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Home/Bills/SB 1110California · 2025–2026 Regular Session
Senate BillIntroducedEducation

SB 1110: Early learning and care: rates.

California · Senate · 2025–2026 Regular Session · last verified June 1, 2026

What SB 1110 does, verified June 1, 2026

<p>The bill amends existing laws regarding childcare and development services for children up to age 13. It expands authorization for reimbursement to include direct program and support costs of alternative payment programs. The term "administrative and support services costs" is replaced with "indirect administrative costs," which cannot exceed 15% of the maximum reimbursable contract amount. Additionally, the combined costs of direct program and support costs plus indirect administrative costs are capped at 25% of the contract amount. If this total falls below $300,000, reimbursement must be at least $300,000.</p>

Bill journey
1IntroducedCurrent
2In CommitteePending
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4Second ChamberPending
5GovernorPending
6ChapteredPending
Last action: May 14 hearing: Held in committee and under submission. (2026-05-14)Alert me
Author and sponsors
Sen. Josh BeckerAuthor · California State Senate
Full contact details, staff, and committees with Connect, $16/moUnlock
Recent actions13 total · showing 5
May. 14, 2026May 14 hearing: Held in committee and under submission.
May. 08, 2026Set for hearing May 14.
May. 04, 2026May 4 hearing: Placed on APPR. suspense file.
Apr. 24, 2026Set for hearing May 4.
Apr. 22, 2026From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0. Page 4007.) (April 22). Re-referred to Com. on APPR.
Full action history, 8 earlier actionsConnect Plus
Latest bill textAmended version, April 13, 2026 · 9,302 words

Amended IN Senate April 13, 2026
Amended IN Senate March 25, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill
No. 1110

Introduced by Senator Becker

February 17, 2026

An act to amend Sections 8205 and 8245.5 Section 8205 of the Education Code, and to amend Sections 10213.5, 10229, and 10280 10213.5 and 10229 of the Welfare and Institutions Code, relating to early development.


LEGISLATIVE COUNSEL'S DIGEST


SB 1110, as amended, Becker. Early learning and care: rates.
Existing law establishes a system of childcare and development services, administered by the State Department of Social Services, for children from infancy to 13 years of age. Existing law authorizes, upon departmental approval, the use of appropriated funds for alternative payment programs to allow for maximum parental choice. Existing law authorizes the reimbursement to those programs for the cost of childcare paid to childcare providers and the administrative and support services costs of the alternative program. Existing law prohibits the total cost for administration and support services from exceeding 17.5% of the total contract amount.
This bill would expand the authorization for reimbursement to include the direct program and support costs, as defined, of the alternative program. The bill would replace the term “administrative and support services costs” with “indirect administrative costs,” as defined, and prohibit the indirect administrative costs from exceeding 15% of the maximum reimbursable amount of the contract, and further prohibit the combined costs of direct program and support costs and indirect administrative costs from exceeding 25%. If 25% of the maximum reimbursable amount of the contract falls below $300,000, the bill would require the minimum reimbursement to be $300,000.

Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs. Existing law requires, for California state preschool programs and childcare and development programs, the State Department of Education and the State Department of Social Services to collaborate to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates. Existing law requires, commencing July 1, 2026, the contract reimbursement to be based on the lesser of the maximum reimbursable amount stated in the contract, the net reimbursable program costs, or the product of the adjusted child days of enrollment for certified children times the contract rate.

This bill would instead provide, commencing July 1, 2026, for California state preschool programs and center-based childcare and development programs, that if the program or center has maintained at least 85% of its certified daily enrollment, it will be reimbursed the maximum reimbursable amount stated in the contract. The bill would provide if the program or center has not maintained at least 85% of its certified daily enrollment, reimbursement would be based on the lesser of either the net reimbursable program costs or the product of the adjusted child days of enrollment for certified children times the contract rate. The bill would require, if a California state preschool program contractor has not maintained 85% of its certified daily enrollment for 3 consecutive years, and continues to have less than 85% of their certified daily enrollment, the State Department of Education to place the contractor on conditional contract status unless the contractor provides clear evidence of progress towards full enrollment.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

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


SECTION 1.

Section 8205 of the Education Code, as amended by Section 1 of Chapter 73 of the Statutes of 2024, is amended to read:

8205.

