Education Code section 8242
(a)
The department, in collaboration with the State Department of Social Services, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.(1)
Parent fees shall be used to pay reasonable and necessary costs for providing additional services.(2)
The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.(b)
(1)(A)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand nine hundred sixty-eight dollars ($12,968).(B)
Commencing July 1, 2021, the standard reimbursement rate for part-day California state preschool programs shall be five thousand six hundred twenty-one dollars ($5,621).(2)
Commencing in the 2022–23 fiscal year, the standard reimbursement rates described in paragraph (1) shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15.(c)
(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:(A)
The 75th percentile of the 2018 regional market rate survey.(B)
The contract per-child reimbursement amount as of December 31, 2021, as increased by the cost-of-living adjustment pursuant to paragraph (2) of subdivision (b).(2)
Commencing July 1, 2022, subject to available funding, the department may issue temporary rate increases to contractors that exceed the rates specified in paragraph (1) and the reimbursement rate supplements described in Section 51 of Chapter 571 of the Statutes of 2022.(3)
In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and the information shall include, but not be limited to, all of the following:(A)
Address, including ZIP Code.(B)
Race and ethnicity.(C)
Gender.(D)
Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.(E)
What types of federal relief funds have been received from the state.(F)
Use of federal relief funds received.(G)
Documentation that the provider met certifications as required by federal law.(4)
Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.(d)
(1)Funding shall be allocated to the State Department of Education, pursuant to paragraph (2), from a portion of funds in Schedule (1) of Item 6100-194-0001 of, and Schedule (1) of Item 6100-196-0001 of, the Budget Act of 2026 to provide a once-per-month, per-child-served cost of care plus rate for providers serving children enrolled in California state preschool programs.(2)
(A)Of the funding described in paragraph (1), funding is hereby allocated to the State Department of Education to provide preschool providers with a monthly cost of care plus rate increase commencing July 1, 2026. The increase per child shall be equal to the amount calculated in clause (iii) of subparagraph (B).(B)
The Department of Finance shall make the following calculations based on data provided by the State Department of Education:(i)
The total cost of providing the statutory cost of living adjustment for preschool programs in the 2026–27 fiscal year pursuant to Section 42238.15 for the preschool programs described in paragraph (1).(ii)
The estimated cost of providing the monthly cost of care plus rates described in subparagraph (E) of paragraph (2) of subdivision (c) of Section 10277.1 of, and paragraph (3) of subdivision (c) of Section 10277.2 of, the Welfare and Institutions Code in the 2026–27 fiscal year based on the estimates of child enrollment for the 2026–27 fiscal year provided by the State Department of Education.(C)
Notwithstanding any other law, for the 2026–27 fiscal year, the cost-of-living adjustment shall be 2.009 percent for the purpose of the calculation in subparagraph (B).(e)
(1)(A)Notwithstanding subdivisions (b) and (c), for the 2023–24 fiscal year and the 2024–25 fiscal year, the cost-of-living adjustment required pursuant to subdivisions (b) and (c) shall instead be zero.(B)
It is the intent of the Legislature that any adjustments in the 2023–24, 2024–25, and 2025–26 fiscal years related to reimbursement for programs funded pursuant to this section will be subject to a ratified agreement, and subject to future legislation providing for appropriations related to the budget bill.(2)
Notwithstanding subdivisions (b) and (c), for the 2025–26 fiscal year, the cost-of-living adjustment required pursuant to subdivisions (b) and (c) shall instead be zero.(3)
Notwithstanding subdivisions (b) and (c), for the 2026–27 fiscal year, the cost-of-living adjustment required pursuant to subdivisions (b) and (c) shall instead be zero.(f)
Commencing July 1, 2026, the cost-of-living adjustment shall be applied consistently with subdivision (m) of Section 10227.6 of the Welfare and Institutions Code.
Source:
Section 8242, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC§ionNum=8242. (updated Jun. 29, 2026; accessed Jul. 20, 2026).
