusive settings.

1. Increasing need for access to inclusive early care and education services. CDE data identifies that in 2005-06 there were 38,563 preschool age students with exceptional needs. In 2015 there were 46,596 such children - an increase of 21% over ten years. The increase in special education enrollment among children of other ages was 7% over the same time period.

Between 2005-06 and 2015-16 the number of preschool age children identified with Autism Spectrum Disability (ASD) increased from 4,845 to 10,688 – an increase of 121%. The next highest increase in that time period was among students identified as having Other Health Impairments, who increased from 1,270 to 1,913, a 51% increase. In 2005-06 children identified with ASD comprised 13% of preschool enrollment; in 2015-16 children with ASD represented nearly 23% of all preschoolers with exceptional needs.

Data from the Legislative Analyst’s Office (LAO) shows that in 2014-15, only 1 percent of children enrolled in CSPP were children with exceptional needs. Conversely, the proportion of children with exceptional needs enrolled in Head Start programs is 13 percent.

1. Attention to inclusive early care and education as an investment in later school success. The 2015 Statewide Task Force of Special Education noted that there is a severe shortage of general education preschool options which would provide these young children with exceptional needs with services in the least restrictive environment with their typically developing peers. They recommended that the state provide additional funds for facility modifications, professional learning opportunities for preschool staff, and increase the availability of “slots” in Least Restrictive Environments.
2. Recent actions to increase access to inclusive early care and education. While not proposing state support for special education preschool through special education funding, in the 2015-16 budget the Governor proposed giving priority to students with special needs in an expansion of state preschool. In the 2017-18 Governor’s Budget the Governor proposed to allow part‑day State Preschool programs to serve children with special needs from families above the income threshold, provided that all eligible children are served first.

The 2018-19 Governor’s Budget proposes $167 million to establish the Inclusive Early Education Expansion Program to provide one-time funding to increase access to subsidized inclusive early care and education programs for zero to five year-old children in high-need communities. These funds would have to be used for infrastructure costs only, including, but not limited to, adaptive facility renovations, adaptive equipment, and professional development.

This bill would assist both local education agencies (LEA) and other providers committing to serving children with exceptional needs with access to one-time infrastructure grant funds. These would be available for facility, equipment, professional development expenditures or other necessary infrastructure expenditures to increase the ability of child care sites and staff better meet the needs of young children with exceptional needs.

1. Early Education Expansion Program for Infant and Toddler Care
2. Need for access to early care and education for infants and toddlers. During the recession, over $1 billion was cut from California’s subsidized early care and education programs from 2007-08 to 2013-14. Since that time, as the economy has recovered the Legislature has begun to restore funding, however, much of the restoration has been in preschool settings serving three and four-year old children. The need for infant and toddler care remains largely unmet.

Recent data from the American Institute for Research demonstrates that a very small share of eligible infants and toddlers statewide are being served in subsidized programs:

The proportion of eligible infants and toddlers served varies throughout the state. For example, in Fresno and Tulare Counties, less than 3% of infants of less than one year are served in subsidized programs.

This bill establishes the Early Education Expansion Program for infant and toddler care and would provide one-time funds to both LEA and other providers to secure or adapt facilities, purchase equipment, and train staff to expand the overall capacity of the system to meet the unique needs of early care and education for infants and toddlers.

1. Increasing reimbursement rates for infant and toddler care. California’s subsidized early care and education programs recognize the varying costs of care of different groups of children. Current law specifies adjustment factors to reimbursement rates for child care services, applied by multiplying the applicable adjustment factor by the provider agency’s reported child days of enrollment for the children to whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including infants, toddlers, children with exceptional needs, children with severe disabilities; children at risk of neglect, abuse, or exploitation, and limited-English-speaking and non-English-speaking children.

This bill increases the adjustment factors for infants and toddlers regardless of the setting in an attempt to better reflect the actual costs of staffing to meet the mandated adult-child ratios, facility costs, as well as other expenses. The bill increases the adjustment rate for infants from 0 to 18 months from 1.7 to 2.44 regardless of the setting and the rate for toddlers from 18 to 36 months from 1.4 to 1.83 in all settings.

1. Family Child Care Recruitment and Training Program of 2018

Families often choose family child care settings to meet the needs of their children, particularly in the case of infant and toddler care as well as for those families who have a need for care in non-traditional hours, including evenings and weekends. The pool of family child care workers experienced significant decline through the recession and faces additional challenges due to pending retirements of many providers.

