The Overview

If you rely on subsidized child care in California, a new state law changes how the state decides what it pays the providers who look after your kids. A California law approved on September 27, 2026, requires the state, when it sets new child care reimbursement rates, to vary them by geographic region and age group, and it extends quarterly reporting on the rates through July 1, 2028. ​

California's AB 1981, a bill on subsidized child care reimbursement rates and reporting, became law when Gov. Gavin Newsom signed it on Sept. 27. Providers had long called for higher payments and a change in how rates are calculated, according to KQED.

What the Law Does

The law directs the State Department of Social Services, in consultation with the State Department of Education, to set reimbursement rates using a single-rate structure informed by an alternative ratesetting methodology, to the extent those requirements are consistent with the approved Child Care and Development Fund state plan. Rates must vary by geographic region and age group, and must include an enhanced rate for nonstandard-hours care and higher inclusion rates for children with special needs.

When new rates are delayed past their target date, the department must give the chairperson of the Joint Legislative Budget Committee a transition timeline. The law also extends quarterly progress reports by one year, through July 1, 2028.

Legislative Status

Asm. Cecilia Aguiar-Curry (D) authored the bill, and seven co-authors joined her. The Assembly passed the bill 74-0 on April 23, the Senate passed it 40-0 on Aug. 30, and the Assembly concurred in Senate amendments 79-0 on Aug. 31. The law takes effect immediately as an urgency statute.

Aguiar-Curry said the law aims to ensure "accountability and transparency" in implementing childcare reimbursement rates. Child Care Providers United called AB 1981 "landmark legislation" to address pay inequities for California childcare providers, in a February 23 statement.

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