(a) The department shall adopt rules and regulations pursuant to this chapter. The rules and regulations shall include, but not be limited to, provisions that do all of the following:

1. (1) Provide clear guidelines for the selection of agencies when child development contracts are let, including, but not limited to, specification that any agency headquartered in the proposed service area on January 1, 1985, will be given priority for a new contract in that area, unless the department makes a written determination that (A) the agency is not able to deliver the level of services specified in the request for proposal, or (B) the department has notified the agency that it is not in compliance with the terms of its contract.
2. (2) Provide for a contract monitoring system to ensure that agencies expend funds received pursuant to this chapter in accordance with the provisions of their contracts.
3. (3) Specify adequate standards of agency performance.
4. (4) Establish reporting requirements for service reports, including provisions for varying the frequency with which these reports are to be submitted on the basis of agency performance.
5. (5) Specify standards for withholding payments to agencies that fail to submit required fiscal reports.
6. (6) Set forth standards for department site visits to contracting agencies, including, but not limited to, specification as to the purpose of the visits, the personnel that will perform these visits, and the frequency of these visits which shall be as frequently as staff and budget resources permit.
7. (7) Authorize the department to develop a process that may require every contracting agency to recompete for continued funding no less frequently than every five years.

(b) For purposes of expediting the implementation of state or federal legislation to expand childcare services, the department may do any of the following:

1. (1) Utilize an alternative application process in which the department will evaluate the ability and standing of existing contractors in determining allocation methodology and eligibility for funding.
2. (2) Waive the regulations regarding the point qualifications for, and the process and scoring of, applications of contract applicants pursuant to Section 18002 of Title 5 of the California Code of Regulations.
3. (3) Waive the time limitations for scheduling and notification of appeal hearings and their results pursuant to Section 18003 of Title 5 of the California Code of Regulations. The department shall ensure that the appeal hearings provided for in Section 18003 of Title 5 of the California Code of Regulations are conducted in a timely manner.

(c)

1. (1) Childcare and development programs operated under contract from funds made available pursuant to the federal Child Care and Development Fund shall be administered according to Chapter 19 (commencing with Section 17906) of Division 1 of Title 5 of the California Code of Regulations, unless provisions of these regulations conflict with federal regulations. If state and federal regulations conflict, the federal regulations shall apply unless a waiver of federal regulations is authorized.
2. (2) For purposes of this section, “Child Care and Development Fund” has the same meaning as in Section 98.2 of Title 45 of the Code of Federal Regulations.