DAR File No. 43934

Workforce Services, Employment Development

Rule R986-700

Child Care Assistance

Notice of Proposed Rule

(Amendment)

DAR File No.: 43934
Filed: 07/30/2019 03:31:08 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Department of Workforce Services (DWS) administers the federal Child Care and Development Block Grant (CCDBG). The CCDBG provides funds for child care assistance, or subsidies, to assist low-income families in paying for child care. Federal law requires all states to consider the level of quality when establishing subsidy rates for child care providers. As a result, Utah must identify the quality of its child care programs and publish the results to the general public. Utah's Child Care Quality System will help parents make informed choices about the child care programs their child attends so that the program will better prepare their child for kindergarten and life. This system will also ensure government child care subsidies are supporting quality programs. Participation is voluntary for child care programs not covered by state child care subsidies, however all licensed programs will be eligible to receive a rating. All programs that care for children covered by child care subsidies will receive a rating. That rating will then be used to establish the subsidy rate for the child. These amendments also repeal Section R986-700-776, Intergenerational Poverty School Readiness Scholarship Program, as that program ended when the law authorizing the program was repealed by S.B. 166 in the 2019 General Session.

Summary of the rule or change:

These changes add new sections (R986-700-740, R986-700-741, R986-700-742, and R986-700-743) outlining procedures related to Utah's Child Care Quality System (CCQS), including: how a CCQS rating or status is assigned to licensed center programs, how programs can qualify to receive an Enhanced Subsidy Grant, and how a program may request that a CCQS rating be reviewed if the program disagrees with the rating. These amendments also repeal Section R986-700-776 as that program has ended.

Statutory or constitutional authorization for this rule:

• Section 35A-3-310
• Subsection 35A-3-203(12)

Anticipated cost or savings to:

the state budget:

These proposed rule changes are not expected to have any fiscal impact on state government revenues or expenditures because any costs, including grant costs, will be paid with funds granted to the state through the federal Child Care and Development Fund (CCDF). Congress approved and allocated additional CCDF funds to states to be able to fully implement changes in CCDF regulations. There are no additional state employees or resources needed to oversee these proposed rule changes. These changes will not increase workload and can be carried out with existing budget.

local governments:

These proposed rule changes are not expected to have any fiscal impact on local governments' revenues or expenditures because the program is federally-funded and does not rely on local governments for funding, administration, or enforcement.

small businesses:

There are potentially 1,120 small businesses providing child care services (NAICS 624410) that could accept subsidy payments in Utah. In its first year of implementation, 30 percent of the eligible licensed child care center providers are estimated to be eligible for an additional $1,500,000 annually through the new Enhanced Subsidy Grants. The percentage of eligible providers is expected to increase each year with a full implementation benefit of $5,000,000. Grants will be paid directly to high quality providers for the cost of high quality child care. Providers include both small businesses and non-small businesses. These businesses will receive a portion of the additional annual subsidy payments, which will result in increased revenues each year. In the chart below, it is presumed that small businesses will receive approximately two times more in grants than non-small businesses. However, there are too many variables to precisely separate the benefits between small and non-small businesses.

persons other than small businesses, businesses, or local governmental entities:

Upon full implementation, an annual average of 6,500 families who receive child care subsidies will benefit from these changes. Indirect benefits to families include helping low-income parents to choose the highest quality care available for their children and expanding access to high quality child care. There are also inestimable benefits for employers of child care recipients. Employers will benefit from their employees having stable, high quality child care arrangements.

Compliance costs for affected persons:

These proposed rule changes are not expected to cause any compliance costs for affected persons because participation is voluntary and programs that receive child care subsidies may choose to receive a default rating.

Comments by the department head on the fiscal impact the rule may have on businesses:

After a thorough analysis, it was determined that these proposed rule changes will result in a positive fiscal impact to affected businesses.

Jon Pierpont, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Workforce Services
Employment Development
140 E 300 S
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Amanda McPeck at the above address, by phone at 801-517-4709, by FAX at , or by Internet E-mail at ampeck@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

09/16/2019

This rule may become effective on:

10/01/2019

Authorized by:

Jon Pierpont, Executive Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$1,000,000	$1,333,000	$1,666,000
Non-Small Businesses	$500,000	$667,000	$834,000
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$1,500,000	$2,000,000	$2,500,000
Net Fiscal Benefits:	$1,500,000	$2,000,000	$2,500,000

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non-Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

There are four non-small businesses providing child care services (NAICS 624410) that accept subsidy payments in Utah. In its first year of implementation, 30 percent of the eligible licensed child care center providers are estimated to be eligible for an additional $1,500,000 annually through the new Enhanced Subsidy Grants. The percentage of eligible providers is expected to increase each year with a full implementation benefit of $5,000,000. Grants will be paid directly to high quality providers for the cost of high quality child care. Providers include both small businesses and non-small businesses. These businesses will receive a portion of the additional annual subsidy payments, which will result in increased revenues each year. In the chart above, it is presumed that small businesses will receive approximately two times more in grants than non-small businesses. However, there are too many variables to precisely separate the benefits between small and large businesses.