This bill would provide one-time funding to recruit, train and support family child care providers by building on the Child Care Initiative Project currently administered through the CDE and offered by local resource and referral agencies.

Similar and prior legislation. AB 2698 (Rubio) of this session defines early childhood mental health consultation service, declares Legislative intent encouraging the provision of such services in California state preschools and general child care and development programs, and requires, under certain circumstances, the application of a reimbursement rate adjustment factor for children served in programs where these services are provided. This bill is pending before this committee.

AB 2626 (Mullin) of this Session makes a number of statewide changes to subsidized child care and development programs, including raising the income eligibility threshold for families; changing the age restrictions for CSPP; providing opportunities for staff training; and increasing flexibility in the use of contracted funds. This bill is pending before this committee.

AB 47 (McCarty) of the 2015-16 Session would have established the Preschool for All Act of 2015 and required, on or before June 30, 2018, all eligible children who are not enrolled in transitional kindergarten to have access to the California State Preschool Program (CSPP) the year before they enter kindergarten, if their parents wish to enroll them and contingent upon the appropriation of sufficient funding in the annual Budget Act for this purpose. This bill was vetoed by the Governor.

AB 312 (O’Donnell) of this session creates a funding mechanism for state support of special education preschool and requires that special education funding rates be equalized to the 90th percentile after the Local Control Funding Formula is fully funded. This bill was held in Assembly Appropriations.

AB 104 (Assembly Committee on Budget), Chapter 13, Statutes of 2015, among a number of other things, required that reimbursement rate adjustment factors must apply to a full-day State Preschool program when reimbursement rates are above the full-day State Preschool rate.

AB 2286 (Bonilla) of the of the 2011-12 session, would have increased the reimbursement rate adjustment factors for infants and toddlers in child day care centers. This bill was held in the Assembly Appropriations Committee.

AB 3781 (Brulte), Chapter 588, Statutes of 1994, split the existing adjustment factor of 1.4 for children ages 0 to 36 months in child care centers into an adjustment factor of 1.7 for infants ages 0 to 18 months in centers and another adjustment factor of 1.4 for toddlers ages 18 to 36 months in centers, and specified an adjustment factor of 1.4 for children ages 0 to 36 months in family child care homes.

REGISTERED SUPPORT / OPPOSITION:

Support

2020 Mom

Advancement Project California

California Alternative Payment Program Association

California Association for the Education of Young Children

California Child Development Administrators Association

California Coalition for Equity in Early Care and Education

California Community Colleges Early Childhood Educators

California Federation of Teachers

California Kindergarten Association

California State Alliance of YMCAs

Child 360

Child Action Inc

Child Care Alliance of Los Angeles County

Child Care Resource Center

Child Development Resources of Ventura County

Children NOW

Children’s Council of San Francisco

Children’s Services Network

Chinatown Community Children’s Center

CoCo Kids

Common Sense Kids Action

Community Action Partnership of San Luis Obispo

Community Child Care Council of Alameda County

Concord Child Care Center

Congregation Beth Am

Crystal Stairs

Early Edge California

Easterseals California

Educational Enrichment Systems

FacesSF

First 5 Association of California

First 5 California

First 5 Humboldt

First 5 LA

First 5 Mono County

First 5 Placer County

First 5 Sacramento

First 5 San Bernadino

First 5 San Mateo County

First 5 Santa Clara County

First 5 Santa Cruz County

First 5 Sonoma County

FranDelja Enrichment Center

Go Kids Inc. of Gilroy

JVS

Kidango

League of Women Voters of California

Los Angeles County Office of Education

Mission Neighborhood Centers

Norco College

Options for Learning

Palo Alto Community Child Care

Peninsula Family Service

San Francisco Child Care Providers Association

San Francisco Human Services Agency

San Francisco Office of Early Care & Education

San Mateo County Child Care Partnership Council

Santa Clara County Office of Education

SEIU California

Strong Start of Santa Clara County

UDW/AFSCME Local 3930

United Ways of California

University of New England

Wu Yee Children’s Services

Zero to Three California

Two individuals

Opposition

None on file

Analysis Prepared by: Debbie Look / ED. / (916) 319-2087

Date of Hearing: April 10, 2018

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Blanca Rubio, Chair

ABPCA Bill Id:AB 2292 (

Author:Aguiar-Curry) – As Amended Ver:April 4, 2018

SUBJECT: Child care: reimbursement rates: start-up costs: grants

SUMMARY: Adopts a number of changes designed to increase capacity to serve young children in family child care homes, and across a variety of settings within the state subsidized child care system.

