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HomeMy WebLinkAboutMINUTES - 11141989 - IO.1 r TO: t 'BOAAD OF SUPERVISORS Contra c r FROM: "�/ - Costa INTERNAL OPERATIONS COMMITTEE 's �: . .,._" - County DATE: S�q"COUt1'CY November 2, 1989 SUBJECT: REPORT ON VARIOUS CHILD CARE ISSUES SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECONMENDATIONS: 1. Acknowledge receipt of the County Administrator' s reports on state legislation dealing with tax credits and deductions for child care expenses (see attachment 1) and on federal child care legislation ( see attachment 2) . 2. Determine from Assemblywoman Speier whether she believes it is feasible to pursue AB 1853 in 1990 or whether it would be more prudent to work toward introducing new legislation in 1991. 3. Refer the oversight of the GAIN child care voucher program to the 1990 Internal Operations Committee ( see attachment 3 ) . 4. Request the Community Development Director to prepare and forward to the County Administrator a written report on the results which have been achieved or are in process resulting from the enactment of Ordinance 88/1, the Child Care Facilities Ordinance, and upon receipt request the County Administrator to distribute the report to the members of the Child Care Task Force for their information. 5. Refer to the Finance Committee the attached report from the County Administrator' s Office (see attachment 4) on the history of Board actions on funding the Child Care Affordability Fund and the Child Care Broker function as well as the coordination and management of child care in the Yes CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COU TY A NIST OR RECOMMENDATION OF BOARD COMMITTEE f� APPROVE SIGNATURE(S): O ERS SUNNE WRIGHT McPEAK ACTION OF BOARD ON ovem e r 14, 1989 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: ATTESTED / GYSO �.I 14`4.� 19P? See Page 4. PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) BY DEPUTY -z- z County and request the Finance Committee to recommend to the Board how these functions should be financed in 1990 and thereafter. 6. Refer to the Finance Committee the report of the Director of Personnel (see attachment 5) ; request the County Administrator to review the availability of funds from the management salary and benefit account to fund the sick and emergency child care program and report his findings and recommendations to the Finance Committee to consider in conjunction with the report of the Director of Personnel. 7. Request the Director of Personnel to meet with the Executive Director of the Contra Costa Child Care Council regarding the child care information and referral program and report his recommendations to our Committee on January 8, 1989. 8. Refer oversight of Child Care Issues and liaison responsibility with the Child Care Task Force to the 1990 Internal Operations Committee and request staff to report to the 1990 Internal Operations Committee and Child Care Task Force on all issues related to child care in May, 1990. 9. Remove as referrals to our Committee the following referrals, leaving on referral the pending report from the Director of Personnel regarding the child care information and referral contract: The December 13, 1988 referral providing our Committee with liaison responsibility to the Child Care Task Force. The March 28 , 1989 referral of the report of the Social Services Director on GAIN Child Care. BACKGROUND: As we have been doing for the past several years, the Internal Operations Committee has been meeting every six months with the Child Care Task Force to update the Task Force as well as ourselves on the status of various child care issues. We held such a meeting on November 2, 1989. We received reports from the County Administrator' s Office indicating that some modest movement was made by the State Legislature in 1989 in making deductions for child care expenses incurred by employers more generous and expanding the definition of those costs which are eligible for the deduction. On the Federal level, considerable progress has been made in enacting major child care legislation in 1989 in that the Senate has passed S 5 and the House of Representatives has passed HR 3 as well as tax features similar in some respects to S 5. It will now be up to a Conference Committee to resolve differences between the various versions of child care legislation and come out with a bill which the President will sign. We are hopeful that this can occur before the end of 1989. Given the attitude of the present State Administration toward child care, it seems unlikely that AB 1853 by Assemblywoman Speier will pass and be signed into law in 1990. We are, therefore, recommending that the Board request that Assemblywoman Speier drop further consideration of AB 1853 for 1990 and consider reintroducing similar legislation in 1991. Karl Wandry from the Community Development Department reported to us in some detail on the impact which the Child Care Facilities Ordinance has had in helping to increase the supply of child care -3- in Contra Costa County. We were also joined by David Edwards, the Child Care Broker, who is an employee of the Child Care Council and who is working closely with the Community Development Department and developers in the County to insure that the requirements of Ordinance 88/1 are followed. A Master Plan study of Child Care is underway in the Oakley area. This is most critical because Oakley currently has 29 child care slots and an identified need for more than 2000 child care slots by the year 2005. Mr. Edwards will also be undertaking a child care study in the Pleasant Hill/BART Station Redevelopment Area. The draft final child care plan for this area is due from the Contra Costa Centre within 180 days from approximately October 1, 1989. This will give us a much better idea of what the child care needs and plans to meet those needs are going to be in this area. Mr. Wandry noted that it may be necessary to amend Ordinance 88/1 in order to clarify and strengthen its provisions. He also noted that there will be a need for more funds for the 1990-91 fiscal year in order to maintain the Child Care Broker function. To date this function has been funded by private developers, foundation grants and County funds. Mr. Wandry hopes that if the Child Care Broker function can be funded for the 1990-91 fiscal year that the Transient Occupancy Tax from the Embassy Suites Hotel will support the Child Care Broker function thereafter. Mr. Wandry summarized for us orally those development projects which have been reviewed under the provisions of Ordinance 88/1. We have recommended that Mr. Wandry put this report in writing so we can share it with all of the Board members as well as the Child Care Task Force and others who are interested in this subject. Yvonne Bullock and Carole Allen from the Social Services Department reported that they are making progress on the GAIN Child Care voucher program and hope to have the program operational by February 1, 1990. We would like the 1990 Internal Operations Committee to continue to provide oversight to this program and insure its timely implementation. Harry Cisterman and members of his staff reported to our Committee that the sick and emergency child care program is on hold because of a lack of funds. We are asking the Finance Committee to consider the possibility of using some of the funds we believe are still available from the management salary and benefit account to finance this program. Mr. Cisterman also noted that agreements with employee organizations are including a provision that employees may use their sick leave flexible either for personal or family illness. Mr. Cisterman indicated that he would like to meet further with Kate Ertz-Berger, Executive Director of the Contra Costa Child Care Council and report back to our Committee January 8 , 1990 on the child care information and referral program for county employees and we are asking that this item be left on referral to our Committee for this purpose. Ms. Ertz-Berger shared with our Committee a summary of what various cities are doing about their child care needs (see attachment 6) . Jim Kennedy summarized for our Committee his revised estimates for the Transient Occupancy Tax and sales tax which can be expected to be generated from the Pleasant Hill/BART Station redevelopment project area (see attachment 7) . Supervisor McPeak noted that the Concord Convention and Visitors Bureau has asked whether the County will be sharing some of the Transient Occupancy Tax from the Embassy Suites Hotel with them. t -4- Supervisor McPeak indicated that this is not possible because all of the TOT from the Embassy Suites Hotel has been dedicated to the coordination and management of the child care system in the County as well as to support the Child Care Broker system. She suggested that this could include the increase in TOT resulting from increasing the level of TOT in the County and cities. Supervisor Powers indicated that he was opposed to using the sales tax from the Pleasant Hill/BART Station for child care or, in fact, dedicating it to any specific program prior to the time it becomes available. He indicated that he would support dedicating 1% of the 8. 5% TOT at the Embassy Suites Hotel to child care but that it should be dedicated to the Child Care Affordability Fund because there is such a great need for subsidized child care in the County. Mr. Kennedy indicated that 10 of the 8. 5% TOT at Embassy Suites Hotel would generate about $62,000 annually. Supervisor Powers noted that since Richmond' s TOT is only at 6% he might ask that they increase their TOT and dedicate the increased revenue to child care. Supervisor McPeak indicated that the Board of Supervisors has already dedicated some percentage of the TOT from Embassy Suites to the coordination and management of the child care system. Supervisor Powers noted that he wants child care affordability funded first and will not support having the TOT money go to the cost of administering the child care system or to the Child Care Broker function. Because of some confusion regarding exactly what the Board of Supervisors has done in the past in making commitments on the use of the TOT from Embassy Suites Hotel, the County Administrator' s Office was asked to include as an attachment to this report (attachment 4) a summary of all Board actions relating to the dedication of revenue from the Pleasant Hill BART Station development to child care. We are asking that this subject be referred to the Finance Committee to determine how to fund the child care affordability fund, the coordination and management of the child care system and the Child Care Broker function and that the Finance Committee return their recommendations to the Board for the Board' s further consideration. cc: County Administrator Director of Personnel Community Development Director Social Services Director Jim Kennedy, Redevelopment Agency, CDD Child Care Task Force (Via CAO) Kerry Harms-Taylor, Assistant Administrator-Finance OFFICE OF THE COUNTY ADMINISTRATOR CONTRA COSTA COUNTY Administration Building 651 Pine Street, 11th Floor Martinez, California DATE: October 31, 1989 TO: Supervisor Tom Powers .Supervisor Sunne W. McPeak INTERNAL OPERATIONS COMMITTTEE FROM: Claude L. Van Marter ll' Assistant County Adm trator SUBJECT: STATUS REPORT ON LEGI LATION DEALING WITH TAX CREDITS AND DEDUCTIONS FOR CHILD CARE EXPENSES Following, for your information, is an updated report on the legislation relating to income tax credits and deductions for child care expenses. AB 446 - Hansen (As amended August 22, 1989) Under the current Personal Income Tax and Bank and Corporation Tax laws a tax credit is allowed in an amount equal to 50% of the cost, up to $600 for each contribution to a full-time qualified care plan and $300 for each contribution to a part-time qualified care plan. "Qualified care plan" , under current law, includes, but is not limited to, onsite service, center-based service, in-home care or home-provider care, providing the facility is located in California and is licensed if licensing is required by state law. AB 446 adds to this definition of a "qualified