Today's Law As Amended

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SB-174 Early childhood education: reimbursement rates.(2019-2020)



SEC. 6.SECTION 1.

 Section 8357 of the Education Code is amended to read:

8357.
 (a) The cost of child care  childcare  services provided under this article shall be governed by regional market rates. Recipients of child care  childcare  services provided pursuant to this article shall be allowed to choose the child care  childcare  services of licensed child care  childcare  providers or child care  childcare  providers who are, by law, not required to be licensed, and the cost of that child care  childcare  shall be reimbursed by counties or agencies that contract with the department if the cost is within the regional market rate. For purposes of this section, “regional market rate” means care costing no more than 1.5 market standard deviations above the mean cost of care for that region. It is the intent of the Legislature to reimburse child care  childcare  providers at the 85th percentile of the most recent regional market rate survey.
(b) The regional market rate ceilings shall be established at the greater of either of the following:
(1) The 75th percentile of the 2016 2018  regional market rate survey for that region.
(2) The regional market rate ceiling that existed in that region on December 31, 2017.
(c) Reimbursement to license-exempt child care  childcare  providers shall not exceed 70 percent of the family child care  childcare  home rate established pursuant to subdivision (b).
(d) Reimbursement to child care  childcare  providers shall not exceed the fee charged to private clients for the same service.
(e) Reimbursement shall not be made for child care  childcare  services when care is provided by parents, legal guardians, or members of the assistance unit.
(f) A child care  childcare  provider located on an Indian reservation or rancheria and exempted from state licensing requirements shall meet applicable tribal standards.
(g) For purposes of this section, “reimbursement” means a direct payment to the provider of child care  childcare  services, including license-exempt childcare  providers. If care is provided in the home of the recipient, payment may be made to the parent as the employer, and the parent shall be informed of his or her  the parent’s  concomitant legal and financial reporting requirements. To allow time for the development of the administrative systems necessary to issue direct payments to providers, for a period not to exceed six months from the effective date of this article, a county or an alternative payment agency contracting with the department may reimburse the cost of child care  childcare  services through a direct payment to a recipient of aid rather than to the child care  childcare  provider.
(h) Counties and alternative payment programs shall not be bound by the rate limits described in subdivisions (a) and (b), when there are, in the region, no more than two child care  childcare  providers of the type needed by the recipient of child care  childcare  services provided under this article.
(i) (1) Notwithstanding any other law, reimbursements to child care  childcare  providers based upon a daily rate may only be authorized under either of the following circumstances:
(A) A family has an unscheduled but documented need of six hours or more per occurrence, such as the parent’s need to work on a regularly scheduled day off, that exceeds the certified need for child care. childcare. 
(B) A family has a documented need of six hours or more per day that exceeds no more than 14 days per month. In no event shall reimbursements  Reimbursements  to a childcare  provider based on the daily rate over one month’s time shall not  exceed the childcare  provider’s equivalent full-time monthly rate or applicable monthly ceiling.
(2) This subdivision shall does  not limit providers from being reimbursed for services using a weekly or monthly rate, pursuant to subdivision (c) of Section 8222.
(j) Notwithstanding any other law, the changes made to paragraph (1) of subdivision (b) of this section that became effective on January 1, 2020, shall not be operative unless an appropriation is made for those purposes in the annual Budget Act or any other statute.
(k) This section shall remain in effect only until January 1, 2021, and as of that date is repealed.

SEC. 2.

 Section 8357 is added to the Education Code, to read:

8357.
 (a) The cost of childcare services provided under this article shall be governed by regional market rates. Recipients of childcare services provided pursuant to this article shall be allowed to choose the childcare services of licensed childcare providers or childcare providers who are, by law, not required to be licensed, and the cost of that childcare shall be reimbursed by counties or agencies that contract with the department if the cost is within the regional market rate. For purposes of this section, “regional market rate” means care costing no more than 1.5 market standard deviations above the mean cost of care for that region. It is the intent of the Legislature to reimburse childcare providers at the 85th percentile of the most recent regional market rate survey.
(b) The regional market rate ceilings shall be established at the greater of either of the following:
(1) The 85th percentile of the 2018 regional market rate survey for that region.
(2) The regional market rate ceiling that existed in that region on December 31, 2017.
(c) Reimbursement to license-exempt childcare providers shall not exceed 70 percent of the commensurate rate, such as hourly, daily, weekly, and monthly, for both full-time and part-time care established pursuant to subdivision (b).
(d) Reimbursement to childcare providers shall not exceed the fee charged to private clients for the same service.
(e) Reimbursement shall not be made for childcare services when care is provided by parents, legal guardians, or members of the assistance unit.
(f) A childcare provider located on an Indian reservation or rancheria and exempted from state licensing requirements shall meet applicable tribal standards.
(g) For purposes of this section, “reimbursement” means a direct payment to the provider of childcare services, including license-exempt childcare providers. If care is provided in the home of the recipient, payment may be made to the parent as the employer, and the parent shall be informed of the parent’s concomitant legal and financial reporting requirements. To allow time for the development of the administrative systems necessary to issue direct payments to providers, for a period not to exceed six months from the effective date of this article, a county or an alternative payment agency contracting with the department may reimburse the cost of childcare services through a direct payment to a recipient of aid rather than to the childcare provider.
(h) Counties and alternative payment programs shall not be bound by the rate limits described in subdivisions (a) and (b) when there are, in the region, no more than two childcare providers of the type needed by the recipient of childcare services provided under this article.
(i) (1)   Notwithstanding any other law, reimbursements to childcare providers based upon a daily rate may only be authorized under either of the following circumstances:
(A) A family has an unscheduled but documented need of six hours or more per occurrence, such as the parent’s need to work on a regularly scheduled day off, that exceeds the certified need for childcare.
(B) A family has a documented need of six hours or more per day that exceeds no more than 14 days per month. Reimbursements to a childcare provider based on the daily rate over one month’s time shall not exceed the childcare provider’s equivalent full-time monthly rate or applicable monthly ceiling.
(2) This subdivision does not limit providers from being reimbursed for services using a weekly or monthly rate, pursuant to subdivision (c) of Section 8222.
(j) (1) Except as provided in paragraph (2), this section shall become operative on January 1, 2021.
(2) Notwithstanding any other law, this section shall not be operative unless an appropriation is made for those purposes in the annual Budget Act or any other statute. If no appropriation is made, this section as it existed on December 31, 2019, shall be operative.