As used in this chapter:
(a) “Applicant or contracting agency” means a school district, community college district, college or university, county superintendent of schools, county, city, public agency, private nontax-exempt agency, private tax-exempt agency, or other entity that is authorized to establish, maintain, or operate services pursuant to this chapter. Private agencies and parent cooperatives, duly licensed by law, shall receive the same consideration as any other authorized entity with no loss of parental decisionmaking prerogatives as consistent with the provisions of this chapter.
(b) “Assigned reimbursement rate” is that rate established by the contract with the agency in accordance with Section 8242.
(c) “Attendance” means the number of children present at a preschool facility. “Attendance,” for purposes of reimbursement, includes excused absences by children because of illness, quarantine, illness or quarantine of their parent, family emergency, or to spend time with a parent or other relative as required by a court of law or that is clearly in the best interest of the child.
(d) “Capital outlay” means the amount paid for the renovation and repair of childcare and development and preschool facilities to comply with state and local health and safety standards, and the amount paid for the state purchase of relocatable childcare and development and preschool facilities for lease to qualifying contracting agencies.
(e) “Preschool facility” means a residence or building or part thereof in which preschool services are provided.
(f) “Early childhood programs” means those programs that offer a full range of services for children from infancy to 13 years of age, for any part of a day, by a public, private, or proprietary agency, in centers and family childcare homes.
(g) “Children at risk of abuse, neglect, or exploitation” means children who are so identified in a written referral from a legal, medical, or social service agency, or emergency shelter.
(h) “Children with exceptional needs” means either of the following:
(1) Children under three years of age who have been determined to be eligible for early intervention services pursuant to the California Early Intervention Services Act (Title 14 (commencing with Section 95000) of the Government Code) and its implementing regulations. These children include an infant or toddler with a developmental delay or established risk condition, or who is at high risk of having a substantial developmental disability, as defined in subdivision (a) of Section 95014 of the Government Code. These children shall have active individualized family service plans and shall be receiving early intervention services.
(2) Children 3 to 21 years of age, inclusive, who have been determined to be eligible for special education and related services by an individualized education program team according to the special education requirements contained in Part 30 (commencing with Section 56000) of Division 4 of Title 2, and who meet eligibility criteria described in Section 56026 and, Article 2.5 (commencing with Section 56333) of Chapter 4 of Part 30 of Division 4 of Title 2, and Sections 3030 and 3031 of Title 5 of the California Code of Regulations. These children shall have an active individualized education program and shall be receiving early intervention services or appropriate special education.
(i) “Cost” includes, but is not limited to, expenditures that are related to the operation of preschool programs. “Cost” may include a reasonable amount for state and local contributions to employee benefits, including approved retirement programs, agency administration, and any other reasonable program operational costs. “Cost” may also include amounts for licensable facilities in the community served by the program, including lease payments or depreciation, downpayments, and payments of principal and interest on loans incurred to acquire, rehabilitate, or construct licensable facilities, but these costs shall not exceed fair market rents existing in the community in which the facility is located. “Reasonable and necessary costs” are costs that, in nature and amount, do not exceed what an ordinary prudent person would incur in the conduct of a competitive business.
(j) “Elementary school,” as contained in former Section 425 of Title 20 of the United States Code (the National Defense Education Act of 1958, Public Law 85-864, as amended), includes early childhood education programs and all child development programs, for the purpose of the cancellation provisions of loans to students in institutions of higher learning.
(k) “Family childcare home education network” means an entity organized under law that contracts with the department to make payments to licensed family childcare home providers and to provide educational and support services to those providers and to children and families eligible for California state preschool program services.
(l) “Health services” include, but are not limited to, all of the following:
(1) Referral, whenever possible, to appropriate health care providers able to provide continuity of medical care.
(2) Health screening and health treatment, including a full range of immunization recorded on the appropriate state immunization form to the extent provided by the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code) and the Child Health and Disability Prevention Program (Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code), but only to the extent that ongoing care cannot be obtained utilizing community resources.
(3) Health education and training for children, parents, staff, and providers.
(4) Followup treatment through referral to appropriate health care agencies or individual health care professionals.
(m) “Higher educational institutions” means the Regents of the University of California, the Trustees of the California State University, the Board of Governors of the California Community Colleges, and the governing bodies of any accredited private nonprofit institution of postsecondary education.
(n) “Intergenerational staff” means persons of various generations.
(o) “Dual language learner children” means children whose first language is a language other than English or children who are developing two or more languages, one of which may be English.
(p) “Parent” means a biological parent, stepparent, adoptive parent, foster parent, caretaker relative, or any other adult living with a child who has responsibility for the care and welfare of the child.
(q) “Program director” means a person who, pursuant to Section 8298, is qualified to serve as a program director.
(r) “Proprietary agency” means an organization or facility providing preschool, which is operated for profit.
(s) “Children with severe disabilities” are children with exceptional needs from birth to 21 years of age, inclusive, who require intensive instruction and training in programs serving pupils with the following profound disabilities: autism, blindness, deafness, severe orthopedic impairments, serious emotional disturbances, or severe intellectual disabilities. “Children with severe disabilities” also include those individuals who would have been eligible for enrollment in a developmental center for handicapped pupils under Chapter 6 (commencing with Section 56800) of Part 30 of Division 4 of Title 2 as it read on January 1, 1980.
(t) (1) “Site supervisor” means a person who, regardless of their title, has operational program responsibility for an early childhood program at a single site.
(2) A site supervisor shall satisfy one of the following:
(A) Hold a permit issued by the Commission on Teacher Credentialing that authorizes supervision of a childcare and development program operating in a single site.
(B) Hold an administrative credential or an administrative services credential issued by the Commission on Teacher Credentialing.
(C) Meet the qualifications of a program director under Section 8298.
(3) The Superintendent may waive the requirements of this subdivision if the Superintendent determines that the existence of compelling need is appropriately documented.
(u) “Standard reimbursement rate” means the reimbursement rate applicable to California state preschool programs pursuant to Section 8242.
(v) “Startup costs” means those expenses an agency incurs in the process of opening a new or additional facility before the full enrollment of children.
(w) “California state preschool program” means those programs that offer part-day or full-day, or both, educational programs for eligible two-, three-, and four-year-old children. These programs may be offered by a public, private, or proprietary agency, and operated in childcare centers or family childcare homes operating through a family childcare home education network.
(x) “Support services” means those services that, when combined with preschool services, help promote the healthy physical, mental, social, and emotional growth of children. Support services may include, but are not limited to: protective services, parent training, provider and staff training, transportation, parent and child counseling, child development resource and referral services, and child placement counseling.
(y) “Teacher” means a person with the appropriate permit issued by the Commission on Teacher Credentialing who provides program supervision and instruction that includes supervision of a number of aides, volunteers, and groups of children.
(z) “Underserved area” means a county or subcounty area, including, but not limited to, school districts, census tracts, or ZIP Code areas, where the ratio of publicly subsidized preschool program services to the need for these services is low, as determined by the Superintendent.
(aa) “Three-year-old children” means children who will have their third birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program. Children who have their third birthday on or after December 2 of the fiscal year, may be enrolled in a California state preschool program on or after their third birthday. Any child under four years of age shall be served in a California state preschool program facility, licensed in accordance with Title 22 of the California Code of Regulations.
(ab) “Two-year-old children” means children who have had their second birthday and do not otherwise meet the definition of “three-year-old children.”
(ac) “Four-year-old children” means children who will have their fourth birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program, or a child whose fifth birthday occurs after September 1 of the fiscal year in which they are enrolled in a California state preschool and whose parent or guardian has opted to retain or enroll them in a California state preschool program.
(ad) “Homeless children and youth” has the same meaning as defined in Section 11434a(2) of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.).
(ae) “Local educational agency” means a school district, a county office of education, a community college district, or a school district acting on behalf of one or more schools within the school district.
(af) “Funded enrollment” means the number of subsidized children funded to be enrolled, based on the maximum reimbursable amount, contract rate, inclusive of any adjustment factors, and approved program calendar, by a California state preschool program contractor.
(ag) (1) Effective no later than March 1, 2024, “part-time” means preschool services certified for a child for fewer than 25 hours per week.
(2) Effective no later than March 1, 2024, “full-time” means preschool services certified for a child for 25 or more hours per week.
(3) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this subdivision, the department may implement this subdivision through management bulletins or similar letters of instruction on or before December 31, 2023.
(4) The department shall initiate a rulemaking action to adopt regulations to implement this subdivision no later than July 1, 2026.
(5) If the provisions of this subdivision are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 10426 of the Welfare and Institutions Code, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.
(ah) “Indirect administrative costs” means the general costs related to the day-to-day functioning of the program and the indirect de minimis expenses incurred by the agency in the administration of the program. Indirect administrative costs include, but are not limited to, all of the following:
(1) Providing staff payroll and benefits.
(2) Conducting internal and external program audits, including federal single source audits.
(3) Managing facilities, human resources, and information technology, including cybersecurity insurance, software, and maintenance.
(4) Communication with the state, providers, and the union.
(5) Conducting accounts payable and receivable, grants and contract management, invoicing, and required reporting.
(6) Researching and evaluating programs.
(ai) “Direct program and support costs” means the costs of running the center-based program, including, but not limited to, all of the following:
(1) Outreach, recruitment, and enrollment of families.
(2) Conducting family needs assessments and connecting families to vital community resources.
(3) Providing individualized, ongoing case management.
(4) Monitoring and improving the quality of customer service and program delivery.
(5) Collecting childcare attendance records and calculating and processing monthly payments.
(6) Maintaining childcare documents.
(7) Providing technical assistance to families and providers.
(8) Hearing parental appeals.
(aj) This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.

