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<ns0:Id>20250AB__225898AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2026-03-19</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>2258</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Ávila Farías</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Ávila Farías</ns0:Name>
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<ns0:Title>An act to amend Section 10271.5 of, to add Section 10284.1 to, and to add Chapter 4 (commencing with Section 10234.1) to Part 1.8 of Division 9 of, the Welfare and Institutions Code, relating to public social services.</ns0:Title>
<ns0:RelatingClause>public social services</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Early childhood education and childcare: alternative payment support program.</ns0:Subject>
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<html:p>Existing law, the Child Care and Development 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 authorizes, upon departmental approval, the use of appropriated funds for alternative payment programs to allow for maximum parental choice. Existing law authorizes those programs to include, among other things, a subsidy that follows the family from one provider to another, or choices among hours of service.</html:p>
<html:p>This bill would establish the California Alternative Payment Support Program (CAPSP) for the purpose of augmenting the current funding for alternative payment programs. The bill would require the California Alternative Payment Support
Program Board, which the bill would create in state government, consisting of specified members, to administer the CAPSP. The bill would require the board to manage and invest revenue deposited in the California Alternative Payment Support Program Trust Fund, which the bill would create in the State Treasury, with moneys in that fund available, upon appropriation, to finance alternative payment programs. Commencing July 1, 2027, the bill would require each employer and each worker to pay contributions to the trust fund through a payroll deduction at an unspecified rate with respect to wages, thereby imposing a tax.</html:p>
<html:p>Existing law establishes a threshold for initial or ongoing income eligibility for purposes of services under the act, with the threshold set as a family’s adjusted monthly income that is at or below 85% of the state median income, adjusted for family size, as specified.</html:p>
<html:p>This bill would, beginning January 1,
2028, increase the above-described threshold to 90% of the state median income for services provided through alternative payment programs.</html:p>
<html:p>Existing law requires the State Department of Social Services, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates for subsidized childcare and development services, and to develop and conduct an alternative methodology for ratesetting, as specified. Existing law requires the Governor and the Legislature to, by no later than July 1, 2025, establish reimbursement rates based on the alternative methodology, as specified.</html:p>
<html:p>This bill would require, upon the establishment of those reimbursement rates, alternative payment programs to reimburse providers at 100% of the cost
of care and would require, beginning one year after the establishment of those rates, alternative payment programs to reimburse providers at 110% of the cost of care.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Chapter 4 (commencing with Section 10234.1) is added to Part 1.8 of Division 9 of the
<ns0:DocName>Welfare and Institutions Code</ns0:DocName>
, to read:
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<ns0:LawHeading id="id_65423A6E-F4D7-4668-8CC0-A15D6CB9B454" type="CHAPTER">
<ns0:Num>4.</ns0:Num>
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<ns0:LawHeadingText>California Alternative Payment Support Program</ns0:LawHeadingText>
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<ns0:LawSection id="id_20E04C3F-7E69-46E6-AC46-89D025CE9871">
<ns0:Num>10234.1.</ns0:Num>
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<html:p>For purposes of this chapter, the following definitions apply:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“California Alternative Payment Support Program” or “CAPSP” means the program established pursuant to Section 10234.2.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“California Alternative Payment Support Program Board” or “board” means the board established pursuant to Section 10234.3.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“California Alternative Payment Support Program Trust Fund” or “trust fund” means the trust fund created pursuant to Section 10234.3.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Worker” means an individual employed by, and performing services for, an employer.
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<ns0:LawSection id="id_790AAC57-8A51-4B7F-9A39-8E09BC5C6154">
<ns0:Num>10234.2.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
The California Alternative Payment Support Program (CAPSP) is hereby established for the purpose of augmenting the current funding for alternative payment programs established pursuant to Chapter 3 (commencing with Section 10225).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The board, established pursuant to Section 10234.3, shall administer the CAPSP using proceeds from the trust fund created pursuant to Section 10234.3 for the purpose of funding alternative payment programs pursuant to Chapter 3 (commencing with Section 10225).