 

The executive director of the Department of Workforce Services, Jon Pierpont, has reviewed and approved this fiscal analysis.

 

 

R986. Workforce Services, Employment Development.

R986-700. Child Care Assistance.

R986-700-740. Child Care Quality System (CCQS) Definitions and Acronyms.

In addition to the definitions of terms found in 35A Chapter 3 and R986-100-104, and the acronyms found in R986-100-103, the following definitions apply to CCQS:

(1) "CC subsidy" means a Child Care Assistance subsidy payment.

(2) "CCDF" means the Child Care and Development Fund.

(3) "CCL" means Utah Department of Health, Child Care Licensing Program.

(4) "Certified quality rating" means the CCQS rating determined by applying the CCQS framework and assigned by OCC.

(5) "Certified Quality Rating Review Committee" or "Review Committee" means a committee consisting of one representative from OCC, one representative from a licensed private child care program; and one expert in the field of early childhood education or school-age children, which reviews disputed quality ratings and makes recommendations to the Director of Adjudication concerning final certified quality rating decisions.

(6) "Child care program" or "program" refers to an individual location of a child care business.

(7) "Child Care Quality System" or "CCQS" refers to the comprehensive statewide system administered by OCC that provides quality ratings to eligible programs and supports programs in attaining higher levels of quality.

(8) "CCQS status" means the status assigned by OCC to a program without a default rating or certified quality rating.

(9) DWS-eligible child care program or "eligible provider" means a provider who:

(a) meets CCDF eligibility requirements;

(b) is compliant with CCL licensing requirements;

(c) has followed the CCL process to indicate the program will accept funding from OCC, including funding for children covered by CC subsidy; and

(d) can potentially receive CC subsidy and OCC grants, including ESG, if approved.

(10) "Enhanced Subsidy Grant" or "ESG" refers to monthly payments issued to an eligible program serving children covered by CC subsidies and achieving a rating of High Quality or High Quality Plus.

(11) "License in good standing" means a program is licensed by CCL, but not with a conditional license.

(12) "OCC" means the Department of Workforce Services, Office of Child Care.

(13) "Not participating" is a CCQS Status referring to a program that:

(a) has withdrawn from participation in the CCQS;

(b) does not hold a center license in good standing from CCL;

(c) is ineligible due to being disqualified by OCC; or

(d) has not applied for a certified quality rating and has not elected to become DWS-eligible.

 

R986-700-741. CCQS Rating and Status.

(1) Each licensed center program shall receive a CCQS rating or status, unless the program withdraws from participation following the process established by OCC policy.

(a) A licensed center program who chooses not to apply for a certified quality rating will receive a default rating.

(b) A DWS-Eligible child care program is required to participate in CCQS to remain an eligible provider. Participation means maintaining at least a default rating. An eligible provider is not required to submit an application for a certified quality rating.

(c) All CCQS ratings or statuses shall be made public on the Care About Childcare website.

(d) A DWS-eligible child care program which withdraws from participation in CCQS will become ineligible to receive CC subsidy and OCC grants or funding.

(2) A program may apply for a certified quality rating in accordance with OCC policy through the Care About Childcare website.

(a) A rating shall be awarded or a status shall be assigned no later than 180 days after the application was submitted.

(b) Certified quality ratings will be published publicly on the first day of the month of the certified rating period.

(3) A certified quality rating shall remain in place during the 12-month certified quality rating period unless a program:

(a) loses its license in good standing and goes on conditional license; or

(b) is disqualified from accepting funds from CCDF.

(4) The 12-month certified quality rating period may be modified when a program is receiving CCQS technical assistance and support from OCC, in accordance with OCC policy.

(5) Recertification. Upon expiration of the certified quality rating period, a program must recertify in order to maintain a certified quality rating.

(a) A program must follow the recertification procedures established by OCC policy.

(b) A program failing to recertify in a timely manner may receive one of the following ratings or statuses until a certified quality rating is awarded:

(i) a default Foundation of Quality rating for a program that is DWS-Eligible;

(ii) not participating status for a program that is not DWS-Eligible; or

(iii) denied participation status for a program operating on a conditional license at the time of recertification.

 

R986-700-742. Enhanced Subsidy Grant (ESG).