SEC. 2.

Section 8205 of the Education Code, as added by Section 2 of Chapter 73 of the Statutes of 2024, is amended to read:

8205.

As used in this chapter:
(a) “Applicant or contracting agency” means a school district, community college district, college or university, county superintendent of schools, county, city, public agency, private nontax-exempt agency, private tax-exempt agency, or other entity that is authorized to establish, maintain, or operate services pursuant to this chapter. Private agencies and parent cooperatives, duly licensed by law, shall receive the same consideration as any other authorized entity with no loss of parental decisionmaking prerogatives as consistent with the provisions of this chapter.
(b) “Assigned reimbursement rate” is that rate established by the contract with the agency in accordance with Section 8242.
(c) “Attendance” means the number of children present at a preschool facility. “Attendance,” for purposes of reimbursement, includes excused absences by children because of illness, quarantine, illness or quarantine of their parent, family emergency, or to spend time with a parent or other relative as required by a court of law or that is clearly in the best interest of the child.
(d) “Capital outlay” means the amount paid for the renovation and repair of childcare and development and preschool facilities to comply with state and local health and safety standards, and the amount paid for the state purchase of relocatable childcare and development and preschool facilities for lease to qualifying contracting agencies.
(e) “Preschool facility” means a residence or building or part thereof in which preschool services are provided.
(f) “Early childhood programs” means those programs that offer a full range of services for children from infancy to 13 years of age, for any part of a day, by a public, private, or proprietary agency, in centers and family childcare homes.
(g) “Children at risk of abuse, neglect, or exploitation” means children who are so identified in a written referral from a legal, medical, or social service agency, or emergency shelter.
(h) “Children with exceptional needs” means either of the following:
(1) Children under three years of age who have been determined to be eligible for early intervention services pursuant to the California Early Intervention Services Act (Title 14 (commencing with Section 95000) of the Government Code) and its implementing regulations. These children include an infant or toddler with a developmental delay or established risk condition, or who is at high risk of having a substantial developmental disability, as defined in subdivision (a) of Section 95014 of the Government Code. These children shall have active individualized family service plans and shall be receiving early intervention services.
(2) Children 3 to 21 years of age, inclusive, who have been determined to be eligible for special education and related services by an individualized education program team according to the special education requirements contained in Part 30 (commencing with Section 56000) of Division 4 of Title 2, and who meet eligibility criteria described in Section 56026 and, Article 2.5 (commencing with Section 56333) of Chapter 4 of Part 30 of Division 4 of Title 2, and Sections 3030 and 3031 of Title 5 of the California Code of Regulations. These children shall have an active individualized education program and shall be receiving early intervention services or appropriate special education.
(i) “Cost” includes, but is not limited to, expenditures that are related to the operation of preschool programs. “Cost” may include a reasonable amount for state and local contributions to employee benefits, including approved retirement programs, agency administration, and any other reasonable program operational costs. “Cost” may also include amounts for licensable facilities in the community served by the program, including lease payments or depreciation, downpayments, and payments of principal and interest on loans incurred to acquire, rehabilitate, or construct licensable facilities, but these costs shall not exceed fair market rents existing in the community in which the facility is located. “Reasonable and necessary costs” are costs that, in nature and amount, do not exceed what an ordinary prudent person would incur in the conduct of a competitive business.
(j) “Elementary school,” as contained in former Section 425 of Title 20 of the United States Code (the National Defense Education Act of 1958, Public Law 85-864, as amended), includes early childhood education programs and all child development programs, for the purpose of the cancellation provisions of loans to students in institutions of higher learning.
(k) “Family childcare home education network” means an entity organized under law that contracts with the department to make payments to licensed family childcare home providers and to provide educational and support services to those providers and to children and families eligible for California state preschool program services.
(l) “Health services” include, but are not limited to, all of the following:
(1) Referral, whenever possible, to appropriate health care providers able to provide continuity of medical care.
(2) Health screening and health treatment, including a full range of immunization recorded on the appropriate state immunization form to the extent provided by the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code) and the Child Health and Disability Prevention Program (Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code), but only to the extent that ongoing care cannot be obtained utilizing community resources.
(3) Health education and training for children, parents, staff, and providers.
(4) Followup treatment through referral to appropriate health care agencies or individual health care professionals.
(m) “Higher educational institutions” means the Regents of the University of California, the Trustees of the California State University, the Board of Governors of the California Community Colleges, and the governing bodies of any accredited private nonprofit institution of postsecondary education.
(n) “Intergenerational staff” means persons of various generations.
(o) “Dual language learner children” means children whose first language is a language other than English or children who are developing two or more languages, one of which may be English.
(p) “Parent” means a biological parent, stepparent, adoptive parent, foster parent, caretaker relative, or any other adult living with a child who has responsibility for the care and welfare of the child.
(q) “Program director” means a person who, pursuant to Section 8298, is qualified to serve as a program director.
(r) “Proprietary agency” means an organization or facility providing preschool, which is operated for profit.
