(a) The Superintendent shall administer the Early Learning and Care Infrastructure Grant Program to expand access to early learning and care opportunities for children up to five years of age by providing resources to build new facilities or retrofit, renovate, or expand existing facilities pursuant to this section.

(b) Notwithstanding any other law, the Child Care Facilities Revolving Fund shall remain operative for the sole purpose of collecting deposits derived from the Child Care Facilities Revolving Fund program pursuant to Section 8278.3.

(1) The Superintendent shall deposit all revenue derived from the lease payments or renovation or repair loan payments into the Child Care Facilities Revolving Fund until December 31, 2029.

(2) Local educational agencies and contracting agencies using facilities purchased with funds pursuant to Section 8278.3 before December 31, 2019, shall be charged a leasing fee, either at fair market value for those facilities or at an amount sufficient to amortize the cost of purchase and relocation, whichever amount is lower, over a 10-year period. Upon full repayment of the purchase and relocation costs, title shall transfer from the State of California to the local educational agency or contracting agency. Loans for renovation or repair shall be repaid within a period that does not exceed 10 years.

(3) As of December 31, 2019, the remaining balance of the Child Care Facilities Revolving Fund shall be allocated as follows:

(A) The sum of ten million dollars ($10,000,000) shall be transferred to the Inclusive Early Education Expansion Program, pursuant to Section 8492.

(B) Following the transfer pursuant to subparagraph (A), the remaining balance shall be allocated for the purposes described in this section.

(C) Any balance derived from the ongoing deposits of the lease payments or renovation or repair loan payments after December 31, 2019, shall be allocated through the annual Budget Act process.

(c) The Superintendent shall award infrastructure grants on a competitive basis to early learning and care providers that are not local educational agencies, and operate as a licensed childcare center, preschool, or licensed family childcare home for the following purposes:

(1) Construction of new early learning and care facilities to increase capacity or recover lost capacity as a result of a state or federally declared disaster.

(2) Renovation, repair, modernization, or retrofitting of existing early learning and care facilities to increase capacity or recover lost capacity as a result of a state or federally declared disaster, or make existing early learning and care facilities more resilient for future natural disasters.

(3) Renovation, repair, modernization, or retrofitting of existing facilities for use as early learning and care facilities.

(4) Renovation, repair, modernization, or retrofitting of existing early learning and care facilities to address health and safety or other licensure needs to the extent the applicant can demonstrate a financial hardship, and that failure to correct the issues would result in an inability to provide care. Funds awarded in this category shall be limited to high-need providers based on criteria established by the Superintendent.

(d) The Superintendent shall require all of the following from applicants for the infrastructure grants:

(1) A proposal to increase capacity and local access to subsidized early learning and care programs for children up to five years of age, including children with exceptional needs. The information shall quantify the number of additional children who will be provided with access to subsidized early learning and care programs.

(2) A plan to fiscally sustain the increase in subsidized spaces or programs created through the use of these funds. Subsidies may be funded with private, local, state, or federal funds, but shall be able to demonstrate reasonable expectations of sustainability.

(3) Specific activities and materials for which grant funding will be used.

(4) A description of how the applicant will measure outcomes associated with the proposal submitted pursuant to paragraph (1), as specified by the Superintendent.

(5) An outline of any potential challenges or barriers the applicant will experience or expect to experience in building capacity, including the need for any technical assistance to address the identified challenges or barriers.

(e) The Superintendent shall give priority for grant funding based on the following:

(1) Applicants with a demonstrated need for expanded access to subsidized early learning and care programs as measured by the ratio of children in subsidized early learning and care programs to eligible children in the applicant’s service area.

(2) Applicants in low-income communities, as measured by the proportion of children that qualify for state or federal subsidies for early learning and care programs.

(3) Applicants who plan to use grant funding to serve children that qualify for state or federal subsidies for early learning and care programs.

(4) Applicants serving children from birth to five years of age, inclusive, with exceptional needs in inclusive environments.

(5) Applicants wishing to recover lost capacity as a result of a state or federally declared disaster.

(f) Infrastructure grants may be used for one-time infrastructure costs only, including, but not limited to, universal design facility renovations, retrofitting to meet licensing requirements, the cost of design, engineering, testing, inspections, plan checking, construction management, site acquisition and development, evaluation and response action costs relating to hazardous substances at a new or existing site, demolition, construction, landscaping, or other related costs as determined by the Superintendent.

(g) The Superintendent shall determine the appropriate grant amount for each grantee, based upon factors that include, but are not limited to, the scope of the project, regional costs, the use of universal design to provide inclusive environments, the need to meet licensing requirements or health and safety standards, and the proportion of subsidized children to be served.