Specifically, this bill:

1. Makes Legislative findings and declarations related to the importance of the first three years of a child’s life and the availability of affordable child care during this period.
2. States Legislative intent to increase the state’s capacity to serve infants and toddlers in high-quality child care programs across California, through a variety of methods, as specified.
3. Establishes within the California Department of Education (CDE) the Family Child Care Recruitment and Training Program of 2018, to be administered by the Superintendent of Public Instruction, for purposes of supporting the recruitment and training of licensed family child care providers and stipulates that, upon appropriation by the Legislature, the program shall provide resources in accordance with the Child Care Initiative Project (CCIP) as established in current law and provide funding, services, and supports, as specified, to new family child care providers in the state.
4. Revises reimbursement rate adjustment factors for subsidized child care as follows:
   1. Deletes the adjustment factor specific to children between the ages of 0 and 36 months in family child care homes, and instead applies the separate adjustment factors for infants and toddlers to all applicable child care settings, versus child care centers as in current law;
   2. Increases the adjustment factor for infants who are between the ages of 0 and 18 months from 1.7 to 2.44; and
   3. Increases the adjustment factor for toddlers between the ages of 18 and 36 months from 1.4 to 1.83.
5. Makes Legislative findings and declarations related to the benefits of high-quality and inclusive early care and education and the need for increased classroom infrastructure capacity as a means to increase the state’s ability to provide this early care and education.
6. Establishes the Early Education Expansion Program in order to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.
7. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program and requires these funds to be available for encumbrance until June 30, 2023.
8. Requires an applicant for the Early Education Expansion Program to include, at a minimum, the following information in its application, as specified:
   1. A proposal for increasing access to subsidized early care and education programs in low-income, high-need communities for children up to five years old or for infants and toddlers;
   2. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period; and
   3. The inclusion of a set-aside of resources to invest in professional development of staff.
9. Requires Early Education Expansion Program grants to be awarded on a competitive basis, with priority given to applicants with a demonstrated need for expanded access, as specified, and to applicants that represent a consortium of local partners.
10. Requires Early Education Expansion Program grants to be used for one-time infrastructure costs only, as specified, and not for ongoing expenditures.
11. Requires Early Education Expansion Program expenditures to comply with federal statute governing Temporary Assistance for Needy Families (TANF).
12. Requires an Early Education Expansion Program grant recipient to commit to provide program data, as specified by CDE, as a condition of receiving grant funding.
13. Establishes the Early Education Expansion Program for Local Educational Agencies (LEAs) in order to increase access to inclusive early care and education programs and to increase early learning infrastructure capacity in high-need communities.
14. Requires CDE to use funds appropriated in the annual Budget Act or another statute to implement the Early Education Expansion Program for LEAs and requires these funds to be available for encumbrance until June 30, 2023.
15. Requires CDE’s Special Education Division and Early Education and Support Division to provide guidance to LEAs on serving young children in the least restrictive environment, as required by specified federal law.
16. Requires an applicant for the Early Education Expansion Program for LEAs to be an LEA and to include, at a minimum, the following information in its application, as specified:
    1. A proposal for increasing access to subsidized early care and education programs in low-income, high-need communities for children up to five years old or for infants and toddlers;
    2. A plan to fill and sustain subsidized spaces or programs created by grant funds beyond the grant period; and
    3. The identification of resources necessary to support lead agency professional development, as specified.
17. Prohibits anything in the provisions of the bill related to the Early Education Expansion Program for LEAs from prohibiting an LEA from applying on behalf of a consortium of providers within the LEA’s program area, as specified.
18. Requires Early Education Expansion Program for LEAs grants to be awarded on a competitive basis with priority given to:
    1. Applicants with a demonstrated need for expanded access, as specified;
    2. Applicants in low-income communities;
    3. Applicants that represent a consortium of local partners; and
    4. LEAs that demonstrate collaboration between special education and early education staff and that commit to serving a higher proportion of children with exceptional needs in the least restrictive environments, as specified.
19. Allows Early Education Expansion Program for LEAs grants to be used for one-time infrastructure costs only, as specified, and prohibits funds from being used for ongoing expenditures.
20. Requires an Early Education Expansion Program for LEAs grant recipient to commit to provide program data, as specified by the department, as a condition of receiving grant funding.