(s) “Children with severe disabilities” are children with exceptional needs from birth to 21 years of age, inclusive, who require intensive instruction and training in programs serving pupils with the following profound disabilities: autism, blindness, deafness, severe orthopedic impairments, serious emotional disturbances, or severe intellectual disabilities. “Children with severe disabilities” also include those individuals who would have been eligible for enrollment in a developmental center for handicapped pupils under Chapter 6 (commencing with Section 56800) of Part 30 of Division 4 of Title 2 as it read on January 1, 1980.
(t) (1) “Site supervisor” means a person who, regardless of their title, has operational program responsibility for an early childhood program at a single site.
(2) A site supervisor shall satisfy one of the following:
(A) Hold a permit issued by the Commission on Teacher Credentialing that authorizes supervision of a childcare and development program operating in a single site.
(B) Hold an administrative credential or an administrative services credential issued by the Commission on Teacher Credentialing.
(C) Meet the qualifications of a program director under Section 8298.
(3) The Superintendent may waive the requirements of this subdivision if the Superintendent determines that the existence of compelling need is appropriately documented.
(u) “Standard reimbursement rate” means the reimbursement rate applicable to California state preschool programs pursuant to Section 8242.
(v) “Startup costs” means those expenses an agency incurs in the process of opening a new or additional facility before the full enrollment of children.
(w) “California state preschool program” means those programs that offer part-day or full-day, or both, educational programs for eligible three- and four-year-old children. These programs may be offered by a public, private, or proprietary agency, and operated in childcare centers or family childcare homes operating through a family childcare home education network.
(x) “Support services” means those services that, when combined with preschool services, help promote the healthy physical, mental, social, and emotional growth of children. Support services may include, but are not limited to: protective services, parent training, provider and staff training, transportation, parent and child counseling, child development resource and referral services, and child placement counseling.
(y) “Teacher” means a person with the appropriate permit issued by the Commission on Teacher Credentialing who provides program supervision and instruction that includes supervision of a number of aides, volunteers, and groups of children.
(z) “Underserved area” means a county or subcounty area, including, but not limited to, school districts, census tracts, or ZIP Code areas, where the ratio of publicly subsidized preschool program services to the need for these services is low, as determined by the Superintendent.
(aa) “Three-year-old children” means children who will have their third birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program. Children who have their third birthday on or after December 2 of the fiscal year, may be enrolled in a California state preschool program on or after their third birthday. Any child under four years of age shall be served in a California state preschool program facility, licensed in accordance with Title 22 of the California Code of Regulations.
(ab) “Four-year-old children” means children who will have their fourth birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program, or a child whose fifth birthday occurs after September 1 of the fiscal year in which they are enrolled in a California state preschool and whose parent or guardian has opted to retain or enroll them in a California state preschool program.
(ac) “Homeless children and youth” has the same meaning as defined in Section 11434a(2) of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.).
(ad) “Local educational agency” means a school district, a county office of education, a community college district, or a school district acting on behalf of one or more schools within the school district.
(ae) “Funded enrollment” means the number of subsidized children funded to be enrolled, based on the maximum reimbursable amount, contract rate, inclusive of any adjustment factors, and approved program calendar, by a California state preschool program contractor.
(af) (1) Effective no later than March 1, 2024, “part-time” means preschool services certified for a child for fewer than 25 hours per week.
(2) Effective no later than March 1, 2024, “full-time” means preschool services certified for a child for 25 or more hours per week.
(3) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this subdivision, the department may implement this subdivision through management bulletins or similar letters of instruction on or before December 31, 2023.
(4) The department shall initiate a rulemaking action to adopt regulations to implement this subdivision no later than July 1, 2026.
(5) If the provisions of this subdivision are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 10426 of the Welfare and Institutions Code, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.
(ag) “Indirect administrative costs” means the general costs related to the day-to-day functioning of the program and the indirect de minimis expenses incurred by the agency in the administration of the program. Indirect administrative costs include, but are not limited to, all of the following:
(1) Providing staff payroll and benefits.
(2) Conducting internal and external program audits, including federal single source audits.
(3) Managing facilities, human resources, and information technology, including cybersecurity insurance, software, and maintenance.
(4) Communication with the state, providers, and the union.
(5) Conducting accounts payable and receivable, grants and contract management, invoicing, and required reporting.
(6) Researching and evaluating programs.
(ah) “Direct program and support costs” means the costs of running the center-based program, including, but not limited to, all of the following:
(1) Outreach, recruitment, and enrollment of families.
(2) Conducting family needs assessments and connecting families to vital community resources.
(3) Providing individualized, ongoing case management.
(4) Monitoring and improving the quality of customer service and program delivery.
(5) Collecting childcare attendance records and calculating and processing monthly payments.
(6) Maintaining childcare documents.
(7) Providing technical assistance to families and providers.
(8) Hearing parental appeals.
(ai) This section shall become operative on July 1, 2027.

