AB 116 Summary

• Suspends cost-of-living adjustments for state preschool and childcare reimbursement rates for fiscal years 2023–24 and 2024–25, with any adjustments subject to ratified agreements and future legislation.

• Reduces family fees to 1% of monthly income effective October 1, 2023, eliminates fees for families below 75% of state median income, and appropriates $56,000,000 to compensate providers for waived or reduced fees.

• Delays implementation of requirements to reserve 7.5% and 10% of preschool enrollment for children with exceptional needs by two years, to July 1, 2025 and July 1, 2026 respectively.

• Requires use of an alternative cost-based methodology to set childcare reimbursement rates; if not approved by federal authorities, mandates a market rate survey.

• Codifies income calculation rules allowing families experiencing income fluctuation to average income from at least 2 months (up to 12 months) to determine eligibility and fees, effective January 1, 2024.