EXISTING LAW:

1. Establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents including a full range of supervision, health, and support services through full- and part-time programs. (EDC 8200 et seq.)
2. Defines “child care and development services” to mean services designed to meet a wide variety of children’s and families’ needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208 (j))
3. States the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs. (EDC 8202)
4. Requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified. (EDC 8240 and 8241)
5. Creates the California Child Care Initiative Project as a project to expand the role and functions of selected resource and referral agencies in activities to aid communities in increasing their capability in the number of child care spaces available and the quality of child care services offered. (EDC 8215)
6. Requires the Superintendent of Public Instruction to implement a plan that establishes reasonable standards and assigned reimbursement rates for child care and development services, to vary by length of program year and hours of service, and establishes amounts for, and provides for an annual cost-of-living adjustment to, the standard reimbursement rate. (EDC 8265)
7. Establishes adjustment factors to reimbursement rates for child care and development services, applied by multiplying the applicable adjustment factor by the provider agency’s reported child days of enrollment for the child(ren) to whom the adjustment factor applies, in order to reflect the additional expense of serving children of specific ages and with certain needs including, as specified: infants served in child day care centers; toddlers served in child day care centers; infants and toddlers served in family child care homes; children between the ages of 0 and 21 with exceptional needs; children between the ages of 0 and 21 with severe disabilities; children between the ages of 0 and 14 at risk of neglect, abuse, or exploitation; and limited-English-speaking and non-English-speaking children between 2 years of age and kindergarten age. Further, prohibits the days of enrollment for children who meet more than one adjustment-factor criteria from being adjusted more than once, and requires the increase in reimbursement amounts resulting from application of the adjustment factor(s) to be used to serve each child for whom an adjustment factor is claimed. (EDC 8265.5)
8. Establishes in federal law the Individuals with Disabilities Education Act (IDEA) to ensure the provision of free appropriate public education to children with disabilities that is tailored to meet their needs. (20 U.S.C. §1400 et seq.)
9. Establishes under federal law the Temporary Assistance for Needy Families (TANF) program to provide aid and welfare-to-work services to eligible families. (42 U.S.C. 601 et seq.)

FISCAL EFFECT: Unknown.

COMMENTS:

Subsidized child care: Many low- to middle-income working families spend a significant portion of their income on child care. The statewide average cost of child care in a family child care home for an infant in 2014 was $8,462 ($705 per month); for child care centers, this annual cost was even higher at $13,327 ($1,111 per month). And, it would follow, the amount paid for child care is even more in higher-cost areas of the state: in San Francisco, the 2014 cost of family child care for an infant was $12,118 ($1,010 per month) and for center care, it was $17,534 ($1,461 per month).

California’s subsidized child care system is designed to assist families with parents or guardians who are working, in training, seeking employment, homeless, incapacitated, or in need of respite. Depending on the program, subsidized child care can be obtained through three main types of providers: licensed child care centers, licensed family child care homes, and license-exempt providers (for example, family members, neighbors, or friends). This child care is available through a number of programs; additionally, California offers State Preschool Programs to eligible three-and four-year-olds. The three main subsidized child care programs are:

• California Work Opportunity and Responsibility to Kids (CalWORKs), for parents who receive or have received CalWORKs. CalWORKs child care is paid for using vouchers and can be provided in either centers, family child care homes, or license-exempt settings;
• Alternative Payment Programs (APPs), a voucher-based system of care, which allows families to choose their own child care in either centers, family child care homes, or license-exempt settings; and
• General Child Care, which is provided through contracted centers and family child care home networks that are administered through private or public agencies and offer child care and education/development services.

In Fiscal Year 2017-18, there are approximately 187,000 subsidized child care slots offered across the various programs, as well as over 165,000 State Preschool (101,000 part-day and 65,000 full-day) and 83,000 Transitional Kindergarten slots. Families are typically eligible for subsidized child care if they meet specified requirements and income qualifications, including: parents have a need related to work, training, or education; children are under 13 years old (or under 22 years old if they have exceptional needs), and parents earn incomes less than 70% of the most recent state median income (SMI) when first applying – up to $52,076 per year for a family of 3 – and less than 85% of the most recent SMI – up to $63,235 per year for a family of 3 – when renewing eligibility.