SEC. 3.Section 8245.5 of the Education Code is amended to read:
8245.5.

(a)(1)Notwithstanding any other law, for the 2022–23 fiscal year only, contracting agencies operating a California state preschool program shall be reimbursed according to paragraph (2), if they meet either of the following requirements:

(A)The program is open and operating in accordance with their approved program calendar and remains open and offering services through the program year.

(B)The program operated by the contracting agency is closed by local or state public health order or guidance due to the COVID-19 pandemic.

(2)Reimbursement pursuant to paragraph (1) shall be 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, pursuant to guidance released by the Superintendent.

(3)A California state preschool program that is physically closed as described in subparagraph (B) of paragraph (1) due to the COVID-19 pandemic, but funded to be operational, shall provide distance learning services, as specified by the Superintendent, for the program. A contractor specified in paragraph (1) shall submit a distance learning plan to the department overseeing their contract pursuant to guidance from the Superintendent.

(b)Notwithstanding any other law, reimbursement for full-day and part-day California state preschool family childcare home education network providers for the 2022–23 fiscal year shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.

(c)Notwithstanding any other law, commencing July 1, 2023, to June 30, 2025, inclusive, if a program is open and operating in accordance with their approved program calendar and remains open and offering services through the program year, the contract reimbursement amount shall be based on the lesser of either of the following:

(1)One hundred percent of the contract maximum reimbursable amount.

(2)Net reimbursable program costs.

(d)Notwithstanding any other law, commencing January 1, 2023, and to July 1, 2028, inclusive, reimbursement for full-day and part-day California state preschool family childcare home education network providers shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance, less any allowable administrative expenses withheld by the contractor.

(e)If the provisions of subdivisions (c), (d), (f), and (g) are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 10426 of the Welfare and Institutions Code, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.

(f)Commencing July 1, 2025, and through June 30, 2026, if a program is open and operating in accordance with its approved program calendar and remains open and providing services to certified children throughout the program year, the contract reimbursement shall be based on the lesser of the following:

(1)The maximum reimbursable amount stated in the contract.

(2)Net reimbursable program costs.

(g)(1)Commencing July 1, 2026, contract reimbursement shall be as follows:

(A)If the program has maintained at least 85 percent of its certified daily enrollment, the program shall receive the maximum reimbursable amount stated in the contract.

(B)If the program has not maintained at least 85 percent of its certified daily enrollment, the program shall be reimbursed the lesser of the following:

(i)Net reimbursable program costs.

(ii)The product of the adjusted child days of enrollment for certified children times the contract rate set forth in this section.

(2)If a contractor is reimbursed pursuant to subparagraph (B) of paragraph (1) for three consecutive years, and continues to have less than 85 percent of their certified daily enrollment, the department shall place the contractor on conditional contract status as described in Sections 17829 and 17830 of Title 5 of the California Code of Regulations unless the contractor provides clear evidence of progress towards full enrollment.

SEC. 4.SEC. 3.

Section 10213.5 of the Welfare and Institutions Code is amended to read:

10213.5.

