House File 707 - Introduced HOUSE FILE 707 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO HSB 233) A BILL FOR An Act relating to state child care assistance eligibility 1 requirements and child care provider reimbursement rates. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2533HV (3) 90 dg/rh

H.F. 707 Section 1. Section 237A.1, Code 2023, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 7A. “Children needing special needs care” 3 or “special needs child” means a child or children with one or 4 more of the following conditions: 5 a. The child has been diagnosed by a physician or by a 6 person endorsed for service as a school psychologist by the 7 department of education to have a developmental disability 8 which substantially limits one or more major life activities, 9 and the child requires professional treatment, assistance in 10 self-care, or the purchase of special adaptive equipment. 11 b. The child has been determined by a qualified intellectual 12 disability professional to have a condition which impairs the 13 child’s intellectual and social functioning. 14 c. The child has been diagnosed by a mental health 15 professional to have a behavioral or emotional disorder 16 characterized by situationally inappropriate behavior which 17 deviates substantially from behavior appropriate to the 18 child’s age, or which significantly interferes with the child’s 19 intellectual, social, or personal development. 20 Sec. 2. Section 237A.13, subsection 1, paragraph c, Code 21 2023, is amended to read as follows: 22 c. The child’s parent, guardian, or custodian is employed 23 and the family income meets income requirements a minimum of 24 thirty-two hours per week or an average of thirty-two hours 25 per week during the month if the child requires basic care, 26 or twenty-eight hours per week or an average of twenty-eight 27 hours per week during the month if the child is a special needs 28 child . 29 Sec. 3. Section 237A.13, Code 2023, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 1A. A family shall only be initially 32 eligible for state child care assistance if the family’s gross 33 monthly income does not exceed the lesser of: 34 a. (1) One hundred fifty-five percent of the federal 35 -1- LSB 2533HV (3) 90 dg/rh 1/ 5

H.F. 707 poverty level applicable to the family size for children 1 needing basic care. 2 (2) Two hundred percent of the federal poverty level 3 applicable to the family size for children needing special 4 needs care. 5 b. Eighty-five percent of the state median gross monthly 6 income. 7 Sec. 4. Section 237A.13, subsection 3, Code 2023, is amended 8 to read as follows: 9 3. a. The department shall set reimbursement rates as 10 authorized by appropriations enacted for payment of the 11 reimbursements. The department shall conduct a statewide 12 reimbursement rate survey to compile information on each county 13 and the survey shall be conducted at least every two years. 14 The department shall set rates in a manner so as to provide 15 incentives for an unregistered provider to become registered. 16 b. The department shall not modify reimbursement rates 17 to the state child care assistance program or financial 18 eligibility requirements for a family participating in the 19 state child care assistance program without prior enabling 20 legislation in this state passed on or after January 1, 2023. 21 Sec. 5. Section 237A.13, subsection 8, paragraphs a and c, 22 Code 2023, are amended to read as follows: 23 a. Families with an income at or below one hundred percent 24 of the federal poverty level whose members, for at least 25 twenty-eight thirty-two hours per week in the aggregate, are 26 employed or are participating at a satisfactory level in an 27 approved training program or educational program, and parents 28 with a family income at or below one hundred percent of the 29 federal poverty level who are under the age of twenty-one years 30 and are participating in an educational program leading to a 31 high school diploma or the equivalent. 32 c. Families with an income of more than one hundred percent 33 but not more than one hundred forty-five fifty-five percent 34 of the federal poverty level whose members, for at least 35 -2- LSB 2533HV (3) 90 dg/rh 2/ 5

H.F. 707 twenty-eight thirty-two hours per week in the aggregate, are 1 employed or are participating at a satisfactory level in an 2 approved training program or educational program. 3 Sec. 6. DEPARTMENT OF HEALTH AND HUMAN SERVICES —— 4 INCREASED STATE CHILD CARE ASSISTANCE REIMBURSEMENT RATES. The 5 department of health and human services shall amend its 6 administrative rules pursuant to chapter 17A to increase the 7 half-day reimbursement rates paid to child care providers 8 reimbursed under the state child care assistance program to at 9 least the sixty-fifth percentile but no more than the eightieth 10 percentile of the 2020 market rate survey. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to state child care assistance (CCA) 15 eligibility requirements and child care provider reimbursement 16 rates. 17 The bill defines “child needing special needs care” or 18 “special needs child” as a child that has been diagnosed 19 by a physician or by a person endorsed for service as a 20 school psychologist by the department of education to have a 21 developmental disability which substantially limits one or more 22 major life activities, and requires professional treatment, 23 assistance in self-care, or the purchase of special adaptive 24 equipment; a child determined by a qualified intellectual 25 disability professional to have a condition which impairs the 26 child’s intellectual and social functioning; a child diagnosed 27 by a mental health professional to have a behavioral or 28 emotional disorder characterized by situationally inappropriate 29 behavior which deviates substantially from behavior appropriate 30 to the child’s age, or which significantly interferes with the 31 child’s intellectual, social, or personal development; or a 32 child with a combination of any of the foregoing conditions. 33 The bill requires, for the purposes of CCA eligibility, that 34 a child’s parent, guardian, or custodian who is employed must 35 -3- LSB 2533HV (3) 90 dg/rh 3/ 5

H.F. 707 work a minimum of 32 hours per week or an average of 32 hours 1 per week during the month if the child requires basic care, or 2 28 hours per week or an average of 32 hours per week during the 3 month if the child is a special needs child. 4 The bill provides that a family shall only be initially 5 eligible for CCA if the family’s gross monthly income does not 6 exceed the lesser of: (1) 155 percent of the federal poverty 7 level (FPL) applicable to the family size for children needing 8 basic care, (2) 200 percent of the FPL applicable to the family 9 size for children needing special needs care, or (3) 85 percent 10 of the state median gross monthly income. 11 The bill prohibits the department of health and human 12 services (HHS) and the director of HHS from modifying 13 reimbursement rates for child care providers reimbursed under 14 the CCA program or eligibility requirements for a family 15 participating in the CCA program without prior enabling 16 legislation in this state passed on or after January 1, 2023. 17 Based upon funding availability, HHS has established 18 waiting list categories for CCA based on a priority order 19 set out in Code section 237A.13(8). The most prioritized 20 and third most prioritized categories are: (1) families 21 with income at or below 100 percent of the FPL whose members 22 work at least 28 hours in the aggregate, are employed or are 23 participating at a satisfactory level in an approved training 24 program or educational program, and parents with income at 25 or below 100 percent of the FPL who are under 21 years of 26 age and are participating in an educational program leading 27 to a high school diploma or the equivalent; and (3) families 28 with an income of more than 100 percent but not more than 145 29 percent of the FPL whose members work for at least 28 hours 30 in the aggregate, and are employed or are participating at 31 a satisfactory level in an approved training program. The 32 bill changes the work requirements for the first and third 33 categories of prioritization from 28 hours to 32 hours, and 34 raises the income limit to qualify for the third category from 35 -4- LSB 2533HV (3) 90 dg/rh 4/ 5

H.F. 707 145 percent of the FPL to 155 percent of the FPL. 1 The bill directs HHS to set half-day reimbursement rates for 2 child care providers participating in the CCA program to at 3 least the 65th percentile but not more than the 80th percentile 4 of the 2020 market rate survey conducted by HHS to analyze and 5 evaluate the market rate of child care services throughout the 6 state. 7 -5- LSB 2533HV (3) 90 dg/rh 5/ 5