Family child care homes: The Community Care Licensing Division (CCLD) within the Department of Social Services (DSS) regulates and oversees various licensed child care facilities in the state, including family child care homes. Licensed family child care homes must be in a provider’s own home and provide a home-like environment. As of June 30, 2017, there were 28,679 licensed family day care homes in the state, with the capacity to serve 298,026 children.

Home-based care can be especially important for families with lower incomes, who are more likely to work nontraditional work hours and have a need for care providers offering flexible schedules on nights and weekends. For example, United States Department of Labor data from 2013 demonstrated that four out of every 10 people classified as “working poor” – i.e., individuals spending at least 27 weeks in the labor force yet still earning incomes below the federal poverty level – worked in service occupations. Service sector jobs can often involve nontraditional and less predictable work schedules. Correspondingly, family child care homes are more likely to serve the needs of families with parents that work nontraditional hours. The California Child Care Resource and Referral Network reports that, in 2014, 39% of licensed family child care homes in California offered evening, overnight, and/or weekend care, while only 2% of child care centers did the same.

Reimbursement rates and adjustment factors: Rates are paid to providers of subsidized child care according to two different sets of schedules. Voucher-based care provides vouchers to families to access child care through their choice of a licensed day care center, a licensed family child care home, or license-exempt child care (typically, care provided by a family, friend, or neighbor who has passed a background check). Providers are reimbursed based on a biannual regional market rate (RMR) survey of the cost of child care in various geographical regions across the state; rate ceilings are then determined by applying a certain percentile to the RMR for each county. In 2018, the ceiling for licensed providers is the higher of the 75^th percentile of the 2016 RMR survey or the RMR ceiling for a county as of December 31, 2017; beginning on January 1, 2019, the RMR ceiling will be established at the 75^th percentile of the 2016 RMR survey for a county. (The RMR ceilings for license-exempt providers are set at the 70^th percentile of a county’s established RMR ceiling for family child care homes.)

Child care and development programs and state preschool programs that contract directly with CDE, as opposed to voucher-based care, are reimbursed according to a uniform statewide rate system based on the standard reimbursement rate (SRR). The fiscal year (FY) 2017-18 SRR for General Child Care is $45.44 per child day of enrollment or $11,360 per year based on 250 days of operation. However, in recognition of the higher costs associated with providing care to certain populations, state law (Education Code Section 8265.5) provides for “adjustment factors” to be multiplied by child days of enrollment to arrive at an adjusted, higher SRR for the provision of care to each child who meets one of the adjustment factor criteria. The following table shows the seven allowable adjustment factors and adjusted SRRs.

FY 2017-18 Adjustment Factors and Adjusted SRRs

Child care for infants and toddlers: All licensed child care providers are required to comply with state Title 22 regulations developed by the Department of Social Services and pertaining to the licensure and oversight of community care facilities. Child care and development programs and state preschool programs that contract directly with CDE are also required to comply with state Title 5 regulations. Developed by CDE, these regulations define operations requirements for programs that receive child care services funds from the department. Among many other requirements, Title 5 regulations (5 CCR § 18290) stipulate staffing ratios for child care and development programs as follows:

As described earlier, infant care and toddler care are reimbursed at higher rates (by applying an adjustment factor to the SRR of 1.7 and 1.4, respectively) in recognition of the higher cost of providing this care. This higher cost is largely due to the lower staffing ratios required for younger children. Providers of care for infants must have one adult for every three children, while providers of care for preschool-age children can have up to eight children per adult. Therefore, some stakeholders contend that the reimbursement rate adjustment factors for infants and toddlers don’t make up for the higher cost of fulfilling staffing ratios and providing care.

The expense of providing infant and toddler care, in turn, may be one significant contributor to the lack of an ample supply of this care throughout the state. Older data indicate that that, between 2008 and 2013, infants and toddlers served in Title 5 General Child Care declined from 17,036 to 10,513. The following table shows the number of infants and toddlers served in General Child Care in more recent years:

Infants and Toddlers served under Title 5 General Child Care in California

The number of infants and toddlers served across subsidized child care programs as of April 2017 was 33,628 (9,335 infants and 24,293 toddlers). The number of children served is only a portion of those eligible. A 2017 report from the Learning Policy Institute entitled “Understanding California’s early care and education system” pointed to the lack of subsidized care across California’s early care and education (ECE) system and noted the following:

“The problem of unmet need is particularly acute when looking at children birth to age 3. Approximately 14% of infants and toddlers are enrolled in publicly subsidized programs – a large portion of whom are in family child care homes or license-exempt care. Over 430,000 eligible families who are in poverty or who work in low-wage jobs do not have access to subsidized ECE programs for their infants and toddlers. This number is closer to 570,000 when taking into account the many children who are income eligible but do not qualify.”

