AMENDED IN SENATE AUGUST 21, 2026
AMENDED IN ASSEMBLY APRIL 16, 2026
AMENDED IN ASSEMBLY MARCH 19, 2026
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
96
Introduced by Assembly Member Rogers
(Coauthors: Assembly Members Elhawary and Quirk-Silva)
February 19, 2026
An act to add Sections 10228.2, 10228.3, 10228.4, and 10268.1 10228.2 and 10228.4 to the Welfare and Institutions Code, relating to childcare.
Vote: majority Appropriation: no Fiscal committee: yes Local program: no
LEGISLATIVE COUNSEL’S DIGEST
Existing law, the Child Care and Development Services Act, administered by the State Department of Social Services, requires the department to administer childcare and development programs that offer a full range of services to eligible children from infancy to 13 years of age, inclusive. Existing law requires the department to contract with local contracting agencies for alternative payment programs for childcare services to be provided throughout the state. Existing law then requires alternative payment programs to reimburse childcare providers for providing childcare to eligible children.
This bill would establish a process for would, beginning October 1, 2027, authorize
alternative payment programs with clear contracts and that are in full compliance with certain requirements to submit written requests to the department to transfer funds between providers. for a voluntary temporary transfer of funds. The bill would require the department to respond in writing to the request within 30 calendar days of
receipt, and send a copy of the response to the local childcare planning council, and would require the written response to include the department’s determination and a general explanation of the basis for that determination. The bill would limit the department’s authority to deny a funding transfer request to when verified documentation demonstrates that overenrollment or projected service obligations did not occur during the fiscal year for which the request was made. The bill would require the department to consult with statewide networks of alternative payment program contracts and other childcare and development stakeholders in implementing these provisions. acknowledge receipt of the request within 30 calendar days of receiving it. The bill would require the department to provide the contractor with a written decision within 90 calendar days of receiving the request and notify the local childcare planning council
in writing if a voluntary temporary transfer request is approved. The bill would authorize the department to implement these provisions by means of all-county letters, childcare bulletins, or similar written instructions until regulations are adopted. This bill would also make various other changes relating to the department’s fiscal management of alternative payment programs, including by, among other things,
requiring the department to conduct periodic fiscal reviews during each fiscal year and requiring the department to utilize fiscal projection methodologies, as specified.
The bill would require the department, on or before September 1 of each year, to provide to the Legislature and the Department of Finance, and to publish on its internet website, a summary of childcare and development funds allocated and expended during the prior fiscal year.
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares all of the following:
(a) California has made historic investments in subsidized childcare and early learning to support working families, promote continuity of care, and strengthen the state’s economy.
(b) Ensuring that appropriated childcare and development funds are fully and effectively utilized is critical to advancing the Legislature’s intent and serving eligible families.
(d) Families in the eligibility determination and certification process represent anticipated service obligations that must be reasonably considered in fiscal planning.
(e) Continuity of care, including maintaining siblings within the same contractor when eligible, promotes stability for children and administrative efficiency for the state.
(f)
(c) Transparent and timely fiscal review, including voluntary temporary transfer processes, supports processes support responsible stewardship of public funds.
SEC. 2.
Section 10228.2 is added to the Welfare and Institutions Code, to read:
(a) The department shall prioritize the full and timely expenditure of state- and federal-childcare and development funds allocated to alternative payment programs, consistent with federal and state law.
(b)
10228.2.
(a) The department shall, to the greatest extent practicable, may prioritize expenditure of funds allocated to alternative payment programs within the county or jurisdiction for which the funds were originally allocated before approving transfers outside the county of origin.
(b) Prior to transferring funds allocated to alternative payment programs outside the county of origin, the department shall
may determine that reasonable efforts to maximize enrollment and expenditures within that county have been undertaken and documented.
(c) The department shall may consult with contractors and relevant stakeholders to develop guidance that supports enrollment maximization, fiscal alignment, and continuity of care in alternative payment
programs.
Section 10228.3 is added to the Welfare and Institutions Code, to read:
10228.3.
(a) It is the intent of the Legislature to promote continuity of care and family stability within subsidized childcare programs.
(b) If a family is certified for services through an alternative payment program and remains within its eligibility period, including a 24-month eligibility period, if applicable, the addition of a newly eligible child, including, but not limited to, a newborn child, shall not result solely from enrollment balancing in any of the following occurring:
(1) Disenrollment of the family.
(2) Transfer of the family to another contractor.
(3) Separation of siblings receiving services.
(c) To promote continuity of care and minimize disruption to children and families, the department shall not move or reassign a family to a different contractor or service area if the family is actively enrolled and receiving services through an alternative payment program, unless both the current contractor and the proposed receiving contractor mutually agree in writing to the transfer.
(d) The department shall ensure that fiscal monitoring and enrollment practices of alternative payment programs do not require the separation of siblings or disruption of services if the family remains eligible and sufficient funds have been allocated.
(e) In administering programs under this chapter, the department shall utilize fiscal projection methodologies that reasonably account for all of the following:
(1) Multiyear eligibility periods.
(2) Cross-fiscal-year enrollment patterns.
(3) Reasonable attrition assumptions.
(4) Families in the eligibility determination or certification process who are anticipated to begin services.
(f) To promote fiscal stability and full utilization of appropriated funds, the department may authorize the use of unexpended funds for alternative-payment programs in a subsequent fiscal year if those funds are reasonably attributable to families who were certified for services in the prior fiscal year but had not yet begun receiving care.