care plan" a dependent care center. "Dependent Care Center" is defined as a specialized facility with respect to short-term illnesses of an employee' s dependents. AB 446 was amended on April 18, 1989 to add a definition of "specialized center" , which means a facility which provides care to mildly ill children and which may do all of the following: be staffed with pediatric nurses and day care workers, admit children suffering from common childhood ailments, make special arrangements for well children with minor problems associated with diabetes, asthma, breaks or sprains, or who are recuperating from surgery, and which may separate children according to their illness in order to protect them from cross-infection. AB 446 was amended August 22, 1989 to incorporate the changes made to some of these same sections made by AB 951 (see below) so 'that if AB 446 were chaptered after AB 951 it would not "chapter out" the provisions of AB 951. AB 446 passed the Assembly On May 25, 1989 by a vote of 73:0 and the Senate September 1, 1989 by a vote of 37:0 The bill was signed into law by the Governor on September 29, 1989 and is now Chapter 1042, Statutes of 1989. The bill included an urgency clause and therefore became effective September 29, 1989 upon being signed by the Governor. AB 802 - Klehs (As amended September 12, 1989. ) AB 802 increases the credit which is allowed against net tax for the startup expenses incurred on or after September 23 , 1988 in establishing a child care program or constructing a child care facility .in California, to be used primarily by the children of the taxpayer' s employees or for contributions to child care information and referral services from $30,000 to $50,000 in anyone year. The bill provides that it shall remain in effect only until December 1, 1992, although any unused credits could be carried forward to future years until exhausted. AB 802 also increases the credit which is allow for contributions to a part-time qualified care plan made on or after September 23 , 1988 from $300 to $600, the same as the amount allowed for a contribution to a full-time qualified care plan. The bill also provides that it shall remain in effect only until December 1, 1992, although any unused credits could be carried forward to future years until exhausted. AB 802 also incorporates amendments made by AB 446 (see above) adding the definition of "Specialized Center" so that if both bills were passed and AB 802 were chaptered after AB 446 it would not "chapter out" the provisions of AB 446. AB 802 passed the Assembly May 25, 1989 by a vote of 72:0 and the Senate on September 14, 1989 by a vote of 24:6. The bill has been signed into law by the Governor October 2, 1989 and is now Chapter 1352, Statutes of 1989. The bill also contained an urgency clause and therefore became effective October 2, 1989. AB 951 - Woodruff, Eastin and Leslie (As amended August 24, 1989) AB 951 limits the total costs which can be considered for the 30% deduction for startup expenses and information and referral services to $100,000 per taxable year and provides that no more ' -3- than $30,000 of net tax could be reduced in any one year. The bill also provides that the 50o deduction for contributions made to a qualified care plan would include only costs incurred after September 23, 1988. AB 951 was amended July 12, 1989 to incorporate the changes made to these same section by AB 446 (see above) so that of AB 951 is chaptered after AB 446 it will not "chapter out" the provisions of AB 446. AB 951 passed the Assembly June 8, 1989 by a vote of 78:0, and the Senate on September 1, 1989 by a vote of 37:0. The bill was signed into law by the Governor on October 1, 1989 and is now Chapter 1314, Statutes of 1989. The bill contained an urgency clause and therefore became effective on October 1, 1989 upon being signed by the Governor. Because of the interlocking nature of AB 446, AB 951 and AB 802, it is necessary to carefully track what happened when all three bills were signed into law. The provisions of AB 951 which incorporated the changes proposed by AB 446 took effect and superseded AB 446 because AB 951 was chaptered after AB 446. AB 802, in turn, contains provisions contained in AB 446 as well, but does not reference AB 951. Therefore, since AB 802 was chaptered after both AB 446 and AB 951, the sections of AB 802 which contain the amendments made by AB 446 take effect and AB 802 also chapters out the increase in the allowable deduction to $100,000 made by AB 951. In summary, then, the change made in the law include the following provisions: 1. The allowable credit for startup expenses or a contribution to an information and referral service is 300 of those costs but the maximum which can be taken in any year is increased from $30,000 to $50,000 for costs incurred on or after September 23 , 1988. 2. The allowable credit for contributions to a full-time qualified care plan remains at $600, but the credit for contributions to a part-time qualified care plan is increased to $600 from $300 . 3. The definition of "qualified care plan" is broadened to include a dependent care center as defined in federal law, which is a "specialized center" with respect to short-term illnesses of an employee' s dependents. 4. A definition of "specialized center" is added to mean a facility which provides care to mildly ill children and which may provide all of a variety of specified services. 5. These increased deductions remain in effect only until December 1, 1992. -4- AB 1518 - Wright , (As amended May 2, 1989) Under current law the State of California allows a tax credit of 300 of the allowable federal child care tax credit. There is no income ceiling on the availability of this tax credit. This credit is generally not available unless at least one parent is working. AB 1518 would permit, as an alternative to the above provision, a tax credit of $216 for one child or $432 if there are two or more children in the home under the age of 5 as of the last day of the taxable year. There would be no requirement that at least one parent be working. This credit would be reduced by loo for each $2000 by which the taxpayer' s adjusted gross income exceeds $22,000. No credit would be allowed if the taxpayer's adjusted gross income exceeded $40,000. If the tax credit exceeded net tax liability for the year the credit could be carried over to any of the next three succeeding years, but would not be paid as an actual rebate. A taxpayer could not make use of this provision if he or she is eligible to a tax credit under the 300 of the federal child care tax credit provision. Therefore, this provision would primarily be available to those parents where neither is working but there are still eligible child care expenses, as, for instance, in the case of a single parent household where the parent is going to school or is otherwise engaged in a training program. The tax credit would be in effect for taxable years beginning on or after January 1, 1989 and continuing through December 1, 1995. However, any unused tax credit could be carried over for three succeeding years. . AB 1518 failed passage in the Assembly Revenue & Taxation Committee on May 8, 1989 and has been returned to the Chief Clerk of the Assembly. The bill cannot be considered again. AB 1645 - Polanco (As amended June 29, 1989) Under current law the State of California allows until January 1, 1993, a tax credit of 30o ,of the allowable federal child care tax credit. There is no income ceiling on the availability of this tax credit. AB 1645 would reduce the percentage of the federal child care tax credit which was available as a credit for state taxes from 300 to 25% if the taxpayer' s adjusted gross income is between $30,000 and $40,000 and reduce the credit from 30% to 20% if the taxpayer' s adjusted gross income is over $40,000 . The credit would remain 30%. for taxpayers with incomes under $30,000. The bill would make this provision effective January 1, 1989 until January 1, 1993 . =5- In , addition, AB 1645 would require the Franchise Tax Board to calculate the dollar value of the credits which are disallowed as a result of this change in the amount of child care which is allowable and would transfer that amount of money to the State Department of Education to use in connection with existing child care programs for the purchase, lease, acquisition, repair or renovation of facilities by qualified public and private providers for the sole purpose of using the facilities to provide child care and development services. In addition, the funds could be used for program startup grants to provide nonsubsidized child care and development services in facilities acquired, leased, repaired or renovated with these funds. The funds could also be used to initiate and maintain direct service programs in facilities funded with these funds. The bill also appropriates $1 million for each taxable year to the Program Development Fund to provide services to the developmentally disabled. The State Department of Education is authorized to withhold not less than 1. 1% and not more than 1. 5% of the funds appropriated as noted above for its administrative expenses in connection with the disbursement of funds under the bill. The bill has passed the Assembly Revenue & Taxation Committee and the Assembly Ways and Means Committee. However, on July 1, 1989 passage was refused on the Assembly floor when the bill received only 18 "aye" votes to 43 "no" votes. AB 2382 - Klehs (As amended July 20, 1989) In regard to deductions and credits for child care expenses, AB 2382 makes changes which are identical to those made by AB 802 (see above) and similar in all but technical details to those made by SB 85 (see below) . AB 2382 passed the Assembly Revenue & Taxation Committee on July 19,1989 by a vote of 8:0 and the Assembly Ways & Means Committee August 29, 1989 by a vote, of 18:1. The bill was placed on the inactive file on the Assembly Floor by Assemblyman Klehs on September 1, 1989 and was not considered again before the end of the Session. SB 85 - Garamendi (As amended June 20, 1989) Under current law, a taxpayer is allowed an income tax credit equal to 30% of the costs for the startup expenses of establishing a child care program or constructing .a child care facility in California, to be used primarily by the children of the taxpayer' s employees. The credit is also available for 30 % of the cost of contributions to California child care information and referral services. Current law limits the total credit which may be taken for these items to $30,000 in any year. SB 85 would increase this amount to $50,000. Current law also allows an income tax credit for contributions to a qualified care plan made on behalf of any dependent of the taxpayer' s California employee who is under the age of 15. Current law limits the credit to $600 for a full-time qualified care plan and $300 for a part-time qualified care plan. SB 85 eliminates this distinction between full-time and part-time qualified care plans and allows the $600 credit for either type of plan. SB 85 passed the Senate Revenue & Taxation Committee by a vote of 5: 1 and is currently on referral to the Senate Appropriations Committee. SB 540 - Rogers (As amended April 18, 1989) Under current law the State of California allows a tax credit of 30% of the allowable federal child care tax credit. There is no income ceiling on, the availability of this tax credit. SB 540 would, in addition, provide a refundable credit based on the number of children under the age of 6 in the taxpayer' s care and the income of the taxpayer. The total credit could not exceed 70 of the taxpayer' s adjusted gross income. If the taxpayer' s adjusted gross income is not more than $5,326.23 the credit would be 7% of adjusted gross income. If the taxpayer' s adjusted gross income is more than $5,326.23 , the credit would be the following amounts for each child under the 'age of 6, not to exceed 7% of adjusted gross income: INCOME CREDIT PER CHILD Not more than $18,000 $400 $18 ,001 - $21,000 $350 $21,001 - $24,000 $300 $24,001 - $27 ,000 $250 $27,001 - $30,000 $200 More than $30,000 $150 The child care