SB150 - Early care and education.

Amended IN Assembly June 26, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 150 Introduced by Committee on Budget and Fiscal Review January 23, 2025 An act relating to the Budget Act of 2025. An act to amend Sections 8205, 8208, 8210, 8211, 8213, 8215, 8217, 8242, 8251, 8252, and 8253 of the Education Code, to amend Sections 1596.798, 1596.7985, 1596.81, 1596.866, 1596.8662, 1596.867, 1596.95, and 1597.54 of, and to add Sections 1596.868 and 1597.63 to, the Health and Safety Code, and to amend Sections 10213.5, 10271, 10280, 10290, 10370.5, 10388, 10436, and 11323.4 of, and to add Sections 10245, 10277.6, 10309.8, and 10310.2 to, the Welfare and Institutions Code, relating to childcare, and making an appropriation therefor, to take effect immediately, bill related to the budget. LEGISLATIVE COUNSEL'S DIGEST SB 150, as amended, Committee on Budget and Fiscal Review. Budget Act of 2025. Early care and education. (1) Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs. The act establishes a standard reimbursement rate for both the part-day and full-day preschool programs, as provided. The act defines the term “attendance” for purposes of this reimbursement to include 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. This bill would revise the definition of the term “attendance” for purposes of reimbursement to additionally include excused absences for medical and educational appointments and for days a child is not in attendance during an appeal process regarding expulsion or suspension, as specified. (2) The Early Education Act establishes eligibility requirements, including income eligibility requirements, and a specified priority sequence for enrollment, for the part-day and full-day preschool programs. The act requires that a family be considered to meet all eligibility and need requirements for not less than 24 months and prohibits requiring a family to report changes to income or other changes for at least 24 months. The act also establishes a fee schedule for families receiving preschool services and exempts a family from family fees for up to 12 months. The act authorizes a provider operating a state preschool program within the attendance boundary of certain public schools where at least 80% of enrolled pupils are eligible for free or reduced-price meals to enroll 3-year-old and 4-year-old children in accordance with the above-described enrollment priorities and, any remaining spots, to families not meeting the enrollment priorities but who establish residency within the attendance boundary of the qualifying public school. This bill would revise those provisions by, among other things, (A) specifying that the prohibition on requiring a family to report changes to income or other changes for at least 24 months for purposes of eligibility includes when a family member transfers to another California state preschool program or when a child is voluntarily disenrolled by their family for any period of time during eligibility, (B) requiring the State Department of Education to, on or before January 1, 2027, implement the eligibility requirements described in (A) through management bulletins or similar letters of instruction and requiring the department to, on or before December 31, 2028, initiate a rulemaking action to implement those eligibility requirements, (C) exempting a family from family fees for up to one certification period instead of up to 12 months, (D) extending eligibility for part-day and full-day preschool programs to children of a parent or guardian employed by a local educational agency, (E) extending eligibility for full-day preschool programs to children whose families need childcare services because they are participating in a CalWORKs program activity, (F) revising the priority sequence for eligibility by including within the sequence children whose parent or guardian is employed by a local education agency, as specified, and revising the sequencing provisions for children with exceptional needs, as provided, (G) specifying, for purposes of establishing ongoing income eligibility, that ongoing income eligibility means a family’s initial income eligibility for services at the time of enrollment will be in effect, regardless of an increase in income, (H) instead authorizing a provider operating a state preschool program within the attendance boundary of a school district or certain public schools where at least 80% of enrolled pupils are eligible for free or reduced-price meals, foster youth, or English learners, to enroll 3-year-old and 4-year-old children in accordance with the above-described enrollment priorities and, any remaining spots, to families not meeting the enrollment priorities but who either establish residency within, or have a parent or guardian employed within, the attendance boundary of the qualifying school district or public school in which the state preschool program is located, and (I) increasing a California state preschool program provider’s authority to schedule staff training days from 2 days per contract period to 5 days per contract period. (3) Existing law, the Child Care and Developmental Services Act, administered by the State Department of Social Services, establishes a system of childcare and development services for children up to 13 years of age. 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 the reimbursement rate to be increased by a specified cost-of-living adjustment, except for the 2023–24, 2024–25, and 2025–26 fiscal years, for which it was suspended. Commencing July 1, 2026, existing law requires the cost-of-living adjustment for state preschool programs to be consistent with an adjustment granted by the Legislature annually, as specified. This bill would additionally suspend the annual cost-of-living adjustment for the 2026–27 fiscal year. Existing law allocates certain appropriated funds to the State Department of Social Services and the State Department of Education to provide specified family childcare providers and childcare centers with a monthly cost of care plus rate, as specified. This bill would allocate a portion of those same appropriated funds to the State Department of Education to provide, commencing July 1, 2026, a once-per-month, per-child-served cost of care plus rate, as calculated by the Department of Finance, for providers serving children enrolled in California state preschool programs. (4) Existing law requires the State Department of Social Services, in consultation with the State Department of Education, to establish a fee schedule for families using preschool and childcare and developmental services and requires families who utilize those services to be assessed a family fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Existing law requires the Superintendent to use the fee schedule developed in conjunction with the State Department of Social Services for families using full-day preschool services. Existing law prohibits those family fees from being collected for the 2022–23 fiscal year and from July 1, 2023, to September 30, 