Subsidized childcare: reimbursement rates: reporting.

The bill now amends Section 10213.5 (definitions) in addition to Section 10227.6, adding the full text of the definitions section including 'alternative methodology,' 'part-time care' (fewer than 25 hours per week), and 'full-time care' (25 or more hours per week).

A new provision requires that if AB 190 or SB 190 is also enacted, additional changes to Section 10227.6 proposed by those bills will be incorporated into this bill, operative only if both are enacted and AB 1981 is enacted last.

Legislative findings are expanded to specifically name Child Care Providers United (CCPU) as representing over 70,000 home-based providers, note that the workforce is almost exclusively female and predominantly people of color, state that an estimated 43 percent of early educators rely on public safety-net support, and identify childcare deserts in tribal communities.

Throughout the bill, the operative concept shifts from using an 'alternative methodology' to establishing a 'single-rate structure informed by the alternative methodology.' This changes the legal framework from adopting a cost-calculation method to codifying a specific rate architecture by statute.

The department is now required to act 'in consultation with the State Department of Education' when establishing new reimbursement rates under the single-rate structure, adding a formal interagency coordination requirement not present in the prior version.

The bill authorizes the department to implement its provisions by means of all-county letters, childcare bulletins, or similar written instructions, providing a flexible administrative implementation mechanism.

The prior version contained detailed implementation milestones (data collection by July 1, 2023; rate elements defined by February 15, 2024; state plan report by May 15, 2024; federal submission by July 1, 2024). The new version removes most of these specific deadlines, reflecting that those dates have already passed and the focus shifts to codifying the resulting rate structure.

The bill's short title changes from 'True Cost of Child Care Act' to 'True Cost of Childcare Act,' and a typo ('Section 10227.6 of of') is corrected to 'Sections 10213.5 and 10227.6 of.'

The document changed from a plain-text legislative bill format to a web page capture that includes site navigation (home, FAQ, search, login), version history listing, publication date (08/27/2026 12:58 PM), and amendment dates. The underlying bill text content appears unchanged.

A new Section 10227.7 is added to the Welfare and Institutions Code, expanding the bill's scope beyond amending Section 10227.6 to also create a standalone section with binding rate-setting requirements.

The department must divide California into five specific geographic regions (defined by county) for rate-setting purposes: Region 1 (34 rural/central valley counties), Region 2 (8 counties including Sacramento and Riverside), Region 3 (Los Angeles only), Region 4 (10 counties including San Diego and Orange), and Region 5 (5 Bay Area counties).

Rates must vary at a minimum by care setting type: license-exempt provider, licensed family daycare home, or daycare center.

Time category rules are specified: the work week runs Sunday midnight to Saturday 11:59 p.m.; families using more than 40 hours per week get the full-time rate for the first 40 hours plus an hourly rate for excess; providers must receive two weeks notice before a change in certified need takes effect.

Age groupings are fixed at four tiers: under 2, age 2, ages 3-5 plus 6-year-olds not yet in first grade, and 6-year-olds in first grade plus 7 and older. Programs serving children of the same age with the same requirements must be reimbursed at the same rate.

Rate enhancements must be stackable: a specific child's reimbursement may include all enhancements for which that child is eligible, with no cap on the number of enhancements that can apply to one child.

Providers must be reimbursed based on maximum certified hours of care regardless of actual attendance, including for variable-schedule families and license-exempt providers offering part-time services.

A new subdivision (p) is added to Section 10227.6 requiring that when the department updates the alternative methodology during the triennial federal Child Care and Development Fund plan cycle, it must use values or selection points reflecting actual established costs of providing care.

An extended hours care rate is set at 125 percent of the base rate, covering certified need from 6:00 p.m. to 7:00 a.m. any day and from 7:00 a.m. to 6:00 p.m. on Saturday or Sunday.

An enhanced inclusion rate is set at 130 percent of base for children with exceptional needs and 160 percent for severely disabled children (those with IFSP, IEP, Section 504 plan, or active incidental medical services plan). The rate is retroactive to the earlier of the referral date or eligibility grant date.

An enhanced transportation reimbursement rate equal to the IRS standard mileage rate is added, with a requirement that providers receiving this rate must record daily miles driven for children receiving transportation services.

Reimbursement rates established under the alternative methodology shall not be reduced below the amounts in effect on the effective date of the act that added Section 10227.7, creating a permanent floor on rate levels.

New reimbursement rates must be implemented for family childcare providers within 90 days of the state and the provider organization representing those providers reaching agreement on the rates.

New Section 1 names the bill the 'True Cost of Child Care Act,' giving it a short title for citation purposes.

New Section 2 adds 13 legislative findings and declarations establishing the policy rationale, including that providers earned only 30 percent of the cost of care in 2024, that 43 percent of early educators rely on public safety-net support, and that childcare deserts are concentrated in low-income, rural, tribal, and communities of color.

Subdivision (g)(2) of W&I Code 10227.6 now requires quarterly implementation updates to continue not only through July 1, 2027, but also until the new reimbursement rates set under the alternative methodology are fully implemented, effectively removing the hard stop date if implementation is delayed.

The phrase 'single rate structure' was changed to 'single-rate structure' (hyphenated) throughout the bill for consistency. Sections were renumbered to accommodate the two new sections at the beginning.

Added an urgency statute declaration (new Section 4) requiring the bill to take effect immediately rather than on January 1 of the following year. The stated necessity is to prevent further delays in transitioning to new reimbursement rate systems for subsidized childcare.

Removed the specific deadline requiring the department to send its transition timeline report to the Joint Legislative Budget Committee Chairperson no later than January 31, 2027, and every subsequent year. The reporting obligation now continues under the general quarterly update requirement until new rates are fully implemented.

Removed the fixed end date of July 1, 2027 for the department's quarterly implementation updates to the Legislature. Updates will now continue without a set end date until the new reimbursement rates under the alternative methodology are fully implemented.

Changed the required vote from a simple majority to a two-thirds majority in each house, which is the constitutional requirement for passing an urgency statute.