credit would be reimbursed to the taxpayer if the credit exceeded actual tax liability. This credit would be operative January 1, 1991. -7- SB 546 is currently on referral to the Senate Revenue & Taxation 'Committee. CLVM:nrl childleg cc: Kate Ertz-Berger, Executive Director Contra Costa Child Care Council 0 OFFICE OF THE COUNTY ADMINISTRATOR C O N T R A C O S T A C O U N T Y Administration Building 651 Pine Street, 11th Floor Martinez, California DATE: October 31, 1989 TO: Supervisor Tom Powers Supervisor Sunne W. McPeak INTERNAL OPERATIONS CO ITTEE FROM: Claude L. Van Marter Assistant County Admerator SUBJECT: STATUS OF FEDERAL CHILD CARE LEGISLATION We understand that the following represents the current status of efforts to enact federal child care legislation: 1. The Senate on June 23 , 1989 passed S 5. The ABC portion of the bill would authorize a total of $1.75 billion for fiscal 1990, 700 of which would be used to provide direct services to children in families with incomes lower than the state median. It would authorize another $100 million for states to help child-care providers obtain liability insurance, and would create a committee to draft model standards regarding health and safety, training, and staff-child ratios. States would be required to set minimum standards for child care, but, under an agreement with the nation' s governors, could decide for themselves how stringent those standards should be. The' tax portion of the measure would create a new credit of up to $500 to help low-income families with children offset the costs of health insurance premiums they are required to pay for coverage. It would make both the new credit and the existing dependent-care tax credit refundable and thus available to families with incomes too low to owe federal income taxes. And, it would create a "young child" supplement to the earned-income tax credit (FITC) that would provide up to $500 for low-income working families with one child under age 4, and up to $750 for families with two or more such children. Attached is a more detailed analysis of each of the provisions of S 5 as it passed the Senate. 2. The House Education and Labor Committee on June 27, 1989 approved its own $1.78 billion child-care authorization bill, HR 3. As approved, HR 3 would authorize $1.78 billion in fiscal 1990 to make child care more available and affordable to low-income working families with children. HR 3 contains provisions similar to S 5 in terms of requiring states to set their own standards for child-care and calling for the creation of "model" standards states could adopt if they so desire. HR 3 provides a much more sweeping Head Start expansion than does S 5. HR 3 would authorize $438 million to expand existing Head Start programs to operate full-day, year-round as well as to increase the income threshold for eligibility. HR 3 also would authorize $438 million for a new program of school-based child care, creating a grant program to be overseen by the Secretary of Education. Grant funds could be used to provide early-childhood development programs or before and after-school care for low-income children with parents who work or are involved in education or training programs. Unlike S 5, HR 3 does not include any of the tax-credit features, since in the House the Ways and Means Committee has exclusive jurisdiction over tax legislation. 3. The House Ways and Means Committee has included in the budget reconciliation bill their own version of the tax-credit provisions of S 5. This proposal includes a major expansion of the existing earned-income tax credit (EITC) . This proposal would increase the credit from 14% to 17% for families with one child, and would adjust it for family size, providing larger credits for families with two or more children ( 21%) and those with three or more children ( 250) . Under current law, the credit is phased out gradually. For every dollar in income that exceeds $10,240, the credit is reduced by 10 cents, until it is completely phased out at incomes above $19,340. These income thresholds are indexed for inflation. Under the Ways and Means proposal, the phase-out percentages would be speeded up, from loo to 12% for families with one child, 15% for families with two children, and 18% for families with three or more children. Thus, in 1991, the first year the proposal would take effect, the maximum -3- credit, instead of the currently projected $1002, would be $1217 for families with one child, $1504 for families with two children and $1790 for families with three or more children. These maximums would continue to rise with inflation. Similar to S 5, the Ways & Means proposal would add even more for families with small children. Families with one or more children under age 6 would receive a "supplemental young child credit" of 60, up to the EITC maximum threshold. In 1991, it could provide families an additional $430. The Ways & Means proposal also adds $1. 55 billion over the next four fiscal years to increase funding for child care under the Social Services Block Grant, which is Title XX of the Social Security Act. The current cap on Title XX is $2.7 billion, although other provisions already approved by Ways & Means will increase this cap to $3.3 billion in fiscal 1993 . The Ways & Means proposal would increase the cap by an additional $350 million in fiscal 1991 and $400 million in fiscal 1992 and thereafter. These additional funds would be earmarked for child care, with . states required to use 80% for provider services and 20% for administrative costs, training and enforcement of child-care standards. Similar to both S 5 and HR 3, the Ways & Means proposal would require states, within three years of enactment, to establish health and safety standards for virtually all child-care providers. States would also have to require training for child-care providers who receive public funds. The plan would authorize $75 million for states to improve their child-care standards. The Ways & Means package does not make the existing dependent-care tax credit refundable, a provision which is included in S 5. As a result of the failure to reach a compromise between HR 3 and the Ways & Means proposal, both proposals were contained in the budget-reconciliation legislation, HR 3299. Since we understand that all added legislation was stripped out- of the budget reconciliation bill by the Conference Committee, it appears that S. 5, HR 3 and the Ways & Means proposals will have to be passed as separate legislation in order to get them into a conference committee where the differences among the various proposals can be ironed out. CLVM:nrl chldcare cc: Kate Ertz-Berger, Executive Director Contra Costa Child Care Council FOR THE RECORD c PROVISIONS Senate Approves Tax Credits,, Subsidies 1 for Child Care Capping two weeks of partisan politicking,the SenateJune 23 passed a comprehensive bill (S 5) aimed at helping low- and moderate-income families obtain '" and pay for child-care services. Officially, the measure as passed is still called the Act for Better Child Care Services(and still known as the ABC bill), But the final product bears scant resemblance to the ?" ; version of ABC ordered reported (S Rept 101-17) by the a r Senate Labor and Human Resources Committee March 15. .lh (Weekly Report pp. 1543, 585) „l Patched together by Senate Majority Leader George J. r. Mitchell, D-Maine, S 5 as passed includes a scaled'-back and watered-down version of ABC,a package of tax credits aimed at low-income working families, revenue provisions to offset their cost, and an overhaul of the controversial "Section 89" rules to prevent discrimination in the provi- SUE KLEMENS sion of health insurance and other employee benefits. to parents of an eligible child. Stipulates that the certificate The bill picked up other unrelated riders during floor may be used only for payment for child-care services for an consideration, including a relaxation of the Social Security eligible child to an eligible provider, and that the certificate retirement test, which limits how much retirees under age guarantees the provider payment for such services at the same 70 may earn from work and still receive full benefits,and a rate charged by that provider for comparable services to rewrite of federal law prohibiting desecration of the Ameri- children whose parents are not eligible for federal or state financial assistance. can flag. (Social Security test, Weekly Report pp. 1550, • Defines as an"eligible child"one who is under age 13,whose 1472; flag desecration, pp. 1622, 1547) family income does not exceed 100 percent of the state median The ABC portion of the bill would authorize a total of income for a family of that size,who lives with a parent or parents $1.75 billion for fiscal 1990, 70 percent of which would be who are working,job-hunting or enrolled in a job-training or used to provide direct services to children in families with educational program,or who is receiving or needs to receive incomes lower than the state median. It would authorize protective services. another$100 million for states to help child-care providers •Defines"eligible child care provider"as a center-based pro- obtain liability insurance,and would create a committee to vider,group-home provider, family provider or other provider draft model standards regarding health and safety, train- of child-care services for pay who is licensed or regulated under ing, and staff-child ratios. States would be required to set state law,satisfies federal,state and local requirements appli- minimum standards for child care, but, under an agree- cable to the type of services provided,and,within three years of ment with the nation's governors, could decide for them- enactment, complies with state standards as required under the selves how stringent those standards should be. act. The tax portion of the measure would create a new Also defines as eligible providers individuals aged 18 or older credit of up to$500 to help low-income families with chil- who provide child care to an eligible child who is"by affinity or consanguinity,or by decree of court,the granchild,niece, dren offset the costs of health insurance premiums they are nephew or sibling"of the provider,if the provider complies with required to pay for coverage. It would make both the new applicable state standards for care by relatives. credit and the existing dependent-care tax credit refund- •Defines as a"family child care provider"one who provides able and thus available to families with incomes too low to child-care services for fewer than 24 hours per day,as the sole owe federal income taxes. And it would create a "young caregiver, in a private residence. child"supplement to the earned-income tax credit(FITC) •Defines"group home child care provider"as two or more that would provide up to $500 for low-income working individuals who jointly provide child-care services for fewer families with one child under age 4, and up to $750 for than 24 hours per day in a private residence. families with two or more such children. is Defines"full working day"as at least 10 hours per day. As passed, S 5 includes the following major provisions: •Defines "school-age child care services"as those provided during times of the school day when regular instructional Title 1 (ABC): Definitions services are not in session and that are not intended as an extension of, or replacement for, the regular academic program, •Defines"caregiver"as an individual who provides services but are intended to provide an environment"which enhances the directly to an eligible child on a"person to person basis." social, emotional, and recreational development of children of •Defines"center-based child care provider"as one who provides school age." services in a non-residential setting. Funding Authorizations •Defines "child care certificate"as a certificate issued by a state •Child-Care Funding. Authorizes a total of$1.75 billion for fiscal 1990 and "such sums as may be necessary" in each of By Julie Rosner fiscal 1991-94. CQ JULY Si 1989 — 1725 FOR-THE RECORD •Stipulates that of the amounts appropriated in fiscal 1993 and eligible for ABC funding or funding from other public pro- 1994, 10 percent'shall be made available to states for grants to grams,and,at the option of the state, to other child-care improve their health and safety standards(See Child Care Stan- personnel in the state;and that services are available for an dards Improvement Incentive Grants, below), but such amount adequate number of hours and days to serve parents of eligible may not be less than$35 million nor more than$75 million. children, including parents who work non-traditional hours. •Head Start.Increases the authorization for the Head Start Funding Rules, Allocations . program for fiscal 19%from$1.405 billion to$1.552 billion. The House March 21 passed a bill(HR 1300) boosting the Head •Funding for Direct Services.Requires the state to use at Start authorization the same amount. (Weekly Report p. 653) least 70 percent of its allotment to provide child-care services to •Liability Risk Retention Groups.Authorizes an additional eligible children on a sliding-fee scale,with priority given to $100 million for fiscal 1990 that states may use to establish and services for children of families with very low incomes, taking operate child-care liability risk retention groups to help child-care into consideration the size of the family,or children with special providers obtain affordable liability y insurance. needs.