2023, inclusive, and requires contractors to reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees during that time. This bill, by no later than January 1, 2027, would require contractors to reimburse California state preschool program providers for the full amount of the certificate or voucher without deducting family fees and to collect family fees, as specified. (5) The Child Care and Development Services Act establishes a comprehensive, coordinated, and cost-effective system of childcare and development services for children from infancy to 13 years of age and their parents. The act requires the State Department of Education, in consultation with the State Department of Social Services, county fraud investigators, and other fraud investigation experts, to perform an error rate study to estimate the percentage of errors in certain determinations, including, among others, errors in determinations of eligibility and reimbursement payments to childcare providers. The act also requires the State Department of Education to develop recommendations for the prevention and elimination of childcare fraud and programmatic errors and the identification and collection of childcare overpayments, and, in developing its recommendations, to consider existing best practices. Existing law requires all childcare contracts entered into by the State Department of Social Services for means-tested childcare programs to require implementation of those best practices. This bill would require the best practices on fraud and overpayments to require adoption in contractor policies and implementation of best practices on prevention and intervention of fraud and program integrity violations. The bill would require childcare contractors to terminate eligibility if there is substantiated evidence of a fraud or program integrity violation that invalidates the certification. The bill would authorize the department to enter into agreements with county welfare departments to support the investigation and enforcement of fraud and program integrity in any subsidized childcare program administered by the department, as specified. The bill would authorize the department to clarify the process for recovery of funds and imposition of sanctions described in the approved state plan for the implementation of programs under the federal Child Care and Development Fund in instances where fraud or other program integrity violation is established. Existing law requires the department, in consultation with the State Department of Education, to establish the above-described fee schedule and requires families who utilize those services to be assessed a single flat monthly fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Existing law requires family fees to be assessed at initial enrollment and reassessed at update of certification or recertification. This bill would require, no later than January 1, 2027, contractors to reimburse subsidized childcare providers without deducting family fees and to collect family fees. The bill would require the department to work with contractors in need of technical assistance to comply with these provisions. This bill would require funding appropriated to the department in the Budget Act of 2026, as specified, to be allocated to provide a once-per-month, per-child-served cost of care plus rate for providers serving children enrolled in specified subsidized childcare programs. The bill would require the Department of Finance to make specified calculations for reimbursement based on data provided by the department. Existing law requires the department, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards, specifies the standard reimbursement rates, and requires a cost-of-living adjustment. Existing law suspends the cost-of-living adjustment for the 2023–24, 2024–25, and 2025–26 fiscal years. This bill would also suspend the childcare and development program cost-of-living adjustment for the 2026–27 fiscal year except for resource and referral programs and local childcare and development planning councils, which the bill would require to receive a 2.009% cost-of-living adjustment. Existing law requires, if the market rate survey is used to set reimbursement rates for those childcare programs, the department to contract to conduct a regional market rate survey no more frequently than once every 2 years. This bill would instead require, if the market rate survey is used to set reimbursement rates, the department to contract to conduct a regional market survey every 3 years. The bill would also authorize, if an alternative methodology is used to inform the setting of reimbursement rates for subsidized childcare, the department to contract to develop and conduct an alternative methodology to set reimbursement rates for subsidized childcare no less than every 3 years and no sooner than 2 years prior to the submission of the Child Care and Development Fund Plan. Existing law provides for the California Work Opportunity and Responsibility to Kids (CalWORKs) program, under which each county provides cash assistance and other benefits to qualified low-income families and individuals. Existing law provides childcare to CalWORKs recipients in 3 stages. Existing law requires, on the date automated changes occur in the Statewide Automated Welfare System (SAWS), a county welfare department to provide limited, read-only, online access through county-level SAWS databases to local contractors providing CalWORKs childcare services, including a summary page with current individual family data needed to enroll a family in CalWORKs childcare services or to transfer a family between stages. This bill would expand the eligibility criteria for subsidized childcare services under the act to include participation in a CalWORKs program activity. The bill would prohibit a CalWORKs childcare recipient from participating in more than one stage of childcare at any given time. The bill would require, beginning January 1, 2028, or on the date automated changes occur in SAWS, whichever is later, the data available to local contractors on county-level SAWS databases to also include the relationship between the current or former CalWORKs recipient or recipients and the child, the childcare license number, if licensed, and whether the current or former CalWORKs recipient is receiving Medi-Cal or CalFresh benefits. By increasing duties on county welfare departments, this bill would impose a state-mandated local program. Beginning on or before July 1, 2027, this bill would authorize the department to set aside up to 15% of funding associated with slot expansion awards for general childcare and development programs to fund minor repairs, infrastructure upgrades, and other readiness activities for childcare and development programs. The bill would require the department to establish the process, including eligibility criteria, by which the funds shall be awarded to contractors. The bill would require awarded funds to be utilized within a timeframe est [Text truncated for display. Full text available on Congress.gov.]