8265.
(a) The State Department of Social Services shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the regional reimbursement ceiling adopted pursuant to Section 8357, a quality adjustment factor to address the cost of staffing ratios pursuant to Section 8264.8, the length of the program year, the hours of service, and any additional adjustment factors as described under Section 8265.5.(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 shall confer with applicant agencies.
(3) By January 1, 2024, the department shall develop, or hire a contractor to develop, a modernized reimbursement formula based on the components outlined in the state’s Master Plan for Early Learning and Care, including, but not limited to, adjustments for market, program quality, child needs and characteristics, and state of emergency declarations.
(4) By January 1, 2024, the department shall convene a working group to assess the existing quality standards (Subchapter 12 (commencing with Section 18270) of Chapter 19 of Division 1 of Title 5 of the California Code of Regulations) for
equity and accessibility to all provider types and settings. The department shall develop recommendations to be implemented with the new reimbursement base rate. These changes shall be aligned with appropriate competencies for early childhood workers, including, but not limited to, experience, education, and environmental settings, to be implemented in alignment with the new reimbursement formula.
(4)
(5) By November 10, 2022, and annually thereafter, the reimbursement system plan, including methodology, standards, county rate targets as established by the department pursuant to this section, and the total
statewide funding amount necessary to reach annual rate targets for all agencies shall be submitted to the Joint Legislative Budget Committee.
(5)
(6) The department may establish any regulations the department deems advisable concerning conditions of service and hours of enrollment for children in the programs.
(b) Commencing January 1, 2022, the State Department of Social Services shall adopt an interim standard reimbursement rate based on the 2018 regional market rate survey of eleven thousand nine
hundred ninety-five dollars ($11,995) and, commencing with the 2024–25 fiscal year, implement the new base rate, which shall be annually increased by the cost-of-living adjustment granted by the Legislature pursuant to Section 42238.15. Commencing July 1, 2018, the full-day state preschool reimbursement rate shall be twelve thousand seventy dollars ($12,070) and, commencing with the 2019–20 fiscal year, shall be annually increased by the cost-of-living adjustment granted by the Legislature pursuant to Section 42238.15.
(c) The reimbursement system plan shall require agencies having an assigned reimbursement rate above the current year standard reimbursement rate to reduce costs on an incremental basis to achieve the standard reimbursement rate.
(d) (1) The reimbursement system plan shall provide for adjusting reimbursement on a case-by-case basis, in order to maintain service levels for agencies. Assigned reimbursement rates shall be increased only on the basis of one or more of the following:
(A) Loss of program resources from other sources.
(B) Need of an agency to pay the same childcare rates as those prevailing in the local community.
(C) Increased costs directly attributable to new or different regulations.
(D) Documented increased costs necessary to maintain the prior year’s level
of service and ensure the continuation of threatened programs.
(2) Childcare agencies funded at the lowest rates shall be given first priority for increases.
(e) The reimbursement system plan shall provide for expansion of child development programs at no more than the standard reimbursement rate for that fiscal year.
(f) The department may reduce the percentage of reduction for a public agency that satisfies any of the following:
(1) Serves more than 400 children.
(2) Has in effect a collective bargaining agreement.
(3) Has other extenuating circumstances that apply, as determined by the department.
(g) (1) Notwithstanding Section 8265.5, on or before July 1, 2022, and annually thereafter, the department shall establish a reimbursement rate target for each contracting agency that meets quality standards pursuant to Sections 8203, 8208, 8244, 8261, 8264.7, 8360, and 8360.1, and any regulations adopted thereunder, based on all of the following elements:
(A) The regional market rate ceilings for the contracting agency’s county, as applicable, pursuant to Section 8357.
(B) The quality adjustment factor for the age range of children proposed to be served by the contracting agency, as a multiplier, specified in paragraph (3).
(C) The program year and hours of service reimbursement factor pursuant to Section 8266.1, if applicable.
(D) Additional adjustment factors for special circumstances or services, as described under Section 8265.5, if applicable.
(E) A short-term crisis adjustment factor of 1.5 under any state of emergency declarations made by local or state officials.
(2) A contracting
agency’s rate target shall not be less than that agency’s 2022 rate, by age range, pursuant to Section 8265.5.
(3) The department, in order to meet the costs of providing quality standards pursuant to Sections 8203, 8208, 8244, 8261, 8264.7, 8360, and 8360.1, and any regulations adopted thereunder beyond those calculated in the regional market rate survey, shall establish quality adjustment factors for all of the following age ranges:
(A) For infants who are 0 to 18 months of age, the adjustment factor shall be 1.23.
(B) For toddlers who are 18 to 36 months of age, the adjustment factor shall be 1.23.
(C) For preschoolers who are 36 months to six years of age, the adjustment factor shall be 1.23.
(D) For schoolage children who are six years of age and older, the adjustment factor shall be 1.03.
(4) All providers, regardless of type, meeting quality standards specified in paragraph (3) shall be paid the quality adjustment factor, including family child care home education networks.
(5) The reimbursement system plan shall include a formula for annually adjusting reimbursement rates for each agency, based on all of the following:
(A) The annual Budget Act funding allocated
for standard reimbursement rate increases pursuant to this section.
(B) An equitable distribution of standard reimbursement rate increases to agencies, by county, as an equal percentage of the county outstanding rate target, for purposes of meeting the targets identified pursuant to this subdivision.
(C) Funding allocated for cost-of-living adjustments, if applicable.
(h) This section shall become operative on or after July 1, 2022, upon an appropriation in the annual Budget Act or another act for the express purpose of implementing this section.