•Requires that at least 10 percent of the 70 percent amount be *Stipulates that amounts appropriated for fiscal 1990 shall remain available for fiscal 1991 and 1992. used for the extension of part-day programs, including Head •Payments to Territories, Indians. Of the amount of the Start and preschool programs for children with handicaps. $1.75 billion authorization appropriated, requires that half of 1 •Permits the state, with the approval of the secretary of health percent for each fiscal year be reserved for payments to Guam, and human services (HHS), to use up to 5 percent of the 70 American Samoa, the Virgin Islands, the Northern Mariana percent amount for activities to increase the availability of child Islands,the Marshall Islands,Micronesia and Palau.Also requires care, including making grants or low-interest loans to existing that between 1.5 percent and 3 percent of appropriated funds and potential family child-care providers and non-profit child- in each fiscal year be reserved to provide services for Indian care providers to help them pay start-up costs, finance renova- children. tions or improvements, or meet applicable health and safety Allotment Formula. Requires that the remainder of standards. Such funds may be used only if the state certifies •State Althat additional funds are needed to increase the availability of funds be lotmalloted to states based on a formula taking into account each state's per capita income compared with the national child care to meet the demand for such care- per capita income,along with the number of children under age. *Quality pencImprovements. Requires states to use at least f 5 and the number of low-income children receiving free or percent a their annual allotment to improve the quality al reduced-price school lunches. child care available in the state,including providing financial help for the development, establishment, expansion, operation and State Responsibilities coordination of child-care resource and referral programs. •Lead Agencies/Child-Care Boards. Requires governors of Funds could also be used to improve enforcement of licensing states wishing to participate in the program to appoint a lead and regulatory standards,to provide training,technical assistance agency to carry out program requirements and coordinate services and scholarship aid to child-care providers and personnel,to provided by other agencies. Governors could,,as an alternative, ensure that adequate salaries and benefits are paid to personnel of establish a seven-member state child-care board to carry out such providers receiving funds under the program,and for grants to activities. local libraries for the purchase and delivery of children's books, videos,tapes and toys to eligible providers. •State Application and Plan.Requires states,in order to •Availability of Child Care.With the exception noted above, receive funds, to submit an application containing plans for a requires states to use no more than 12 percent of their annual program to be implemented during a three-year period. allotment to increase the availability of child-care services within •Requires that the plan identify the lead agency or members of the state. In addition to the activities noted above, states could the state child-care board and demonstrate that the state will use funds for child care public-private partnership activities establish a 21-to-30-member state advisory committee on child authorized under the act(see below),for the establishment of care to assist the lead agency in carrying out its responsibilities. after-school child-care programs, for the temporary •State Policies and Procedures. Requires that the plan set P po ary care ld care �q � P dren who are sick and unable to attend their regular child-care forth policies and procedures designed to ensure that: parents programs, for the establishment and operation of child-care of eligible children receiving assistance be permitted, to the programs for homeless children and for assistance to link child- "maximum extent practicable,"to select their child-care pro- care programs with programs designed to assist the elderly. vider;all providers of child-care services comply with all appli- States could also use funds to establish and administer a cable state or local licensing or regulatory requirements; proce- revolving loan fund to help those who wish to make a capital dures be established to ensure that within three years, all improvement in order to become a licensed or regulated family child-care providers operating publicly assisted programs com- child-carerovider,as well as to make ply with state child-care health and safety standards required P grants to school districts for the establishment or maintenance of extended-day programs. under the act;states not reduce the categories of child-care • providers licensed or regulated by the state nor the level of Distribution of Funds.Requires that funds be distributed to standards applicable to child-care services provided as of the a variety of types of child-care providers, including center- date of enactment,unless the state,with the concurrence of the based, group-home and family providers,and that funds be state advisory committee, requests a waiver and demonstrates distributed equitably to rural and urban areas. that the proposed reduction is necessary to increase access to and •Payment Rates. Requires the state plan to provide that availability of eligible child-care providers and will not jeopar- providers receiving ABC funds "shall have a right to payment dize the health and safety of children;ABC funds be used only to at the same rate charged by providers in the state or substate area supplement and not to supplant federal,state and local funds for comparable services to children of comparable ages and already being spent for the support of child-care services and special needs whose parents are not eligible"for ABC assistance. related programs in the state;states not use more than 8 •Priority. Requires that priority be given to providers who, in percent of their allotment for each fiscal year to administer the turn, give priority to eligible children of families with very low program;states make resource and referral services available to incomes,or to children with special needs;and who,to the families;eligible center-based providers give priority to children of maximum extent feasible, provide child care to a"reasonable families with very low income, taking into account family size, mix of children, including children from different socioeconomic or children with special needs; services are available to handi- backgrounds and children with a handicapping condition." capped children; states encourage the payment of adequate Priority would also be given to providers who provide opportuni- salaries and other compensation to child-care workers in programs ties for parent involvement and, to the maximum extent 1726 — ,JULY 8, 1999 CQ FOR THE RECORD feasible,offer family support services. give parents a choice between receiving a child-care certificate •Sliding-Fee'Scale.Requires the establishment of a sliding- and enrolling an eligible child with a provider receiving assistance fee scale requiring cost-sharing based on the services provided through grants or contracts. and the income of families(adjusted for size)of eligible children •Construction, Renovation. Prohibits the use of ABC funds receiving ABC funds. for the construction of new child-care facilities. Regulations Enforcement Permits the use of ABC funds for repair or renovation of existing facilities only if the provider agrees to repay the value of •Parental Involvement. Requires establishment of proce- the grant, or the principal and interest owed in the case of a dures for parental involvement in state and local planning, loan,should the provider cease to provide child-care services monitoring and evaluation of child-care programs and services. throughout the useful life of the repair or renovation. If the •Stipulates that nothing in Title I (ABC) "shall be construed or provider is a sectarian agency or organization, the renovation or applied in any manner to infringe upon or usurp the moral and repair must be necessary to bring the facility into compliance legal rights and res with applicable health and safety requirements. g g possibilities of parents or legal guardians." •Inspections. Requires that within three years of enactment, •Planning Grants. In the first year of a state's participation in personnel who perform inspections of child-care facilities have the program,authorizes the HHS secretary to make grants not knowledge concerning health and safety,child-abuse prevention exceeding 1 percent of the state's total allotment to assist it in and detection, program management, and relevant taw-enforce- satisfying the requirements of its state plan. ment practices and policies.To the maximum extent feasible, •Resource and Referral Programs. Authorizes grants to, or inspectors would have responsibility exclusively for children's contracts with, local governments or private non-profit orga- services. nizations to provide resource and referral services to families in •Requires periodic, unannounced inspections of all licensed or the state. Such programs would have to identify all types of regulated family child-care providers and group-home provid- available child care and provide information and referral services, ers. For center-based facilities,at least one unannounced inspec- including information regarding the availability of public fund- tion would be required annually. ing. •Requires all licensed or regulated child-care providers in the •Training and Technical Assistance. Within three years of state to have written program policies and to make a copy of enactment, requires states to require all providers of licensed or such policies available to parents. regulated child-care services,including registered child-care serv- e gu Requires all licensed or re ices, to complete a minimum number of hours of in-service q o child-care providers their children and to care pro- training each year.Such training could include training in health vide parents unlimited accesss tand safety, nutrition, first aid, recognition of communicable providers whenever children area in the providers' care. diseases,child-abuse detection and prevention,and the needs of •Complaint Procedure. Requires states to implement a pro- special populations of children. cedure to address complaints that provides a"reasonable •Authorizes states to make grants to,or contract with, state opportunity"for a parent or child-care provider adversely affected agencies, local governments, colleges or universities,and non- or aggrieved by a decision of the lead agency or any program profit organizations to develop and carry out child-care training receiving ABC