HOUSE OF REPRESENTATIVES	H.B. NO.	2355
TWENTY-FIFTH LEGISLATURE, 2010		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO CHILD CARE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the department of human services' child care subsidy program budget is expected to be depleted by the end of February 2010 unless emergency measures are taken to restructure the budget.  If the budget is depleted, no money will be available for child care subsidy payments from March through June of 2010.  The department increased the budget for this program by $8,500,000 over last year, bringing the total to nearly $66,000,000.  However, many more families are applying for assistance this year than expected, child care providers are raising rates, and the $66,000,000 that was budgeted for child care subsidies is being depleted much faster than anticipated.

     The legislature finds that the department of human services is actively working to avert a child care subsidy crisis and is trying to preserve this important program.  To meet this challenge, the department reported plans to implement on January 1, 2010, a new and more incremental sliding scale for paying child care subsidy benefits.  Under the new system, there would be ten gradual income steps, up from the existing three.  The neediest families will continue to receive one hundred per cent subsidies, while other families will receive subsidies ranging from ninety per cent to ten per cent, based upon their incomes.

     The transition to the new sliding scale is not expected to be overly burdensome for most families.  Under the new proposal, two-thirds of families will have at least half of their child care costs paid by the State, and nearly forty per cent of families will receive a child care subsidy of eighty per cent or higher.  Although some parents will receive smaller subsidies under the new system, other assistance programs from federal sources may help offset this loss.

     In addition, the legislature finds that the department currently pays child care subsidies as high as $1,395 per child per month for licensed center-based infant and toddler care.  The majority of children (fifty-six per cent), however, are cared for by relatives, which is the least expensive form of child care.

     As part of the proposed restructuring of the child care subsidy program, the department included a modest but noteworthy reduction in rates for unlicensed child care.  This recognizes the additional requirements that licensed providers must meet.  It also provides a financial incentive for unlicensed providers to meet quality-driven licensing requirements so that they may receive higher reimbursement rates.

     The legislature finds that the department of human services' new approach to child care subsidy eligibility and reimbursements will avoid far greater hardships by ensuring that no one completely loses their benefits.

     The purpose of this Act is to support the implementation of the department's new child care subsidy system by creating a maximum monthly amount for child care subsidies per child.  The Act also encourages the provision of licensed child care by preserving existing eligibility guidelines for child care provided in preschool care.

     SECTION 2.  Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§346-  Child care programs; maximum subsidy. No child care subsidy or child care reimbursement provided by the department shall exceed $    per month per child.  The department may amend child care subsidy income eligibility criteria; provided that income eligibility for subsidized preschool care programs shall be subject to the eligibility criteria in effect on December 31, 2009."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $     or so much thereof as may be necessary for fiscal year 2010-2011 for the provision of cash support for child care (HMS305).

     The sum appropriated shall be expended by the department of human services for the purposes of this Act.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on January 1, 2050.

Report Title:

Child Care; Subsidy; Appropriation

Description:

Imposes a maximum child care subsidy of $    per month per child and authorizes the department of human services to amend its criteria for determining eligibility for child care subsidies, with certain exceptions.  Appropriates funds for HMS305.  Effective January 1, 2050.  (HB2355 HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.