SB 34-FN – AS AMENDED BY THE SENATE
SENATE BILL 34-FN
This bill requires state public assistance programs to include reimbursement for child care based on the current market rate for such services.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [
in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT relative to reimbursement rates for child care.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose. The general court hereby finds that an essential component of Temporary Assistance to Needy Families (TANF) is ensuring that parents of young children have access to safe, affordable child care. To enable low and moderate income parents who need child care to work, attend school and job training programs, and otherwise meet public assistance eligibility requirements, the department of health and human services shall establish reimbursement rates for child care services that better reflect the current market rate for licensed child care.
2 New Section; Public Assistance; Reimbursement Rates for Child Care. Amend RSA 167 by inserting after section 3-e the following new section:
167:3-f Reimbursement Rates for Child Care.
I. The commissioner of health and human services shall establish by rule under RSA 541-A reimbursement rates for child care under the state public assistance program. To the extent that federal funds are available through the Temporary Assistance for Needy Families (TANF) or the Child Care and Development Block Grant (CCDBG) programs or from other federal sources, the rates shall reflect the current market rate for such services, based on the following criteria:
(a) Effective July 1, 2005, rates for child care reimbursement shall equal the 50th percentile of the market rate as measured by the survey of weekly costs of licensed child care centers conducted on behalf of the department in 2004. Rates for license-exempt providers may be established separately from this provision.
(b) Effective July 1, 2006, rates for child care reimbursement shall equal the 75th percentile of the market rate as measured by the survey of weekly costs of licensed child care centers conducted on behalf of the department in 2004. Rates for license-exempt providers may be established separately from this provision.
(c) To determine the current market rate in subsequent years, on or before October 1, 2005 and every 2 years thereafter, the department of health and human services shall conduct a survey of the weekly cost of licensed child care centers and licensed child care homes. The survey may be based upon a valid statistical sample of all licensed child care providers in the state.
(d) Effective July 1, 2007, the base reimbursement rate for child care shall equal the 75th percentile of the market rate for licensed child care, as measured by the survey conducted under subparagraph (c). The department shall develop a sliding scale to adjust the base reimbursement rate based on the type of child care provider, family size, income, and such additional eligibility criteria as the department may establish.
II. No more than 20 percent of the total federal TANF funds received annually by the state may be used for the child care reimbursement rate increases required by this section.
III. In order to expand the accessibility and availability of quality child care, the department also may establish, by rule under RSA 541-A, alternative or incentive reimbursement rates for quality enhancements to traditional child care services, innovative or specialized child care, and alternative child care delivery systems. The department shall maintain and expand a system of agreements with child care centers participating in the child care public assistance program. Rates for such agreements shall reflect the additional administrative costs assumed by such providers.
3 Effective Date. This act shall take effect 60 days after its passage.
SB 34-FN - FISCAL NOTE
AN ACT relative to reimbursement rates for child care.
The Department of Health and Human Services states this bill will increase state expenditures by $6,399,000 in FY 2006 and in each year thereafter. There will be no fiscal impact on state, county and local revenue or county and local expenditures.
The Department assumed an effective date of July 1, 2005, and that the administrative rules could be amended using existing resources. The Department indicated a biennial survey of rates is already being performed pursuant to federal regulation. The Department assumed market rates will remain level for the next two biennia. The Department stated that the federal government contributes 50% toward the current reimbursement rate and since the existing rate reflects the maximum federal contribution, any increase in the rate would be from the general fund.
The Department estimated the impact of this bill using the New Hampshire Early Care and Education Market Rate Survey for 2003. The difference between the survey’s 75th percentile of 2003 rates and the Department’s current rates was computed, and then converted to a percentage increase. The percentage was then applied to New Hampshire’s 2003 expenditures for employment related child care scholarships as follows:
Average difference between the Market Rate Survey 75th
percentile and the existing rates paid $33.50
Divided by the average weekly rate $124.00
Percentage increase needed for rates to be 75% of the market rate 27%
Expenditures for child care scholarships in FY 2003 $23,700,000
Percentage increase 27%
Increase in Expenditures $6,399,000