(g) This section shall not be construed to require expenditures in excess of appropriated funds or in conflict with state or federal law.
SEC. 4.
Section 10228.4 is added to the Welfare and Institutions Code, to read:
10228.4.
(a) The department shall conduct periodic fiscal reviews during each fiscal year to identify projected overexpenditures and underexpenditures in alternative payment programs and to ensure full and timely utilization of appropriated funds, consistent with state law.
(b) A contractor, county, or other authorized alternative payment program may submit a written request at any time during the fiscal year regarding allocation adjustments, expenditure projections, documented overenrollment, or voluntary temporary transfer of funds between providers.
(c) In evaluating requests submitted pursuant to subdivision (b), the department shall consider projected expenditures, enrollment levels, and the objective of maximizing utilization of appropriated funds consistent with state and federal law.
(d) The department shall provide a written response to a request submitted pursuant to subdivision (b) within 30 calendar days of receipt and shall send a copy of its response to the local childcare planning council in which the requester is located. The written response shall include the department’s determination and a general explanation of the basis for that determination. The department shall take one of the following actions in response to the request:
(1) Approve the funding transfer request, as submitted, and allocate and make available the transferred funds within the same fiscal year for which the request was made.
(2) Conditionally approve the funding transfer request, with the final dollar amount to be determined upon verification, through caseload reports or other documentation demonstrating overenrollment or projected service obligations, that the transfer is justified. Upon verification, the department shall allocate and make available the approved transferred funds within the fiscal year in which the overenrollment or projected service obligation justifying the transfer occurred.
(3) Deny the funding transfer request. The funding transfer request shall only be denied if verified documentation demonstrates that overenrollment or projected service obligations did not occur during the fiscal year for which the request was made.
(e) (1) Fund transfers approved pursuant to this section shall not be deferred, delayed, or reallocated to a subsequent fiscal year if the documented overenrollment, service obligation, or allowable expenditure occurred during the fiscal year for which the request was submitted.
(2) The department shall not recapture, reduce, or otherwise penalize a contractor’s allocation for a fiscal year due to administrative processing delays attributable to the department, including delays in reviewing requests, issuing determinations, or processing allocation adjustments or voluntary temporary transfers.
(3) Administrative or procedural delays by the department shall not serve as the basis for denying a funding transfer request that is otherwise supported by timely and sufficient documentation.
(f) The department shall maintain publicly accessible information regarding voluntary funding transfer requests, including timelines, aggregate transfer amounts, and general program impacts, consistent with state and federal confidentiality requirements.
(g) In implementing this section, the department shall consult with statewide networks of alternative payment program contractors and other childcare and development stakeholders to promote transparency, fiscal alignment, and continuity of services.
(h) 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 section by all-county letters, childcare bulletins, or similar written instructions until regulations are adopted.
(i) This section shall not be construed to require expenditures in excess of amounts appropriated or in conflict with state or federal law.
Section 10268.1 is added to the Welfare and Institutions Code, to read:
10268.1.
(a) Notwithstanding Section 10231.5 of the Government Code, on or before September 1 of each year, the department shall provide to the Legislature and the Department of Finance, and shall publish on its internet website, a summary of childcare and development funds allocated and expended during the prior fiscal year.
(b) The summary shall include, to the extent information is available through existing reporting systems, all of the following:
(1) Total funds allocated statewide, by program type.
(2) Total funds expended statewide, by program type.
(3) Total unexpended funds statewide, by program type.
(c) The department may utilize existing fiscal reports or publicly available documents to satisfy the requirements of this section.
(d) The summary to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code and posted on the department’s internet website.
(e) This section does not require the creation of a new data system.
SEC. 3.
Section 10228.4 is added to the Welfare and Institutions Code, to read:
10228.4.
(a) The department shall prioritize the full and timely expenditure of state and federal childcare and development funds, consistent with federal and state law.
(b) A contractor operating an alternative payment program pursuant to this chapter may submit a written request for a voluntary temporary transfer of alternative payment program funds pursuant to this section at any time during the fiscal year.
(c) (1) Only contractors who possess clear contracts, as defined in Section 10397, and are in full compliance with all contractual funding terms and conditions, fiscal reporting requirements, regulatory requirements, statutory requirements, and other requirements imposed by the department, may submit a written request for a voluntary temporary transfer, as described in this section.
(2) Voluntary temporary transfers, as described in this section, are intended to aid contractors with unforeseen overenrollment that causes overearning of the existing contract.
(3) Contractors who request a voluntary temporary transfer, as described in this section, shall comply with any requirements imposed by the department, which may include, but are not limited to, requirements relating to pausing enrollment, coordinating transfers to other contractors, or other steps intended to minimize overearning by the requesting contractor.
(d) In evaluating requests submitted pursuant to this section, the department shall consider, among other things, projected expenditures, enrollment levels, and the objective of maximizing utilization of appropriated funds consistent with state and federal law.
(e) The department shall provide to the contractor a written acknowledgment of receipt of the request and the accompanying documentation, submitted pursuant to subdivision (b), within 30 calendar days of receipt.
(f) Within 90 calendar days of receipt of the request, the department shall provide the contractor with a written decision regarding approval of the request, including a timeline for the transfer of funds, or denial of the request.
(g) The department shall provide written notice to the local childcare planning council in which the requester is located if a voluntary temporary transfer request is approved.
(h) 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 section by all-county letters, childcare bulletins, or similar written instructions until regulations are adopted.
(i) This section shall become operative October 1, 2027.