Need for this bill: According to the author of this bill, “We need to increase the adjustment factors, but our work doesn’t stop there. There is also a need for new and updated state preschool program classrooms and centers. However, the cost associated with opening these new facilities often prevents them from happening, further contributing to the shortage of care. That is why the ‘Classroom Planning and Implementation Grant Program’ is so important. These startup funds can get a classroom/center up and running, and that is what we need. We also need to look out for California’s working families, with or without state-supported child care programs. For these families, access to licensed family child care is critical to their ability to maintain employment. This is especially true for the parents of infants and toddlers, those who work in jobs meeting the demands of our 24/7 economy, and those in rural communities. To help with access to family child providers, we need to codify and expand the ‘Family Child Care Recruitment and Training Fund.’ Since 2008, California has seen a 26% drop in the number of licensed family child care homes, leaving only 27,500 of these small businesses open in the state. The fund will help address this problem by recruiting a new generation of family child care providers in California. [This bill] will expand access to care for infants and toddlers, meaning parents now struggling to cobble together substandard care, or going without, can go to work confident that their children are supported and nurtured during the most critical developmental years in their lives.”

RELATED AND PRIOR LEGISLATION:

AB 2698 (Rubio), 2018, defines early childhood mental health consultation service, declares Legislative intent encouraging the provision of such services in California state preschools and general child care and development programs, and requires, under certain circumstances, the application of a reimbursement rate adjustment factor for children served in programs where these services are provided. It is scheduled to be heard in the Assembly Human Services Committee on April 10, 2018.

AB 104 (Assembly Committee on Budget), Chapter 13, Statutes of 2015, among a number of other things, required that reimbursement rate adjustment factors must apply to a full-day State Preschool program when reimbursement rates are above the full-day State Preschool rate.

AB 2286 (Bonilla), 2012, would have increased the reimbursement rate adjustment factors for infants and toddlers in child day care centers. It died in the Assembly Appropriations Committee.

AB 3781 (Brulte), Chapter 588, Statutes of 1994, split the existing adjustment factor of 1.4 for children ages 0 to 36 months in child care centers into an adjustment factor of 1.7 for infants ages 0 to 18 months in centers and another adjustment factor of 1.4 for toddlers ages 18 to 36 months in centers, and specified an adjustment factor of 1.4 for children ages 0 to 36 months in family child care homes.

DOUBLE REFERRAL. This bill has been double-referred. Should this bill pass out of this committee, it will be referred to the Assembly Education Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

2020 Mom

California Alternative Payment Program Association

California Child Development Administrators Association (co-sponsor)

California Community Colleges Early Childhood Educators

California Council of Community Behavioral Health Agencies

California Federation of Teachers

California Kindergarten Association

California State Alliance of YMCAs

Central Valley Children’s Services Network

Child 360

Child Action, Inc.

Child Care Alliance of Los Angeles County (co-sponsor)

Child Care Resource Center (co-sponsor)

Child Development Resources of Ventura County, Inc.

Children Now

Children’s Council of San Francisco

Children’s Services Network

Choices for Children

Common Sense Kids Action

Community Action Partnership of San Luis Obispo, Inc.

Community Child Care Council (4Cs) of Alameda County

Equal Start ECE Initiative

Fight Crime: Invest in Kids

Mission: Readiness

Ready Nation

First 5 Association of California

First 5 California, co-sponsor

First 5 Humboldt

First 5 LA

First 5 Mono County

First 5 Placer Children and Families Commission

First 5 Sacramento County

First 5 San Bernardino County

First 5 San Francisco

First 5 San Mateo County

First 5 Santa Clara County

First 5 Santa Cruz County

First 5 Sonoma County

First 5 Ventura County

Go Kids, Inc. of Gilroy

Kidango

Laura Schewel, an Individual

League of Women Voters California

National Association of Social Workers, CA Chapter

Options for Learning

Palo Alto Community Child Care

Santa Clara County Office of Education

SEIU California

UDW/AFSCME Local 3930

United Ways of California

University of New England

Zero to Three

5 members of Strong Start Coalition

Opposition

None on file.

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089