funds to be heard by the state. and technical assistance programs for pre-service and in-service •Requires states to make information available to parents and training. the general public about licensing and regulatory requirements •Permits states to offer scholarship aid to individuals seeking a and complaint procedures,and to make readily available to nationally recognized child development associate credential parents the telephone number of the appropriate licensing or for center-based or family child care,as well as to care-givers with regulatory authority to which violations could be reported.States incomes below the federal poverty threshold who seek to obtain would be required to maintain a record of parental complaints training needed to meet the state's requirement. and to make information regarding substantiated parental com- plaints available to the public on request. •Requires states to establish a clearinghouse to collect and •Requires states to implement"whistleblower" protections to disseminate training materials to resource and referral agen- safeguard the jobs of child-care workers who report a facility's cies,and to child-care providers throughout the state. failure to comply with state requirements. Business, Federal Roles •Data Collection. Requires procedures for data collection to •Public-Private Partnership. Permits states to design activ- show how the child-care needs of families in the state are being ities to encourage businesses to support or provide child-care fulfilled, by race,sex, ethnic origin, handicapping condition and services to"a reasonable mix of children,including children from family income. Data would have to include the number of different socioeconomic backgrounds and children of employ- children receiving ABC funds and aid under other federal ees and non-employees.Such activities may include disseminating child-care and preschool programs;the type and number of child- information related to: flexible employee work schedules; care programs, providers,care-givers and support personnel in model child-care programs appropriate for adoption by such the state; and the average cost of child care in the state. businesses; competitive grants or loans to assist employers in •Severability. Declares provisions of ABC portion of the act _ establishing"innovative"child-care programs;and grants to non- severable and stipulates that should any provision or provisions profit business organizations to provide technical information be held unconstitutional,the validity of the remaining provisions and assistance to enable employers to develop.and operate child- would not be affected. care services. •President's Award. Establishes a"President's Award for Permitted Funding Uses Progressive Management Policy" to honor public and private- *Subsidies or Vouchers.Specifies that states may provide sector employers who have successfully implemented family- services by contracts with, or grants to,eligible providers who oriented personnel programs and policies responsive to the provide services directly to eligible children; by grants to local child-care needs of working parents,or who have made significant governments or non-profit organizations that agree to contract contributions to child-care projects in their communities.. with eligible providers; or by distributing to parents of eligible •Federal Administration. Establishes an administrator of children child-care certificates (vouchers) that will enable the child care,to be appointed by the HHS secretary.The adminis- parents to purchase services from eligible providers. trator would be responsible for coordinating child-care activities •Stipulates that states may provide certificates only if resource within HHS and between HHS and other federal agencies. The and referral programs are available to help parents locate administrator also would collect and publish annually state child- eligible providers. Apart from this exception., requires states to care standards, evaluate activities undertaken with ABC funds CQ JULY 8. 1989 — 1727 -FOR�T,HE RECORD and collect and disseminate materials relating to training and *National Study. Within four years of enactment, requires the technical assistapce,programs and salary studies. HHS secretary, in consultation with the Office of Technology *Federal Enforcement.Requires that if the HHS secretary, Assessment,to conduct a national study on childcare standards ; after reasonable notice and an opportunity for a hearing,finds based on data states would be required to collect.The report, that a state is failing to"comply substantially"with any provision which would be submitted to Congress,would include assessments or requirement of the program, he must suspend payments to of state compliance with the standards requirements,of the the state until he is satisfied that the failure has been corrected. propriety of the National Advisory Committee's recommended Authorizes the secretary to impose additional sanctions, includ- standards,and recommendations for further congressional ac- ing recovery of funds improperly used and disqualification from tion to improve the access of the public to affordable,high-quality further financial assistance under the program. child care. *Matching Requirement. Requires states to provide 20 cents Church-State Separation for each federal dollar. Prohibits states from requiring any •No Sectarian Support. Prohibits the use of ABC funds for eligible private provider of child-care services to contribute in cash "any sectarian purpose or activity, including sectarian worship or in kind to the state matching contribution. and instruction,"except for care purchased using child-care Recommended Standards certificates or provided by a relative of the eligible child. •National Advisory Committee. Requires the HHS secre- Stipulates that ABC funds"shall not be expended in a manner tary, within 60 days of enactment, to establish a 20-member inconsistent with the Constitution." National Advisory Committee on Recommended Child Care Stan- •No School Tuition Support. Prohibits use of ABC funds for dards. Four members each shall be appointed by the president services provided to students in grades 1-12 during the regular and the majority and minority leaders of the House and Senate_ school day,for services for which students receive academic credit These would have to include representatives of state and local toward graduation, or for instructional services"which supple- government, business, insurance regulators, religious insitutions, ment or duplicate the academic program of any public or private different types of child-care providers, resource and referral school." experts, parents who have been actively involved in community Non-discrimination. Prohibits discrimination on the basis of child-care programs, and organizations representing child-care religion in employment of child-care workers, except that employees. Individuals with expertise in early childhood develop- sectarian organizations may require that employees"adhere to the ment and education,as well as in pediatric health care, religious tenets and teachings of such organization and further, handicapping conditions and related fields,also would have to be such organization may require that employees adhere to rules represented. forbidding the use of drugs or alcohol." If two or more •Requires the committee, within 180 days of the date a majority applicants are qualified, permits the hiring of the individual of members have been appointed, to submit to the HHS who is already participating on a regular basis in other activities of secretary proposed recommended standards for child care,taking the church, synagogue or other organization that owns or into account the different needs of infants,toddlers,preschool operates the child-care program.Persons employed on the date of and school-age children. enactment are not affected by the above provisions. For center-based care,standards would cover staff-child ratios •Bars religious discrimination in admitting children to slots paid varying with the ages of children;total group size;qualifications for with ABC funds, but permits a provider to give preference, and background of personnel;and substantive and time re- for other slots,to children whose family members participate on a quirements for in-service training. Also required would be stan- regular basis in other activities of the organization that owns or dards for parental involvement and proposed health and safety operates the child-care program. requirements,covering disease and accident prevention; building •In programs more than 80 percent funded by federal or state and premises safety;general health and nutrition;children with funds, prohibits all discrimination in employment of child-care special needs; and child-abuse prevention. personnel or admission of children. For family child-care providers, recommended standards would •Provides that if any portion of the non-discrimination require- cover the maximum number of children, including infants,for ments is held invalid by the courts, other provisions of the act which care may be provided;the minimum age for care-givers; shall not be affected.Stipulates that none of the requirements is requirements for in-service training, and health and safety re- intended to modify or supersede any provision of a state quirements appropriate for the setting. constitution or state law prohibiting the use of public funds in or For group-home providers, recommended standards would set by sectarian institutions. maximum staff-child ratios and otherwise be the same as those for Title 11• Tax Credits, Revenue family child care,above. ro •Health Insurance Premium Credit. Creates a new tax •Provides that proposed standards may not be either more or credit, for families with children, to offset the cost of health- less rigorous than the most or least rigorous ones existing in any insurance premiums.The credit would be available only to state when the recommended standards are submitted. families with incomes of$18,000 or less. The credit would be •Abolishes the committee 90 days after the HHS secretary assessed against a maximum of$1,000 in premiums,and would be establishes recommended child-care standards through the set at 35 percent in 1991,40 percent in 1992,45 percent in 1993 federal rulemaking process. and 50 percent in 1994 and thereafter,for families with incomes at •Incentive Grant Program. Requires the HHS secretary, or below$12,000. For each $1,000 or fraction thereof over that within three years of enactment, to establish a program to income level and below$15,000,the credit would be reduced by make grants available to states to improve child-care standards. 16.67 percentage points. Initial grants would be competitive and based on the relative •Refundable Credits. Beginning in 1991, makes the health- quality of existing child-care standards in the state compared with insurance credit and the existing dependent-care tax credit other states; the level of standards a state wishes to adopt;and refundable and thus available to families who owe no income tax. the relative fiscal capacity of the state compared with other states. Only those with annual incomes under$28,000 (or$14,000 for a Subsequent grants would be based on compliance,or, if the married individual filing separately)would be eligible for refund- state has not complied, upon a determination by the HHS able credits. In 1990, only 90 percent of the dependent-care secretary that non-compliance is due to factors outside the credit would be refundable, rising to 100 percent in 1991. state's control. •Advance Payment of Refundable Credits. Beginning in States would have to put up 20 cents for each federal dollar, 1992, requires employers to make advance payments of the t? and the grant program would end the earlier of eight years after refundable credits in the paychecks of employees who present enactment or on the date funds are no longer appropriated. certificates of eligibility. 