WeVote
Log In

Bill

Bill

AB 2258

Early childhood education and childcare: alternative payment programs.

2025-2026 Regular Session

Creates CAPSP to expand subsidized childcare by reallocating unspent funds, adding payroll support, increasing eligibility, and boosting provider reimbursements.

From committee: Do pass and re-refer to Com. on APPR. (Ayes 4. Noes 0.) (June 29). Re-referred to Com. on APPR.
#earlychildhoodeducationandchildcare #alternativepaymentprograms
0
WeVote Research Nonpartisan
Bill Summary · AB 2258

Purpose and big picture

AB 2258 proposes to expand and reorganize California’s approach to funding and delivering subsidized childcare and early childhood education. The bill creates a dedicated California Alternative Payment Support Program (CAPSP) to augment current funding for alternative payment programs (APPs), shifts unspent funds from existing subsidized childcare programs into a new enrollment fund to boost CAPSP, and strengthens eligibility thresholds and-provider reimbursement policies as part of a broader effort to maximize enrollment, continuity of care, and timely access to services.

Key provisions and changes

  • Unspent funds reallocation and enrollment fund (new section 10234.5).

    • The Department of Social Services (DSS) would identify, no less than quarterly, unspent or projected unexpended moneys from subsidized childcare and development programs (general, migrant, CalWORKs Stages 1–3, etc.).
    • These funds would be redirected to the Alternative Payment Program Enrollment Fund in the State Treasury and become continuously appropriated to enroll additional eligible families in APPs.
    • Distribution priorities include contractors capable of enrolling more families, those with waitlists, and maintaining continuity of care. Transfers should avoid administrative delays and not reduce existing funding allocations.

  • California Alternative Payment Support Program (CAPSP) and CAPSP Board (new Chapter 4, 10234.1–10234.4).

    • Establishes CAPSP to augment funding for AP Programs.
    • Creates a CAPSP Board comprising key state officials and two experts in public social services, to administer CAPSP and manage the CAPSP Trust Fund.
    • A dedicated CAPSP Trust Fund is created to be used for financing AP programs; funds become available by appropriation and, after self-sustainability, administration costs are paid from the fund.

  • Payroll contributions to CAPSP (new 10234.4).

    • Beginning July 1, 2027, payroll deductions of 0.03% for employers and 0.01% for workers would fund CAPSP.

  • Eligibility threshold increase (amending 10271.5).

    • The initial and ongoing income-eligibility thresholds for AP services would increase:
    • From 85% to 90% of the state median income (SMI), effective January 1, 2028.

  • Reimbursement rate increase (new 10284.1).

    • Once reimbursement rates based on the new alternative methodology are established (per Section 10227.6), APs must reimburse providers at 100% of the cost of care, rising to 110% one year after the new rates are established.

  • Administrative and regulatory actions.

    • Department may implement certain provisions by all-county letters or bullets before regulations are adopted, with final regulations due by July 1, 2025.

Who would be affected

  • Subsidized childcare and development program administrators (DSS, in collaboration with the Department of Education).
  • Childcare providers and families participating in alternative payment programs.
  • Employers and workers who participate through payroll deductions to fund CAPSP.
  • Local and community-based organizations operating APs and waiting lists.

Timelines and procedural notes

  • CAPSP funding mechanism and payroll contributions become operative on July 1, 2027.
  • Eligibility thresholds increase to 90% of SMI effective January 1, 2028.
  • Regulations implementing subparts (e) and (f) of 10271.5 to be adopted by July 1, 2025.
  • Reimbursement rate changes to 100% (then 110% after the new rates are established) are contingent on the implementation of the alternative methodology.

Fiscal and policy implications

  • Creates a continuously appropriated fund to maximize utilization of unspent funds and broaden enrollment.
  • Establishes a new dedicated funding stream (CAPSP) with a small payroll tax on payrolls to support expanded APs.
  • Aims to reduce waitlists, improve continuity of care, and increase access to subsidized childcare for a broader share of eligible families.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.