(h) The Superintendent shall establish the terms and conditions associated with accepting the infrastructure grant funds awarded pursuant to this section and determine a mechanism for recouping any grant moneys from grantees that do not adhere to those terms and conditions.

(i) The Superintendent shall establish a separate application and grant process for providing grant funds related to paragraph (4) of subdivision (c) that limits grantees to low-income providers who serve a minimum percentage of subsidized children. In establishing this process, the Superintendent shall consult with the State Department of Social Services to ensure grant funds are accessible to the highest need providers and shall consider the timeframe during which health and safety violations are cited and must be resolved.

(j) The grant program shall offer technical assistance to potential applicants before being awarded a grant that includes, but is not limited to, project development support and financial expertise, including assistance with coordinating financing from multiple sources.

(k) Infrastructure grant recipients shall commit to providing program data to the department, as specified by the Superintendent, and participate in overall program evaluation.

(l) (1) There is hereby appropriated two hundred forty-five million dollars ($245,000,000) to the department from the General Fund for the infrastructure grant program established pursuant to this section to be released according to the following schedule:

(A) For the 2019–20 fiscal year, one hundred sixty-one million dollars ($161,000,000).

(B) For the 2020–21 fiscal year, twenty million dollars ($20,000,000).

(C) For the 2021–22 fiscal year, thirty-two million dollars ($32,000,000).

(D) For the 2022–23 fiscal year, thirty-two million dollars ($32,000,000).

(2) The Director of Finance may change the release of funds scheduled in subparagraphs (A) to (D), inclusive, of paragraph (1), if deemed necessary. The director shall notify the Chairperson of the Joint Legislative Budget Committee, or the chairperson’s designee, of the director’s intent to notify the Controller of the necessity to change the release of funds scheduled in subparagraphs (A) to (D), inclusive, of paragraph (1). The total amount released shall not be greater or lesser than the amount appropriated in paragraph (1). The Controller shall make the funds available to the department not sooner than five days after receipt of this notification.

(3) The program established pursuant to this section shall be funded from funds appropriated in this section, funds transferred from the Child Care Facilities Revolving Fund pursuant to Section 8278.3, and federal funds appropriated for this purpose in the Budget Act of 2019. Notwithstanding Section 16304 of the Government Code, of the amount appropriated for this program, the Superintendent shall allocate the funds available for the grants through the 2023–24 fiscal year, in approximately equal amounts each fiscal year as follows:

(A) In the 2019–20 fiscal year, for licensed early learning and care centers that are not local educational agencies, pursuant to this section.

(B) In each fiscal year thereafter, for all licensed early learning and care providers, including licensed family childcare home providers, to the extent the process described in subdivision (n) is complete.

(C) In each fiscal year, up to 5 percent of the amount provided for this program shall be used for the renovation, repair, modernization, or retrofitting of existing early learning and care facilities to address health and safety or other licensure needs pursuant to the process established pursuant to subdivision (i).

(m) Notwithstanding any other provision of this section, the Superintendent, with the concurrence of the executive director of the state board, shall recommend to the Department of Finance and the budget committees of the Legislature by January 1, 2021, any changes to the funding methodology in this section related to the recommendations and priorities provided pursuant to Section 8207.

(n) Before March 1, 2020, the Superintendent, with the concurrence of the Department of Finance, shall establish an appropriate method, process, and structure for grant management, fiscal accountability, and technical assistance and supports for grantees that ensures transparency and accountability in the use of state funds. The Superintendent may set aside up to 5 percent of the total amount appropriated for the program to contract with one or more community development financial intermediaries, state financial entities, or other community-based organizations for these purposes. Beginning in the 2020–21 fiscal year, the Legislature may reassess the total amount set aside for purposes of this subdivision. The Superintendent shall notify the Joint Legislative Budget Committee when this process is established.

(o) For purposes of this section, “state or federally declared disaster” means counties where early learning and care providers are operating subject to a Presidential declaration of an emergency or major disaster, pursuant to the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.), or a Governor’s Proclamation, on behalf of the impacted local government, as authorized by the powers authorized by the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code).

(p) The Superintendent shall provide annual reports, until December 31, 2025, to the Governor and the appropriate policy and fiscal committees of the Legislature on any recommendations for consideration in future budgets, the impact of the grant program in achieving the goals described in this section, recommendations as to whether the program should receive additional appropriations, and any changes that should be considered.

(Amended by Stats. 2019, Ch. 413, Sec. 1. (AB 114) Effective October 2, 2019.)