1728 — ,JULY 8, 1989 CQ FOR THE RECORD •Modificatign of Dependent-Care Credit.Beginning in discrimination test as an employer contribution.Other cash 1990, increases the percentage of expenses eligible for the credit credits generally would be treated as employee contributions. for families with adjusted gross incomes lower than$10,000. For •Provides that health plans that cover union employees be families with incomes below$8,000,the credit would be 34 meted separately with respect to the workers covered by a percent of expenses,and for families with incomes between$8,000 collective bargaining agreement. and $10,000, the credit would be 32 percent. Under current law, •Provides that benefits provided to former employees also be up to$2,400 of employment-related child-care expenses for one child,and up to$4,800 of expenses for two or more children are tested separately. eligible for the credit,which is 30 percent for those with adjusted •Exempts from Section 89 coverage any church,synagogue or gross incomes of$10,000 or less.(This provision was included in related entity. the bill as passed by mistake;authors of the measure intend to •Gives employers the option of alternative non-discrimination remove it at a later date.) test if the employer provides more than one health plan,and •Supplemental Earned-Income Tax Credit. Creates a sup- one or more of those plans is available to fewer than 90 percent of plement to the existing earned income tax credit (EITC) for employees or requires workers to pay more than 40 percent of low-income families with children under age 4.The supplement the premium.This test would permit employer-paid benefits up to would be the lesser of 7 percent of income up to the threshold 133 percent of the value of basic benefits offered to other for the regular EITC($6,500 in 1989)or$500 for families with one workers.Employer-paid benefits in excess of 133 percent would be young child; and the lesser of 10 percent of income up to the considered taxable income. base income for the EITC or$750 for families with two or more •Requires employer fringe-benefit plans to meet certain mini- young children. The credit would be phased out gradually for mum qualification standards, including requirements to put families with incomes between $10,000 and $15,000 per year. plans in writing and to notify employees of the provisions of such •Study of Advance Payments. Requires the Comptroller plans. Employers would have to pay a penalty of up to 34 General, in consultation with the secretary of the Treasury, to percent of benefits for plans that fail to meet qualification conduct a study of advance payments of the EITC and depen- requirements. Qualification rules would be delayed until three dent-care tax credit and the manner in which a system can be months after the Treasury Department's issuance of new Section implemented to alleviate administrative complexity for small 89 regulations, or until Jan. 1, 1991, whichever is earlier. businesses. The study would be due one year after enactment. Other Revenue Provisions •Public Awareness. Requires the secretary of the Treasury to •Permanent extension of the telephone excise tax. establish a program to inform the taxpaying public of the Makes permanent the 3 percent federal telephone excise tax. availability of the dependent-care and health-insurance credits. The tax was scheduled to expire after Dec. 31, 1990. •Demonstration Projects. Authorizes $25 million for each of •Requirement that S corporations pay estimated taxes. fiscal 1990-94 for the HHS secretary to conduct demonstration Requires that S corporations (similar to partnerships) make projects to evaluate and extend the provision of health insurance estimated tax payments if they are subject to income tax because to children under age 19 who lack insurance,and, at the option of built-in gains,excess passive income or for the recapture of of the sponsoring organization,their parents if they lack coverage investment tax credits. as well. Section 89 Title 111: Social Security Amendments •Earnings Test. In 1990, increases to$10,560 the amount a •Delays from Oct. 1, 1989, to Jan. 1, 1990, the effective date of person aged 65-69 may earn and still receive full Social Security rules forbidding discrimination in employee benefits that were retirement benefits. contained in a little-noticed provision of the 1986 tax overhaul law Beginning in 1990, for the next$5,000 in income from work (PL 99-514). exceeding the exempt amount,reduces retirement benefits by$1 •Exempts businesses with 20 or fewer employees from the new for every$4 earned, instead of$1 for every $3 earned. rules for one year, until Jan. 1, 1991. •Child-Care Earnings Exemption. Excludes from earned •Replaces the series of non-discrimination tests contemplated income counted towards the Social Security retirement test by Section 89 with one test intended to be simpler and easier to income earned from child care. meet. Under the old method, an employer had to test for non- •Lump-Sum Payments. Eliminates in most cases lump-sum discrimination under either a four-part or a two-part test, payments for retroactive or recomputed benefits,spreading out Under the new test,an employer-offered health plan would pass increases instead in each monthly check. muster as"non-discriminatory" if it was made available to at *Social Security Account Statement By Sept 30, 1994, a week, and if itt was deemed"affordable" —that is, didd not least 90 percent employees who normally work at least hours requires the HHS secretary to provide to every Social Security- require workers to pay more than 40 percent of the premiums.If a eligible individual aged 60 or over as of Oct.1,1993,who is not yet plan failed this test,then the premimums paid by the employer receiving retirement benefits a statement of the status of his or for so-called "highly compensated"employees would be consid- her Social Security account, including funds contributed and ered taxable income. benefits expected. By Oct. 1, 1999, biennial statements would be required to be sent to all persons who pay into Social Security. Defines a highly compensated employee as one who received By Oct. 1, 1990, the HHS secretary would be required to annual compensation in excess of$81,720;was an officer of the provide such statements upon request. employer and received annual compensation in excess of $50,000;or received compensation in excess of$54,480 and was in Title IV: General Provisions the top-paid 20 percent of employees.The dollar limits would •Sense of Congress, Higher Education Act. Expresses the be indexed to inflation increases.Owners of businesses would be sense of Congress that$10 million should be appropriated for a presumed to be highly compensated, except for those who program authorized under the 1986 Higher Education Act(PL 99- earned less than $30,000 a year. 498) to provide child-care services to disadvantaged students. •Permits employers attempting to meet non-discrimination tests •Flag Desecration. Provides for fines of up to$1,000 and to exclude,among others: workers who have not completed six penalties of up to one year in prison for anyone who"knowingly months of service; those who normally work not more than six and publicly mutilates, defaces, burns, displays on the floor or months during any year; students; and those under the age of ground, or tramples upon any flag of the United States."The 21. intent is to overturn a June 21 Supreme Court decision invalidat- e Specifies that cash credits paid by a firm to an employee who ing current federal and state flag-desecration laws. (Weekly has obtained health coverage elsewhere be treated in the non- Report pp. 1622, 1547) CQ JULY 8, 1989 — 1729 9 ::ZS SOCIAL-` SERVICE DEPT R _ 0 1 Post-[Vbrand fax transmittal memo 7671 sof pages► To From 1001AL' SERVICE DEPARTMENT` Co. Co. Dept. Phone# -Seo v Fax N Fax N y4, S3,1 TO: Supervisor Tom Powers DATE: November 1, 1989• Supervisor Sunne McPeak INTERNAL OPERATIONS COMMITTEE FROM: James A. Rydingsword CC: Yvonne Bullock Director, Social Service Dept. Linda Canan Carole Allen SUBJ: GAIN CHILD CARE CONTRACT This report is to update you on the progress our department has made in regard to the contracting out of GAIN Child Care. Your committee recommended that we develop a voucher system of GAIN Child Care payments and that we issue a Request for Proposal (RFP) for this service. The RFP has been drafted and is in the process of being finalized. We have had to analyze the voucher system in terms of fiscal accountability and process. The GAIN program is in the process of converting to a new computer/data collection/payment system. We are having to determine whether it is feasible for the contractor to have access to some of the computer screens and, if so, how much that access would cost. We should have those figures soon. The RFP can be issued as soon as we have this information. The contract with Community services is being extended until February 1, 1990 to cover the period of time it will take to get the voucher contract in place. • OFFICE OF THE COUNTY ADMINISTRATOR CONTRA COSTA COUNTY Administration Building 651 Pine Street, 11th Floor Martinez, California DATE: November 6, 1989 TO: Supervisor Tom Powers Supervisor Sunne W. McPeak INTERNAL OPERATIONS COMMITTEE 1 FROM: Claude L. Van Marter Assistant County Admrator SUBJECT: SUMMARY OF PAST BOARD OF SUPERVISOR ACTIONS ON CHILD CARE FINANCING As a result of your meeting November 2, 1989 with the Child Care Task Force, your Committee requested that staff research and summarize for your Committee the actions which the Board of Supervisors has taken in the past which bear on the extent to which the Board of Supervisors has made commitments relating to -the dedication of any specific sources of revenue to child care programs. The specific question arose in regard to whether the Board of Supervisors has agreed to dedicate Transient Occupancy Tax revenue from the Pleasant Hill/BART Station Redevelopment Area to the Child Care Affordability Fund. Other related issues were raised regarding funding for the Child Care Broker Program and the coordination and management of child care programs in the County generally. We have research the records in the County Administrator' s Office and the Office of the Clerk of the Board of Supervisors and have summarized below the dates on which the Board of Supervisors has taken action on items relating to Child Care. Where decisions by the Board of Supervisors related to the specific issues in question we have quoted verbatim the language from the Board order. September 24,1985: The Board of Supervisors adopted a policy statement on the subject of child care and directed the Community Development Director to incorporate it into the General Plan and/or appropriate elements of this plan. December 3, 1985: The Board of Supervisors held a hearing on, and received the report of the Child Care Task Force. The Report was referred to the County Administrator for review and report to appropriate Board Committees. No specific action was taken by thea Board of Supervisors to endorse any of the Task Force's recommendations. March 26, 1986: On the recommendation of Supervisor McPeak, the Board clarified that the Internal Operations Committee was to monitor the proposed child care ordinance and that staff were requested to provide any reports on this subject to the Internal Operations Committee. April 24, 1986: The County Administrator reported to the Internal Operations Committee. This report indicated general support for many of the Task Force' s recommendations, indicated that further information would be needed to address some of those recommendations and noted that the Community Development Department was already working with major developers to insure that child care needs were met in such developments as Bishop Ranch and the Pleasant Hill/BART Redevelopment Area. April 29 , 1986: The Board of Supervisors approved recommendations from the Internal Operations Committee requesting several additional reports from staff. None of these recommendations dealt with the issues in question here. June 24, 1986: The Board of Supervisors approved recommendations from the Internal Operations Committee dealing with a General Plan element on Child Care and requesting surveys of County employees and County facilities