As used in this part:
(a) “Alternative payments” includes payments that are made by one childcare agency to another agency or childcare provider for the provision of childcare and development services, and payments that are made by an agency to a parent for the parent’s purchase of childcare and development services.
(b) “Alternative payment program” means a local government agency or nonprofit organization that has contracted with the department pursuant to Section 10225.5, or a migrant alternative payment program pursuant to Chapter 6 (commencing with Section 10235), to provide alternative payments and to provide support services to parents and providers.
(c) “Applicant or contracting agency” means a school district, community college district, college or university, county superintendent of schools, county, city, public agency, private nontax-exempt agency, private tax-exempt agency, or other entity that is authorized to establish, maintain, or operate services pursuant to this chapter. Private agencies and parent cooperatives, duly licensed by law, shall receive the same consideration as any other authorized entity with no loss of parental decisionmaking prerogatives as consistent with the provisions of this chapter.
(d) “Assigned reimbursement rate” is that rate established by the contract with the agency and is derived by dividing the total dollar amount of the contract by the minimum child day of average daily enrollment level of service required.
(e) “Attendance” means the number of children present at a childcare and development facility. “Attendance,” for purposes of reimbursement, includes excused absences by children because of illness, quarantine, illness or quarantine of their parent, family emergency, medical and educational appointments, or to spend time with a parent or other relative as required by a court of law or that is clearly in the best interest of the child. For purposes of reimbursement, a contractor may claim attendance for days that the contractor or provider is required to hold a space for a child during the period that a family is assumed to have abandoned care or is engaging in the appeal process based on disenrollment for abandoning care.
(f) “Capital outlay” means the amount paid for the renovation and repair of childcare and development and preschool facilities to comply with state and local health and safety standards, and the amount paid for the state purchase of relocatable childcare and development and preschool facilities for lease to qualifying contracting agencies.
(g) “Caregiver” means a person who provides direct care, supervision, and guidance to children in a childcare and development facility.
(h) “Childcare and development facility” means a residence or building or part thereof in which childcare and development services are provided.
(i) “Childcare and development programs” means those programs that offer a full range of services for children from infancy to 13 years of age, for any part of a day, by a public or private agency, in centers and family childcare homes. These programs include, but are not limited to, all of the following:
(1) General childcare and development.
(2) Migrant childcare and development.
(3) Childcare provided by the California School Age Families Education Program (Article 7.1 (commencing with Section 54740) of Chapter 9 of Part 29 of Division 4 of Title 2).
(4) Resource and referral.
(5) Childcare and development services for children with exceptional needs.
(6) Family childcare home education network.
(7) Alternative payment.
(8) Schoolage community childcare.
(j) “Childcare and development services” means those services designed to meet a wide variety of needs of children and their families, while their parents or guardians are working, in training, seeking employment, incapacitated, or in need of respite. These services may include direct care and supervision, instructional activities, resource and referral programs, and alternative payment arrangements.
(k) “Children at risk of abuse, neglect, or exploitation” means children who are so identified in a written referral from a legal, medical, or social service agency, or emergency shelter.
(l) “Children with exceptional needs” means either of the following:
(1) Infants and toddlers under three years of age who have been determined to be eligible for early intervention services pursuant to the California Early Intervention Services Act (Title 14 (commencing with Section 95000) of the Government Code) and its implementing regulations. These children include an infant or toddler with a developmental delay or established risk condition, or who is at high risk of having a substantial developmental disability, as defined in subdivision (a) of Section 95014 of the Government Code. These children shall have active individualized family service plans, shall be receiving early intervention services, and shall be children who require the special attention of adults in a childcare setting.
(2) Children 3 to 21 years of age, inclusive, who have been determined to be eligible for special education and related services by an individualized education program team according to the special education requirements contained in Part 30 (commencing with Section 56000) of Division 4 of Title 2 of the Education Code, and who meet eligibility criteria described in Section 56026 of the Education Code and, Article 2.5 (commencing with Section 56333) of Chapter 4 of Part 30 of Division 4 of Title 2 of the Education Code, and Sections 3030 and 3031 of Title 5 of the California Code of Regulations. These children shall have an active individualized education program, shall be receiving early intervention services or appropriate special education and related services, and shall be children who require the special attention of adults in a childcare setting. These children include children with intellectual disabilities, hearing impairments (including deafness), speech or language impairments, visual impairments (including blindness), serious emotional disturbance (also referred to as emotional disturbance), orthopedic impairments, autism, traumatic brain injury, other health impairments, or specific learning disabilities, who need special education and related services consistent with Section 1401(3)(A) of Title 20 of the United States Code.
(m) “Closedown costs” means reimbursements for all approved activities associated with the closing of operations at the end of each growing season for migrant child development programs only.
(n) “Cost” includes, but is not limited to, expenditures that are related to the operation of childcare and development programs. “Cost” may include a reasonable amount for state and local contributions to employee benefits, including approved retirement programs, agency administration, and any other reasonable program operational costs. “Cost” may also include amounts for licensable facilities in the community served by the program, including lease payments or depreciation, downpayments, and payments of principal and interest on loans incurred to acquire, rehabilitate, or construct licensable facilities, but these costs shall not exceed fair market rents existing in the community in which the facility is located. “Reasonable and necessary costs” are costs that, in nature and amount, do not exceed what an ordinary prudent person would incur in the conduct of a competitive business.
(o) “Elementary school,” as contained in former Section 425 of Title 20 of the United States Code (the National Defense Education Act of 1958, Public Law 85-864, as amended), includes early childhood education programs and all child development programs, for the purpose of the cancellation provisions of loans to students in institutions of higher learning.
(p) “Family childcare home education network” means an entity organized under law that contracts with the department pursuant to Section 10250 to make payments to licensed family childcare home providers and to provide educational and support services to those providers and to children and families eligible for state-subsidized childcare and development services. A family childcare home education network may also be referred to as a family childcare home system.
(q) “Health services” include, but are not limited to, all of the following:
(1) Referral, whenever possible, to appropriate health care providers able to provide continuity of medical care.