SEC. 8.SEC. 3.

 Section 8447 of the Education Code is amended to read:

8447.
 (a) The Legislature hereby finds and declares that greater efficiencies may be achieved in the execution of state subsidized child care  childcare  and development program contracts with public and private agencies by the timely approval of contract provisions by the Department of Finance, the Department of General Services, and the department and by authorizing the department to establish a multiyear application, contract expenditure, and service review as may be necessary to provide timely service while preserving audit and oversight functions to protect the public welfare.
(b) (1) The Department of Finance and the Department of General Services shall approve or disapprove annual contract funding terms and conditions, including both family fee schedules and regional market rate schedules that are required to be adhered to by contract, and contract face sheets submitted by the department not more than 30 working days from the date of submission, unless unresolved conflicts remain between the Department of Finance, the department, and the Department of General Services. The department shall resolve conflicts within an additional 30 working day time period. Contracts and funding terms and conditions shall be issued to child care  childcare  contractors no later than June 1. Applications for new child care  childcare  funding shall be issued not more than 45 working days after the effective date of authorized new allocations of child care  childcare  moneys.
(2) Notwithstanding paragraph (1), the department shall implement the regional market rate schedules based upon the county aggregates, as specified in Section 8357 and the annual Budget Act.
(3) It is the intent of the Legislature to fully fund the third stage of child care  childcare  for former CalWORKs recipients.
(c) With respect to subdivision (b), it is the intent of the Legislature that the Department of Finance annually review contract funding terms and conditions for the primary purpose of ensuring consistency between child care  childcare  contracts and the child care  childcare  budget. This review shall include evaluating any proposed changes to contract language or other fiscal documents to which the contractor is required to adhere, including those changes to terms or conditions that authorize higher reimbursement rates, modify related adjustment factors, modify administrative or other service allowances, or diminish fee revenues otherwise available for services, to determine if the change is necessary or has the potential effect of reducing the number of full-time equivalent children that may be served.
(d) Alternative payment child care  childcare  systems, as set forth in Article 3 (commencing with Section 8220), shall be subject to the rates established in the Regional Market Rate Survey of California Child Care Providers for provider payments. The department shall contract to conduct and complete a regional market rate survey no more frequently than once every two years, consistent with federal regulations, with a goal of completion by March 1. Providers, pursuant to subdivision (g), for provider payments. 
(e) By March December  1 of each year, the Department of Finance shall provide to the department the state median income amount for a four-person household in California using the methodology provided in subdivision (c) of Section 8263.1. The department shall adjust its fee schedule for child care  childcare  providers to reflect this updated state median income; however, no  changes based on revisions to the state median income amount shall not  be implemented midyear.
(f) Notwithstanding the June 1 date specified in subdivision (b), changes to the regional market rate schedules and fee schedules may be made at any other time to reflect the availability of accurate data necessary for their completion, provided these documents receive the approval of the Department of Finance. The Department of Finance shall review the changes within 30 working days of submission and the department shall resolve conflicts within an additional 30 working day period. Contractors shall be given adequate notice before the effective date of the approved schedules. It is the intent of the Legislature that contracts for services not be delayed by the timing of the availability of accurate data needed to update these schedules.
(g) (1) The department shall contract to conduct and complete a regional market rate survey no more frequently than once every two years, with a goal of completion by December 1.
(2) The department shall update the regional market rate survey methodology to include:
(A) Age ranges and hours of service ranges pursuant to Section 8265.
(B) Direction for the survey to mitigate the impact of contractors located in deep-poverty census tracts on the market profile or county rate.
(h) The department shall create a Quality Counts California Pilot Reimbursement Program upon an appropriation made for these purposes in the annual Budget Act. It is the intent of the Legislature that the pilot program allow childcare providers subject to rates under this section to receive higher reimbursement rates, consistent with Section 8265, and to meet higher quality standards for child development, consistent with Sections 8203, 8208, 8244, 8261, 8264.7, 8360, and 8360.1, and any regulations adopted thereunder.
(1) The department shall establish and measure quality standards consistent with Sections 8203, 8208, 8244, 8261, 8264.7, 8360, and 8360.1, and any regulations adopted thereunder for childcare providers participating in the pilot program. These quality standards shall be met for pilot participation.
(2) The department shall select up to five alternative payment program childcare systems, as set forth in Article 3 (commencing with Section 8220), to participate in the pilot program. The department shall select alternative payment program childcare systems to participate that represent the broad geographic diversity of the state.
(3) Each alternative payment program childcare system selected by the department to participate in the pilot program shall allow licensed childcare providers serving at least a majority of children receiving subsidized childcare services pursuant to Article 3 (commencing with Section 8220) and Article 15.5 (commencing with Section 8350) to participate.
SEC. 4.
 This act shall become operative only if Assembly Bill 125 of the 2019–20 Regular Session is enacted and becomes effective on or before January 1, 2020.