regarding child care needs. August 19, 1986: The Board of Supervisors approved a report from the Internal Operations Committee which incorporated in the General Plan amendment on child care the policy statements adopted by the Board of Supervisors in September, 1985. This report also dealt with a number of related child care issues, but not with ,any of the issues which are in question here. October 14, 1986: The Board of Supervisors approved recommendations from the Internal Operations Committee. None of these recommendations dealt with the issues in question here. December 2, 1986: The Board of Supervisors approved recommendations from the Internal Operations Committee dealing with surveying County employees' child care needs and related issues. December 9, 1986: The Board of Supervisors approved recommendations from the Internal Operations Committee relating to an audit of the Contra Costa Children' s Council and related issues. January 13, 1987 : The Board of Supervisors approved recommendations from the Internal Operations Committee, including -3- . creating a Special Committee on Child Care to follow the proposed Child Care Ordinance until it was ready for presentation to the Board of Supervisors. January 13, 1987: The Board of Supervisors approved recommendations from the Internal Operations Committee relating to child care information and referral services for County employees. February 10, 1987: The Special Board Committee on Child Care Issues forwarded the proposed Child Care Ordinance to the Board of Supervisors for information only. February 24, 1987: The Board of Supervisors approved recommendations from Supervisor McPeak that the Contra Costa Children' s Council be invited to submit a proposal to serve as the Child Care Coordinating Body. In addition, the Board of Supervisors approved the following recommendation from Supervisor McPeak: Request the County Administrator's Office and Community Development Department to develop a plan for establishing and funding a child care coordinating/brokerage function to assist in the efficient implementation of the new child care land use and developer ordinance. Such a plan should incorporate "start-up, seed" funding from foundations with on-going financing from a dedicated portion of the Transient Occupancy Tax from the approved hotels in the Contra Costa Centre (at the Pleasant Hill BART Station) when they are constructed. The function, when financed, could be contracted out to the Child Care Coordinating Body. March 17, 1987: The Board of Supervisors approved recommendations from the Special Committee on Child Care Issues directing the Community Development Director and County Counsel to incorporate as many of the comments received on the draft ordinance as are appropriate before taking the Ordinance to the Planning Commission. The Special Committee on Child Care Issues was abolished at this point. April 28, 1987: The Board of Supervisors approved recommendations from the Internal Operations Committee which awarded the child care resource and referral program to the Contra Costa Children' s Council and authorized the Director of Personnel to negotiate a contract with the Children' s Council and return it to the Board of Supervisor through the Finance Committee. The recommendations also included directions to the Director of Personnel to develop a dependent care assistance program. June 16, 1987 : The Board of Supervisors approved recommendations from the Internal Operations Committee requesting the Director of Personnel to prepare a detailed dependent care assistance program and endorsing in concept the need for a sick child care program and referred the program outline to the Budget Committee to consider in conjunction with the 1987-88 County Budget. ' -4- January. 26, 1988: The Board of Supervisors adopted Ordinance 88/1 on Child Care facilities in connection with residential and non-residential developments and referred to the Internal Operations Committee the responsibility to monitor the implementation of the Ordinance for one year. The Internal Operations Committee was also requested to review the issues of sick child care and provision of child care for GAIN participants. February 23 , 1988: The Board of Supervisors, on the recommendation of Supervisor McPeak referred to the Internal Operations Committee a number of child care affordability proposals, including the following: establishment of a "child are affordability fund" to assist parents of lower incomes with child care expenses by identifying a new revenue source to support the fund. New revenue sources to be explored may include: initiation of a recreational enterprise to employ local teenagers and generate a profit for child care; feasibility of such an enterprise (i.e. , a theme park, waterslide, dance arena, etc. ) on existing county property or donated land should be explored; - dedication of all or a portion of the revenue of a new commercial venture such as sales tax revenues from development at the Pleasant Hill BART Station, Buchanan Field Airport, or another project (such development projects would, of course, need to be ' done in cooperation with neighboring cities and consistent with growth management policies) ; dedication of a portion of transient occupancy tax (T.O.T. ) from hotels and motels throughout the county (the Board of Supervisors has already marked a portion of expected T.O.T. from the Pleasant Hill BART Station to support the coordination of the child care system in Contra Costa County) ; . . . March 29 , 1988: The Board of Supervisors approved, with amendments, recommendations from the Internal Operations. Committee on various child care issues. Among the actions approved by the Board of Supervisors were the following: . . . 6. Indicate the Board's intent to continue funding for the Child Care Council's coordinating role from the Transient Occupancy Tax from any hotel built within the Pleasant Hill-BART Station redevelopment project area. . . . 9. Agree in concept to the establishment of a child care affordability fund, referred the question of criteria for child care assistance back to the -5- Internal Operations Committee for a more detailed report, and referred the issue of the dedication of sales tax revenues from the Pleasant Hill BART Station area and Buchanan Field to the Finance Committee for further review. 10. Request the Director of Community Development to determine how much the Transient Occupancy Tax is expected to generate once the Embassy Suites Hotel in the Pleasant Hill-BART Station Redevelopment Project area is operational. 11. Request the Director of Community Development, Auditor-Controller and Public Works Director to determine how much additional sales tax revenue can reasonably be expected to be generated from planned development in the Pleasant Hill-BART Station Redevelopment Project area and at Buchanan Field Airport, and report their conclusions to our [the Internal Operations] Committee on June 20, 1988. A number of other recommendations were also approved at this time. June 28, 1988 : The Board of Supervisors approved recommendations from the Internal Operations Committee which, among other things, did the following: 10. Request the Public Works Director to report to our Committee September 26, 1988 on the amount of sales tax revenue which is expected to be generated from proposed development at Buchanan Field Airport. 11. Request the Director of Community Development to determine the amount of transient occupancy tax which would be generated countywide by an increase in the transient occupancy tax by each jurisdiction of 1% (for the County an increase from 8.5% to 9.5%) , and report the results to our Committee on September 26, 1988. August 2, 1988: The Board of Supervisor approved recommendations from the Internal Operations Committee which authorized the Community Development Director to negotiate a contract with the Child Care Council for the Child Care Broker function. The Board also approved an application to the San Francisco Foundation to help support the above contract. The Board approved the allocation of $10,000 from the County Housing Bond Trust Fund as a County match for the above foundation grant. The Board also directed the Community Development Department staff to continue their efforts to secure additional funding for implementation of the child care broker functions from the private development sector and private foundations. -6- October- 11, 1988: The Board of Supervisors approved recommendations from the Internal Operations Committee, with amendments, including the following: 1. Commend the concept of a Child Care Fund as outlined by the Contra Costa Child Care Council as a starting point for providing quality, affordable child care for all families not able to afford such care on their own. . . . 8. Endorse the application submitted to the San Francisco Foundation by the Community Development Department staff for funds to support the Child Care Broker function and request the Chairman to send a letter to the San Francisco Foundation indicating that the Board supports the application. . . . 12. Requested the Finance Committee and Internal Operations Committee to meet jointly to review the feasibility of use of new revenue streams to fund the Child Care Fund. This replaced the original Internal Operations Committee recommendation which read as follows: Identify the following new revenue streams as potential sources for the Child Care Fund: new sales tax from Buchanan Field, new transient occupancy tax from the Pleasant Hill-BART Station (Embassy Suites Hotel) , increased transient occupancy tax from an increase countywide and development of an entrepreneurial venture, such as a recreation program that generates revenue for child care. Request the Child Care Task Force and the Internal Operations Committee to review the feasibility of the new revenue streams for use to fund the Child Care Fund. November 1, 1988: The Board of Supervisors approved a variety of recommendations from the Internal Operations Committee on the subject of child care, none of which bear directly on the subject at hand. November 29, 1988: The Board of Supervisors approved recommendations from the Internal Operations Committee including continuing the operation of Ordinance 88/1 through December 31, 1989, and acknowledging receipt of the Committee report on the extent to which the recommendation of the Child Care Task Force had been implemented. Included in the background for this report, although not specifically noted in the recommendations, is the following statement: -7= The Board of Supervisors has approved in principle the concept of a child care affordability fund which would be used to subsidize the cost of child care for low-income families. The Child Care Council has developed a Concept Paper on this subject which defines the income levels of families that would be eligible for a subsidy from the child care affordability fund. It was suggested at our meeting that the criteria for eligibility might need to be refined somewhat to take into account unusual expenses a family may have for such items as housing or medical bills rather than simply looking at gross income. The Finance Committee and Internal operations Committee will be meeting jointly on December 12 to consider methods to finance the fund, including increases in the Transient Occupancy Tax rate for the County and cities and the dedication of specified new sources of Transient Occupancy Tax and sales tax by the County to the child care affordability fund. December 13 , 1988 : The Board of Supervisors approved recommendations from the Internal Operations Committee, none of which bear directly on the points at issue here. January 17, 1989: The Board of Supervisors approved recommendations from the joint meeting of the Finance and Internal Operations Committees. These recommendations included the following: 1. Reaffirm the Board of Supervisors' support for the formation of a Child Care Fund. 2. Direct staff to contact each of the cities with a proposal to increase the Transient Occupancy Tax to a uniform 9.5%, with the increased funding to be used to support the Child Care