(2) Health screening and health treatment, including a full range of immunization recorded on the appropriate state immunization form to the extent provided by the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3) and the Child Health and Disability Prevention Program (Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code), but only to the extent that ongoing care cannot be obtained utilizing community resources.
(3) Health education and training for children, parents, staff, and providers.
(4) Followup treatment through referral to appropriate health care agencies or individual health care professionals.
(r) “Higher educational institutions” means the Regents of the University of California, the Trustees of the California State University, the Board of Governors of the California Community Colleges, and the governing bodies of any accredited private nonprofit institution of postsecondary education.
(s) “Intergenerational staff” means persons of various generations.
(t) “Dual language learner” means children whose first language is a language other than English or children who are developing two or more languages, one of which may be English.
(u) “Parent” means a biological parent, stepparent, adoptive parent, foster parent, caretaker relative, or any other adult living with a child who has responsibility for the care and welfare of the child.
(v) “Program director” means a person who, pursuant to Sections 10242 and 10380.5, is qualified to serve as a program director.
(w) “Proprietary childcare agency” means an organization or facility providing childcare, which is operated for profit.
(x) “Resource and referral programs” means programs that provide information to parents, including referrals and coordination of community resources for parents and public or private providers of care. Services frequently include, but are not limited to: technical assistance for providers, toy-lending libraries, equipment-lending libraries, toy- and equipment-lending libraries, staff development programs, health and nutrition education, and referrals to social services.
(y) “Severely disabled children” are children with exceptional needs from birth to 21 years of age, inclusive, who require intensive instruction and training in programs serving pupils with the following profound disabilities: autism, blindness, deafness, severe orthopedic impairments, serious emotional disturbances, or severe intellectual disabilities. “Severely disabled children” also include those individuals who would have been eligible for enrollment in a developmental center for handicapped pupils under Chapter 7 (commencing with Section 56800) of Part 30 of Division 4 of Title 2 of the Education Code as it read on January 1, 1980.
(z) “Short-term respite childcare” means childcare service to assist families whose children have been identified through written referral from a legal, medical, or social service agency, or emergency shelter as being neglected, abused, exploited, or homeless, or at risk of being neglected, abused, exploited, or homeless. Childcare is provided for less than 24 hours per day in childcare centers, treatment centers for abusive parents, family childcare homes, or in the child’s own home.
(aa) “Site supervisor” means a person who, regardless of their title, has operational program responsibility for a childcare and development program at a single site. A site supervisor shall hold a permit issued by the Commission on Teacher Credentialing that authorizes supervision of a childcare and development program operating in a single site. The department may waive the requirements of this subdivision if the department determines that the existence of compelling need is appropriately documented.
(ab) “Standard reimbursement rate” means that rate established by the department pursuant to Section 10280.
(ac) “Startup costs” means those expenses an agency incurs in the process of opening a new or additional facility before the full enrollment of children.
(ad) “California state preschool program” means part-day and full-day educational programs for low-income or otherwise disadvantaged three- and four-year-old children.
(ae) “Support services” means those services that, when combined with childcare and development services, help promote the healthy physical, mental, social, and emotional growth of children. Support services include, but are not limited to: protective services, parent training, provider and staff training, transportation, parent and child counseling, child development resource and referral services, and child placement counseling.
(af) “Teacher” means a person with the appropriate permit issued by the Commission on Teacher Credentialing who provides program supervision and instruction that includes supervision of a number of aides, volunteers, and groups of children.
(ag) “Underserved area” means a county or subcounty area, including, but not limited to, school districts, census tracts, or ZIP Code areas, where the ratio of publicly subsidized childcare and development program services to the need for these services is low, as determined by the department.
(ah) “Workday” means the time that the parent requires temporary care for a child for any of the following reasons:
(1) To undertake training in preparation for a job.
(2) To undertake or retain a job.
(3) To undertake other activities that are essential to maintaining or improving the social and economic function of the family, are beneficial to the community, or are required because of health problems in the family.
(ai) “Homeless children and youth” has the same meaning as defined in Section 11434a(2) of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.).
(aj) “Local educational agency” means a school district, a county office of education, a community college district, or a school district acting on behalf of one or more schools within the school district.
(ak) “Alternative methodology” means a cost-based ratesetting method, including a cost estimation model, on which to base payment rates pursuant to the requirements set forth in Section 98.45 of Title 45 of the Code of Federal Regulations.
(al) (1) Effective no later than March 1, 2024, “part-time care” means care certified for a child for fewer than 25 hours per week.
(2) Effective no later than March 1, 2024, “full-time care” means care certified for a child for 25 or more hours per week.
(3) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the department may implement and administer this subdivision by all-county letters, bulletins, or similar written instructions until regulations are adopted.
(4) The department shall initiate a rulemaking action to adopt regulations to implement this subdivision no later than July 1, 2026.
(5) If the provisions of this subdivision are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 10426, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.
(am) “Indirect administrative costs” means the general costs related to the day-to-day functioning of the program and the indirect de minimis expenses incurred by the agency in the administration of the program. Indirect administrative costs include, but are not limited to, all of the following:
(1) Providing staff payroll and benefits.
(2) Conducting internal and external program audits, including federal single source audits.
(3) Managing facilities, human resources, and information technology, including cybersecurity insurance, software, and maintenance.
(4) Communication with the state, providers, and the union.
(5) Conducting accounts payable and receivable, grants and contract management, invoicing, and required reporting.
(6) Researching and evaluating programs.
(an) “Direct program and support costs” means the costs of running the alternative payment program, including, but not limited to, all of the following:
(1) Outreach, recruitment, and enrollment of families.
(2) Conducting family needs assessments and connecting families to vital community resources.
(3) Providing individualized, ongoing case management.
(4) Monitoring and improving the quality of customer service and program delivery.
(5) Collecting childcare attendance records and calculating and processing monthly payments.
(6) Maintaining childcare documents.
(7) Providing technical assistance to families and providers.
(8) Hearing parental appeals.

