GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	1 

SENATE BILL 1278

Short Title:  Child Care Subsidy Rates.	(Public)

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Sponsors: Senators Martin of Guilford, Phillips, Ballance, Dannelly, Forrester, Hartsell, Kinnaird, Lucas, Purcell, and Wellons.

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Referred to:  Appropriations/Base Budget.

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June 5, 2000

A BILL TO BE ENTITLED
AN ACT TO REQUIRE THE DIVISION OF CHILD DEVELOPMENT TO CONDUCT A MARKET RATE STUDY FOR CHILD CARE SUBSIDIES EVERY TWO YEARS; TO REQUIRE THAT THE RESULTS OF THE STUDY BE PUBLISHED AND NEW MARKET RATES IMPLEMENTED WITHIN SIX MONTHS AFTER THE STUDY IS COMPLETED; TO REQUIRE THAT CHILD CARE SUBSIDIES BE SET AT THE SEVENTY-FIFTH PERCENTILE OF THE COUNTY MARKET RATE; AND TO CHANGE THE WAY CHILD CARE SUBSIDIES ARE SET FOR THE 2000-2001 FISCAL YEAR.
The General Assembly of North Carolina enacts:
Section 1.(a)	Chapter 110 of the General Statutes is amended by adding a new section to read:
"§ 110-109.  Child care subsidy rates.
(a)	The Department shall conduct a statewide market rate study of child care facilities at least once every two years.  The study shall include a survey of all licensed facilities.  Based on the results of this study, the Department shall establish a market rate for child care centers and homes at each rated quality level for each county and for each age group.  The Department shall also calculate a statewide market rate at each rated quality level for each age group.  The market rate shall be set at the seventy-fifth percentile of fees charged to unsubsidized, privately-paying parents at each rated quality level for each age group.
(b)	Within six months of completing a statewide market rate study, the Department shall publish the results of that study and implement market rates based on the results of that study.
(c)	When a county has at least 75 children in an age group at a particular rated quality level, the subsidy rate is the county market rate for that age group at that rated quality level.  When a county has less than 75 children in an age group at a particular rated quality level, the subsidy rate is the statewide market rate for that age group at that rated quality level.
(d)	Notwithstanding the provisions of subsection (c) of this section, when it can be demonstrated that the statewide market rate is lower than the county market rate and that setting the subsidy rate at the statewide market rate would inhibit a county to purchase child care for low-income children, the subsidy rate shall be the county market rate."
Section 1.(b)	The first market rate study required by G.S. 110-109 as enacted by subsection (a) of this section shall be completed no later than April 1, 2001.
Section 2.(a)	Subsection (c) of Section 11.47 of S.L. 1999-237 reads as rewritten:
"Section 11.47.(c)	Payments for the purchase of child care services for low-income children shall be in accordance with the following requirements:
(1)	Effective October 1, 1999, religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the subsidy rate or the rate they charge privately paying parents, whichever is lower.
(2)	Effective October 1, 1999, religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that are receiving a higher rate than the subsidy rates that will be implemented with this provision shall continue to receive that higher rate for a period of three years from the effective date of this section.
(3)	Effective October 1, 1999, licensed child care centers with two or more stars may receive a higher payment rate per child per month as follows:  two stars - $14.00, three stars - $17.00, four stars - $20.00, and five stars - $23.00.  Effective January 1, 2000, licensed child care homes with two or more stars may receive a higher payment rate per child per month as follows:  two stars - $14.00, three stars - $17.00, four stars - $20.00, and five stars - $23.00.  This subdivision expires September 1, 2000.
(3a)	Effective September 1, 2000, licensed child care centers and homes with two or more stars shall receive the subsidy rate for that rated quality level for that age group or the rate they charge privately paying parents, whichever is lower.
(4)	Nonlicensed homes shall receive fifty percent (50%) of the subsidy rate or the rate they charge privately paying parents, whichever is lower.
(5)	Maximum payment rates shall also be calculated periodically by the Division of Child Development for transportation to and from child care provided by the child care provider, individual transporter, or transportation agency, and for fees charged by providers to parents.  These payment rates shall be based upon information collected by market rate surveys."
Section 2.(b)	Subsection (d) of Section 11.47 of S.L. 1999-237 is repealed.
Section 2.(c)	Subsection (e) of Section 11.47 of S.L. 1999-237 reads as rewritten:
"Section 11.47.(e)	A market rate shall be calculated for child care centers and homes at each rated quality level for each county and for each age group or age category of enrollees and shall be representative of fees charged to unsubsidized privately paying parents for each age group of enrollees within the county.  The Division of Child Development shall also calculate a statewide market rate at each rated quality level for each age category.  The Division of Child Development may also calculate regional market rates at each rated quality level for each age group and age category."
Section 3.  G.S. 143-168.15(g) reads as rewritten:
"(g)	Not less than thirty percent (30%) of each local partnership's direct services allocation shall be used to expand child care subsidies. To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child care services as described in this section. "
Section 4.  Section 3 becomes effective September 1, 2000.  The remainder of this act becomes effective July 1, 2000.