</html:p>
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<ns0:LawSection id="id_1A13CEAE-ED80-4A09-8021-9BD6B127F7E7">
<ns0:Num>10234.3.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
There is hereby created in state government the California Alternative Payment Support Program Board, which shall consist of the following members:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The Treasurer, who shall serve as the chair.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Director of Social Services, who shall serve as the vice chair.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The Director of Finance, or the director’s designee.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The Controller, or the controller’s designee.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
An individual with expertise in the provision and financing of public social services, who shall be appointed by the Senate Committee on Rules.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
An individual with expertise in the provision and financing of public social services, who shall be appointed by the Speaker of the Assembly.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The board shall manage and invest revenue deposited in the California Alternative Payment Support Program Trust Fund, which is hereby created in the State Treasury. Moneys in the trust fund shall be available, upon appropriation by the Legislature, to finance alternative payment programs established pursuant to Chapter 3 (commencing with Section 10225).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
After sufficient funds are deposited in the trust fund to be self-sustaining, all costs of administration shall be paid out of moneys in the trust fund.
</html:p>
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<ns0:LawSection id="id_38BE7DCB-A10C-49C6-A8ED-D2FC8F9094C3">
<ns0:Num>10234.4.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
Each employer and each worker shall pay contributions to the trust fund through a payroll deduction at the rate set forth in subdivision (b) with respect to wages, as defined by Sections 926, 927, and 985 of the Unemployment Insurance Code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The rate of contributions shall be ____ percent for employers and ____ percent for workers.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
This section shall become operative on July 1, 2027.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 10271.5 of the
<ns0:DocName>Welfare and Institutions Code</ns0:DocName>
is amended to read:
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<ns0:Num>10271.5.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For purposes of establishing initial income eligibility for services under this chapter, “income eligible” means that a family’s adjusted monthly income is at or below 85 percent of the state median income, adjusted for family size, as specified in subdivision (c).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Notwithstanding paragraph (1), beginning January 1, 2028, for purposes of establishing initial income eligibility for services from alternative payment programs, “income eligible” means that a family’s adjusted monthly income is at or below 90 percent of the state median income,
adjusted for family size, as specified in subdivision (c).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For purposes of establishing ongoing income eligibility under this chapter, “ongoing income eligible” means that a family’s adjusted monthly income is at or below 85 percent of the state median income, adjusted for family size, as specified in subdivision (c).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Notwithstanding paragraph (1), beginning January 1, 2028, for purposes of establishing ongoing income eligibility for services from alternative payment programs, “ongoing income eligible” means that a family’s adjusted monthly income is at or below 90 percent of the state median income, adjusted for family size, as
specified in subdivision (c).
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The Department of Finance shall calculate the state median income for family sizes of one to four, inclusive, by using the most recent census data available on state median family income in the past 12 months by family size. The Department of Finance shall calculate the state median income for family sizes of five and above by using the most recent census data for a family of four and multiplying this number by the ratios for the appropriate family size used in the federal Low-Income Home Energy Assistance Program (42 U.S.C. Sec. 8621 et seq.) and specified in federal regulations at paragraphs (5), (6), and (7) of subdivision (b) of Section 96.85 of Title 45 of the Code of Federal Regulations. The Department of Finance shall update its calculations of the state median income for families according to the methodology provided in this subdivision and provide the updated data to the
department no later than March 1 of each fiscal year.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act and Chapter 3 (commencing with Section 12000) of Part 3 shall not be included as income for purposes of determining eligibility for childcare under this chapter.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Payments made on behalf of a child pursuant to Section 11460, 11461.3, 11461.36, or 11461.4 shall not be included as income for purposes of determining eligibility for childcare under this chapter.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Notwithstanding any other law, guaranteed income payments received by an individual shall not be included as income for purposes of determining
eligibility for childcare under this chapter. For purposes of this subdivision, “guaranteed income payments” are defined as unconditional, recurring, regular cash payments, whether publicly or privately funded, that are intended to support the basic needs of eligible recipients, including, but not limited to, payments provided through pilot programs and projects receiving funding from the California Guaranteed Income Pilot Program (Chapter 16 (commencing with Section 18997) of Part 6).
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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 subdivisions (e) and (f) by all-county letters, bulletins, or similar written instructions until regulations are adopted.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The department
shall adopt regulations implementing subdivisions (e) and (f) no later than July 1, 2025.
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 10284.1 is added to the
<ns0:DocName>Welfare and Institutions Code</ns0:DocName>
, to read:
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<ns0:Num>10284.1.</ns0:Num>
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<html:p>Notwithstanding any other law, upon the establishment of reimbursement rates based on the alternative methodology, as described in Section 10227.6, alternative payment programs shall reimburse providers at 100 percent of the cost of care. Beginning one year after the establishment of those rates, alternative payment programs shall reimburse providers at 110 percent of the cost of care.</html:p>
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