SEC. 5.SEC. 4.

Section 10229 of the Welfare and Institutions Code is amended to read:

10229.

(a) The reimbursement for alternative payment programs shall include the cost of childcare paid to childcare providers plus direct program and support costs and the indirect administrative costs of the alternative payment program.
(b) (1) The indirect administrative costs shall not exceed an amount equal to 15 percent of the maximum reimbursable amount of the contract.
(2) The combined costs of indirect administrative costs pursuant to paragraph (1) and direct program and support costs shall not exceed 25 percent of the maximum reimbursable amount of the contract.
(c) (1) If 25 percent of the maximum reimbursable amount of the contract falls below three hundred thousand dollars ($300,000), the minimum reimbursement for the combined total costs pursuant to paragraph (2) of subdivision (b) shall be three hundred thousand dollars ($300,000).
(2) The minimum reimbursement in paragraph (1) shall be adjusted annually for inflation, according to the California Consumer Price Index.
(d) The indirect administrative costs shall not exceed the costs allowable for administration under federal requirements.

SEC. 6.Section 10280 of the Welfare and Institutions Code is amended to read:
10280.

(a)The department, in collaboration with the State Department of Education, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.

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

(2)When establishing standards and assigned reimbursement rates, the department and the State Department of Education shall confer with applicant agencies.

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

(4)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.

(b)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand eight hundred eighty-eight dollars ($12,888) and, commencing with the 2022–23 fiscal year, shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15 of the Education Code.

(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:

(A)The 75th percentile of the 2018 regional market rate survey.

(B)The contract per-child reimbursement amount as of December 31, 2021.

(2)(A)Commencing July 1, 2022, subject to available funding, the department may issue temporary rate increases to contractors that exceed the rates specified in paragraph (1). The department shall have discretion in determining how funding may be used to increase the rates, including, but not limited to, providing one-time lump-sum payments. The department may contract with another entity to distribute this funding to contractors.

(B)Notwithstanding any other law, contracts or grants awarded pursuant to this subparagraph shall be exempt from the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, the Public Contract Code, and the State Contracting Manual, and shall not be subject to review or approval of the Department of General Services.

(3)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and information shall include, but not be limited to, all of the following:

(A)Address, including ZIP Code.

(B)Race and ethnicity.

(C)Gender.

(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.

(E)What types of federal relief funds have been received from the state.

(F)Use of federal relief funds received.

(G)Documentation that the provider met certifications as required by federal law.

(4)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.

(d)Notwithstanding subdivision (b), for the 2023–24, 2024–25, and 2025–26 fiscal years, the cost-of-living adjustments required pursuant to subdivision (b) shall instead be zero. It is the intent of the Legislature that any adjustment in the 2023–24 and 2024–25 fiscal years related to reimbursement for programs funded pursuant to this section will be subject to a ratified agreement, and subject to future legislation providing for appropriations related to the budget bill.

(e)Commencing July 1, 2025, and through June 30, 2026, if a program is open and operating in accordance with its approved program calendar and remains open and providing services to certified children throughout the program year, the contract reimbursement shall be based on the lesser of the following:

(1)The maximum reimbursable amount stated in the contract.

(2)Net reimbursable program costs.

(f)(1)Commencing July 1, 2026, contract reimbursement for noncenter-based childcare programs shall be based on the lesser of the following:

(A)The maximum reimbursable amount stated in the contract.

(B)Net reimbursable program costs.

(C)The product of the adjusted child days of enrollment for certified children times the contract rate set forth in this section.

(2)Commencing July 1, 2026, contract reimbursement for center-based childcare programs shall be as follows:

(A)If the center has maintained at least 85 percent of its certified daily enrollment, the center shall receive the maximum reimbursable amount stated in the contract.

(B)If the center has not maintained at least 85 percent of its certified daily enrollment, the center shall be reimbursed the lesser of the following:

(i)Net reimbursable program costs.

(ii)The product of the adjusted child days of enrollment for certified children times the contract rate set forth in this section.

(g)Commencing July 1, 2025 and through June 30, 2026, reimbursement for family childcare home education network providers funded through migrant child care and development programs pursuant to Chapter 6 (commencing with Section 10235), general child care and development programs pursuant to Chapter 7 (commencing with Section 10240), or child care and development services for children with special needs pursuant to Article 9 (commencing with Section 10260) shall receive 100 percent of reimbursement based on the family’s certified need for services at the maximum authorized hours of care less any allowable administrative expenses withheld by the contractor.

(h)If subdivision (g) is in conflict with a memorandum of understanding reached pursuant to Section 10426, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.

Text of SB 1110 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions
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