(a) The cost of child care services provided under this article shall be governed by regional market rates. Recipients of child care services provided pursuant to this article shall be allowed to choose the child care services of licensed child care providers or child care providers who are, by law, not required to be licensed, and the cost of that child care shall be reimbursed by counties or agencies that contract with the department if the cost is within the regional market rate. For purposes of this section, “regional market rate” means care costing no more than 1.5 market standard deviations above the mean cost of care for that region. It is the intent of the Legislature to reimburse child care providers at the 85th percentile of the most recent regional market rate survey.

(b) The regional market rate ceilings shall be established at the greater of either of the following:

(1) The 75th percentile of the 2016 regional market rate survey for that region.

(2) The regional market rate ceiling that existed in that region on December 31, 2017.

(c) Reimbursement to license-exempt child care providers shall not exceed 70 percent of the family child care home rate established pursuant to subdivision (b).

(d) Reimbursement to child care providers shall not exceed the fee charged to private clients for the same service.

(e) Reimbursement shall not be made for child care services when care is provided by parents, legal guardians, or members of the assistance unit.

(f) A child care provider located on an Indian reservation or rancheria and exempted from state licensing requirements shall meet applicable tribal standards.

(g) For purposes of this section, “reimbursement” means a direct payment to the provider of child care services, including license-exempt providers. If care is provided in the home of the recipient, payment may be made to the parent as the employer, and the parent shall be informed of his or her concomitant legal and financial reporting requirements. To allow time for the development of the administrative systems necessary to issue direct payments to providers, for a period not to exceed six months from the effective date of this article, a county or an alternative payment agency contracting with the department may reimburse the cost of child care services through a direct payment to a recipient of aid rather than to the child care provider.

(h) Counties and alternative payment programs shall not be bound by the rate limits described in subdivisions (a) and (b), when there are, in the region, no more than two child care providers of the type needed by the recipient of child care services provided under this article.

(i) (1) Notwithstanding any other law, reimbursements to child care providers based upon a daily rate may only be authorized under either of the following circumstances:

(A) A family has an unscheduled but documented need of six hours or more per occurrence, such as the parent’s need to work on a regularly scheduled day off, that exceeds the certified need for child care.

(B) A family has a documented need of six hours or more per day that exceeds no more than 14 days per month. In no event shall reimbursements to a provider based on the daily rate over one month’s time exceed the provider’s equivalent full-time monthly rate or applicable monthly ceiling.

(2) This subdivision shall not limit providers from being reimbursed for services using a weekly or monthly rate, pursuant to subdivision (c) of Section 8222.

(Amended by Stats. 2018, Ch. 32, Sec. 13. (AB 1808) Effective June 27, 2018.)