Fund. The background for this joint report included the following comments: on December 12, the Internal Operations Committee met with the Finance Committee to discuss recommendations related to the financing of affordable child care. During that meeting, various alternative funding sources were discussed, including dedicating existing or increased Transient Occupancy Tax to the fund, dedicating Pleasant Hill BART redevelopment revenues, both sales and Transient Occupancy Tax, and the dedication of new sales tax revenue from Buchanan Field. After discussing the matter thoroughly, the Committee's jointly approved the concept of using increased transient occupancy tax as the first and most likely choice. The Committees also recognized that whatever is done should be done on a countywide basis. This is in recognition of the increased revenue potential, as well as the knowledge -8- .that most of the benefit would accrue to citizens and children in the incorporated parts of the County. The staff was directed to follow up on this issue with the cities to determine the general countywide interested [sic] in dedicating increased Transient Occupancy Taxes to this worthy cause. The other alternative discussed did not appear to have the immediate potential of the increase in the Transient Occupancy Tax. However, the Committees wanted to reemphasize that it does not eliminate the other alternatives from consideration. It merely directs the immediate staff effort towards the Countywide increase in Transient Occupancy Tax. February 28, 1989: The Board of Supervisors approved recommendations from the Internal Operations Committee which dealt with the cost of implementing the child care tax credit. March 21, 1989: The Board of Supervisors approved recommendations from the Internal Operations Committee on various aspects of child care, including in particular the following: 4. Request the Director of Community Development to prepare a contract with the Contra Costa Child Care Council for the child care broker function, utilizing the $35,000 which has already been committed for this purpose and return the contract to the Board of Supervisors by April 4, 1989. 5. Request the Executive Director of the Contra Costa Child Care Council to convene a meeting of the city representatives on the Child Care Task Force, along with selected other city representatives, to meet with staff from the Child Care Council and Supervisor McPeak on April 6, 1989 at 7:30 A.M. to the Child Care Council's offices to discuss how the cities and County can jointly identify an adequate revenue stream to finance the Child Care Affordability Fund, either from an increase in the Transient Occupancy Tax or from other revenue sources which are available to the cities. Request the County Administrator's Office to staff this meeting and prepare a report back to our Committee for our meeting on April 10, 1989. March 21, 1989 : The Board of Supervisors adopted a Resolution (89/175) establishing a Special Child Care Trust Fund to be used in the funding and development of child care programs for County employees. April 18 , 1989: The Board of Supervisors approved recommendations from the Internal Operations Committee, none of which bear directly on the issue at hand. May 16,` 1989: The Board of Supervisor approved recommendations from the Internal Operations Committee on the subject of child care, none of which bear on the issue in question here. June 27, 1989: The Board of Supervisors approved recommendations from the Internal Operations Committee on the subject of child care, none of which bear on the issue in question here. Contra Personnel Department Costa Administration Bldg. 651 Pine Street County Martinez, California 94553-1292 DATE: October 30, 1989 TO: Internal Operations Committee FROM: Harry D. Cisterman, Director of Personnel SUBJECT: Report on Status of Child Care Issues Assigned to the Director of Personnel I. EMERGENCY CHILD CARE At the Internal Operations Committee of June 26, 1989, the Personnel Department presented a detailed pian for an In-Home Emergency Child Care Program for use by County employees. The concept of the program was approved and authorization was given to the Personnel Department to proceed with Phase III of the program subject to the Board providing financing in the 1989-90 County Budget. In Phase III, we were to further refine the elements and operation of the program with a view toward implementation in early 1990. The following is a status report of progress in these areas. v BACKGROUND After many months of research into the feasibility of the County providing sick child care to County employees, the Personnel Department found a high-quality and relatively inexpensive innovative In-Home Sick Child Care model . It was envisioned that with modifications and enhancements this model could be adopted by the County. The program included five basic elements which required the expertise of other County departments in order to develop and operate the program. Personnel staff established communication with these departments and began modifying the program elements and formulating the policy and procedures that would govern the program. From these activities, Personnel staff presented to the Internal Operations Committee a detailed outline of the program which displayed: all of the program elements and how they interacted; many of the governing policies and procedures; and a cost analysis that depicted budget requirements at various levels of operation. Personnel staff was prepared to proceed with Phase III in the event favorable consideration was received from the budgetary process. Since June 26, 1989, Personnel staff has been informed by the Office of the County Administrator funding of the In-Home Emergency Child Care Program was not. authorized in the budget process. CONCLUSION Without a source of funding, the further extension of staff time and effort to plan and lay ground work to operate a program is futile. For these reasons, Personnel staff has suspended activities aimed at implementing this program. It should be noted that based' on the generous extension of time and effort by many Internal Operations Committee Page 2 October 30, 1989 County departments in assisting with the design of this program, picking up and carrying forth with the program can perhaps be undertaken with much ease when the County budget outlook is more favorable. At present, Personnel staff awaits direction from the Internal Operations Committee before resuming activities in the establishment of a sick child care program. II. FAMILY SICK LEAVE At the present time, the following unions have agreed to language changes in their Memoranda of Understanding which will permit use of sick leave for family illness: Local 1 Local 535 Local 2700 The same language has been submitted to all remaining unions to effect the same change in their Memoranda of Understanding. 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M, CONTRA COSTA COUNTY REDEVELOPMENT AGENCY .r DATE: November 1, 1989 TO: Internal Ope io Committee/Child Care Task Force FROM: Jim Ke nedy, Ue t y Director-Redevelopment SUBJECT: Sales &—Tansient Occupancy Tax Estimates Pleasant Hill BART Station Area. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ This serves to update an estimate provided to the Internal Operations Committee in June, 1988. Attached is an estimate of sales and transient occupancy taxes that may be reasonably expected to be generated from development in the Pleasant Hill BART Station Area. A summary follows: Estimated Sales Tax and Transient Occupancy Tax (TOT) accruing to the County of Contra Costa from the Pleasant Hill BART Station Area. Year Revenue Source 1991 1992 1993 1994 1995 Sales Tax $67,055 $119,555 $148,055 $472,055 $495,660 Transient Occupancy $527,425 $553,796 $580,165 $638,184 $669,830 Tax TOTAL (Estimate) $594,480 $673,350 $891,275 $1,110,239 $1,165,490 These estimates are significantly lower than 1988 estimates for the following reasons: 1) Sales tax projections no longer include a major sub-regional retail center at Pleasant Hill BART (BART Development site) A neighborhood serving retail center has replaced the sub-regional center for purposes of these projections. 2) Only one hotel , the Embassy Suites (currently under construction) is assumed in the Transient Occupancy Tax (TOT) estimates. Because of the softness in the hotel market a second or third hotel may never be built. If the market were to improve a conservative estimate would include one additional hotel of approximately 250 rooms in 1995, which would generate approximately $690,000 in TOT in addition to that shown above. ATTACHMENT A Sales Tax Revenues by Year and Type Spec. Type Amount of Taxable Gross Plan of Retail Sales/ Taxable County Year Area Retaill (sq.ft. ) sq.ft./yr2 Sales/Yr Portion/yr 3 Generated 4 10B CS 440 $250 110,000 1,100 1991 10B R 5,250 300 1,575,000 15,750 1991 10B CS 1,582 250 395,500 3,955 1991 1 CS 18,500 250 4,625,00 46,250 1991 4 CS 15,000 250 3,750,000 37,500 1992 7 & 8 MS 10,000 150 1,500,000 15,000 1992 15 R 5,000 300 1,500,000 15,000 1993 7 & 8 R 4,000 300 1,200,000 12,000 1993 7 & 8 CS 600 250 150,000 1,500 1993 12 & 13 CR 75,000 400 30,000,000 300,000 1994 12 & 13 R 4,000 300 1,200,000 12,000 1994 10A R 4,000 300 1,200,000 12,000 1994 R = Restaurant = $300 taxable sales/square foot/year CR = Convenience Restaurant(s) = $400 taxable sales/square foot/year CS = Convenience Retail Shopping = $250 taxable sales/square foot/year MS = Mall-type Shopping = $150 taxable sales/square foot/year 2. Source: Richard Berksen, Economic and Planning Systems 3. County Sales Tax Revenue is calculated at 1% of Gross Taxable Sales 4. Represents first full year the project may produce Sales Tax Revenue SALES TAX REVENUE 1991 1992 1993 1994 $ 1,100 $1,100 $1,100 $1,100 15,750 15.750 15,750 15,750 3,955 3,955 3,955 3,955 46,250 46,250 46,250 46,250 37,500 37,500 37,500 $67,055 15,000 15,000 15,000 12,000 12,000 $119,555 1,500 1,500 15,000 15,000 ' 300,000 $148,055 12,000 12,000 $472,055 r ATTACHMENT B Transient Occupancy Tax (TOT) By Year Total First Specific Year # of Rooms Year Room 2 Tax 3 Plan Area Generated Taxed Receipts/Yr Generated 10B 1991 170 $6,205,000 $527,425 7/8 1995(?) 175 8,112,125 689,530 1. Based on 70% occupancy rate. 2. Room Rate based on $100-$110 range in 1989. 1988 is assumed to be:* 1990 100 1991 105 1992 110 1993 116 1994 121 3. TOT is calculated at 8.5%.* *Source: Richard Berkensen, Economic and Planning Systems. Transient Occupancy Tax Cumulative, by Year 1991 1992 1993 1994 1995 $527,425 $553,796 $580,167 $638,184 $669,830 689,530(?) $1,359,360 sral:A: iocte.mem • ATTACHMENT C Specific Plan Area Assumptions Specific Plan Area 1: 18,000 square feet of convenience retail . Specific Plan Area 2: None - Previously developed. Specific Plan Area 3: See Area 1. Specific Plan Area 4: 15,000 square feet of convenience retail Specific Plan Area 5: None - Previously developed. Specific Plan Area 6: None - Southern Pacific ROW. Specific Plan Area 7 & 8: Convenience retail and one floor level of retail within an office building is assumed. This appears to reflect the developers thinking. The restaurant is assumed to be 4,000 square feet; and the floor level retail within the office buildings is assumed to be 10,000 square feet. A 250 room luxury hotel with a restaurant is a possibility on this site. Construction is dependent on the strength of the hotel market. Specific Plan Area 9: None. Specific Plan Area 1OA: A 4,000 square foot restaurant is assumed within one of two office buildings. Specific Plan Area 1OB: A 5,250 square foot restaurant, and 440 square feet of convenience retail is located within the 242 room Embassy Suites Hotel . 1,582 square feet of retail has been approved adjacent to an office building. Specific Plan Area 11: None - BART parking structure. Specific Plan Area 12 & 13: A 4,000 square foot restaurant is assumed. 75,000 square feet of neighborhood retail are assumed. s ` Specific Plan Area 14: None. Specific Plan Area 15: A free-standing 5,000 square foot restaurant is assumed. Specific Plan Area. 16: None - Southern Pacific ROW. GR/jb GR14/salestax.rev