(1) To receive an Enhanced Subsidy Grant (ESG) a program must:

(a) receive a certified quality rating of:

(i) High Quality; or

(ii) High Quality Plus;

(b) serve children for whom child care was paid for with CC subsidy payments during the 12-month period used to calculate the ESG;

(c) maintain a license in good standing with CCL during the 12-month certification period;

(d) maintain status as a DWS-Eligible child care program during the 12-month certification period;

(e) agree to the comply with the requirements outlined in the certified quality rating award notice;

(f) agree to the amount of the ESG stated on the certified quality rating award notice;

(g) agree to receive the ESG through the process established by OCC policy; and

(h) not have a pending administrative review on the awarded certified quality rating.

(i) Upon final disposition of a pending administrative review, an ESG may be issued retroactively where all other ESG requirements are met.

(2) An ESG for a program that has an outstanding adjudicated overpayment or other debt owing to OCC shall be issued as follows:

(a) if the overpayment amount is less than the monthly ESG amount, the ESG shall be reduced by the amount of outstanding overpayment due; or

(b) if the overpayment amount is greater than the monthly ESG, a monthly ESG shall continue to be reduced until the overpayment is fully repaid.

(3) An overpayment for which there is pending administrative review or appeal shall not impact the ESG until final disposition of the action is issued.

(4) The monthly ESG will be calculated in accordance with OCC policy.

 

R986-700-743. CCQS Rating Administrative Review.

(1) A child care program may request a review of a certified quality rating following the process established by OCC policy.

(2) A review request shall be submitted within 30 calendar days of the date of the certified rating award notice except where there is good cause for failing to request a review within this timeframe.

(a) Good cause for failing to timely request review is limited to circumstances that are:

(i) beyond the party's control, or;

(ii) compelling and reasonable.

(b) Good cause excludes ordinary illness, lack of transportation and temporary absences.

(3) Quality Rating Pending Review. The certified quality rating issued in the quality rating award notice shall be published by OCC and remain published until the review is complete. Issuance of an ESG shall be temporarily suspended until the review is complete.

(4) OCC Review. All requests for review submitted to OCC shall be subject to an OCC review. Upon final determination of the OCC review, a notice of determination shall be sent to the program.

(5) If a program does not agree with the OCC review determination, the program may request a review by the Certified Quality Rating Review Committee.

(a) A review request shall be submitted within 30 calendar days of the date of the OCC review determination, except where there is good cause for failing to request a review within this timeframe pursuant to R994-700-742(2).

(b) A review by the Review Committee is an informal adjudicative proceeding under the Utah Administrative Procedures Act.

(c) A review may:

(i) include an OCC staff member to present the conclusions of the OCC review;

(ii) provide an opportunity for the program to present their reasons and evidence for the review request; and

(iii) include witnesses or legal representatives, as applicable; and

(iv) a request for any additional documentation relevant to the review, from either OCC or the program.

(d) Failure by the program to respond to any request by the Review Committee shall result in a dismissal of the review request.

(e) The Review Committee will issue a recommendation to the Department of Workforce Services Director of Adjudication once the review process is complete.

(6) The Director of Adjudication will make a final certified quality rating decision based upon the recommendation of the Review Committee. The Director of Adjudication decision is the final agency action pursuant to the Utah Administrative Procedures Act.

 

[R986-700-776. Intergenerational Poverty School Readiness Scholarship Program.

(1) Scholarships are available, as funding permits, for a child who

(a) will be four years of age on or before September 2 of the school year in which the individual intends to participate in a school readiness program;

(b) has not entered kindergarten; and

(c) is experiencing intergenerational poverty, as determined by the Department.

(2) The Department will mail scholarship applications to individuals who the Department has identified as potentially eligible and who live in an area where one or more high quality preschool programs is available. Individuals who do not receive an application from the Department may still apply by contacting the OCC and requesting an application. The Department will notify potential applicants of the due date for filing a completed application.

(3) An applicant may be required to show that transportation to a high quality preschool program is available if the child does not live within a reasonable commuting distance from the high quality preschool.

(4) An applicant may be required to provide verification and supporting documentation if necessary to determine eligibility.

(5) The value of the scholarship will be determined by which program the parent chooses.

(6) Scholarships are transferable however funds cannot be prorated during a given month. So if a child attends one day or more during a given month at one program, and wishes to transfer to a second program at any time during that month, the full scholarship payment will be made to the first program.

(7) Payment will be made directly to the high quality preschool provider. The provider must send the OCC an invoice at the end of the month, or as soon thereafter as feasible, when services were provided.]

 

KEY: child care, grant programs

Date of Enactment or Last Substantive Amendment: [ June 1, ]2019

Notice of Continuation: September 3, 2015

Authorizing, and Implemented or Interpreted Law: 35A-3-203(12); 35A-3-310; [ 53A-1b-110; ]53F-5-210