A buried provision in California's education omnibus bill now allows contractors in certain child care settings to charge families fees—reversing a blanket prohibition.
Most child care business owners in California don't realize that prior law flatly prohibited them from charging any fees to families—even when operating under a school district contract. That blanket ban just got narrower, thanks to a provision in AB2467 that went largely unnoticed outside the education policy world.
AB2467, the Elementary and Secondary Education omnibus bill, amends Section 51827, subdivision (a)(13) of the California Education Code. The change is specific: it carves out six named program categories from the contractor fee-charging prohibition. Those categories are preschool, after-school programs, expanded learning opportunities, and child care.
In plain terms: contractors operating in those spaces under a Local Education Agency (LEA) contract may now lawfully charge fees to families, rather than being categorically barred from doing so. This applies whether the contractor is a sole proprietor, small business, or larger operator.
If you run a child care program and hold a contract with a school district, county office of education, or other LEA, this change is relevant to you. The same applies if you operate an after-school or expanded learning program under such a contract. The carve-out does not affect programs operating independently of LEA contracts—those were never subject to the fee ban.
Contractors in other program types (such as certain specialized or therapeutic services) remain subject to the original prohibition and cannot charge families fees under LEA contracts.
The policy must be adopted by July 1, 2027. However, existing contracts are grandfathered in: they remain valid under their current terms until they expire or are renegotiated. This means you won't face immediate pressure to rewrite agreements, but you should plan ahead if your contract approaches renewal before that deadline.
AB2467 carried an urgency statute, meaning it took effect immediately upon the Governor's signature, though the fee-charging permission itself doesn't become mandatory policy until 2027.
This change gives you legal cover to negotiate fee structures with families when you renew or enter into LEA contracts. It doesn't require you to charge fees—it simply removes the legal barrier that previously made it impossible. Whether and how much to charge remains a business decision based on your costs, market conditions, and program model.
If you're currently operating under an LEA contract and absorbing costs that families might otherwise pay, you now have a pathway to adjust that arrangement at contract renewal. Conversely, if you've been operating independently to avoid the fee ban, you may want to revisit whether an LEA contract now makes sense for your business model.
The carve-out is narrow and specific to those six program types. Review your own program classification and contract language carefully, or consult with someone familiar with your LEA's policies.
Source: AB2467, SEC. 9 (amending Education Code Section 51827, subdivision (a)(13)); effective July 1, 2027, with grandfathering for existing contracts.