Child Care Scholarship Program - Freeze in Enrollment - Exceptions and Waitlist, the official text

WES MOORE, Governor                                Ch. 594

Chapter 594

                   (House Bill 849)

AN ACT concerning

Child Care Scholarship Program – Freeze in Enrollment – Exceptions and
                                                   Waitlist

FOR the purpose of prohibiting a freeze in enrollment in the Child Care Scholarship
         Program from including certain individuals enrolled in certain governmental
         support programs, children with siblings enrolled in the Program, individuals with
         certain employment issues, and individuals employed by a child care provider and
         children who are homeless; requiring the State Department of Education to establish
         a waitlist for the Program under certain conditions; requiring the Department to give
         priority for enrollment in the Program to certain individuals on the waitlist;
         requiring the Department to develop a new application for the Program that collects
         certain information; and generally relating to exceptions to a freeze in enrollment in
         and a waitlist for the Child Care Scholarship Program.

BY repealing and reenacting, with amendments,
         Article – Education
         Section 9.5–111
         Annotated Code of Maryland
         (2022 Replacement Volume and 2025 Supplement)

         SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:

                   Article – Education

9.5–111.

(a) (1) In this section the following words have the meanings indicated.

                  (2) “Analysis” means the market rate survey or an alternative method
allowable under federal law.

             (3) “Program” means the Child Care Scholarship Program.

         (b) (1) Beginning in 2017, and every 2 years thereafter, the Department shall
conduct an analysis in order to formulate appropriate reimbursement rates for the
Program.

             (2) The Department, before conducting the analysis, shall consult with:

             (i) The Office of Child Care Advisory Council;
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          (ii) Child care resource and referral agencies;

          (iii) Child care worker organizations; and

          (iv) Any other appropriate entities.

         (c) On or before September 1, 2017, and by September 1 every 2 years thereafter,
the Department shall report to the Joint Committee on Children, Youth, and Families, the
Senate Budget and Taxation Committee, and the House Appropriations Committee, in
accordance with § 2–1257 of the State Government Article, on:

          (1) The methodology of the analysis required under subsection (b) of this

section;

                  (2) Cost estimates for raising the Program’s reimbursement rates to the
45th, 55th, 65th, and 75th percentile of child care providers in each of the State’s market
regions;

                  (3) The minimum base payment rate that is required for child care
providers to meet health, safety, quality, and staffing requirements in accordance with
federal law and the factors used to determine that rate;

                  (4) The rate adjustment that the Department will implement based on the
analysis;

                  (5) Any adjustments to Program eligibility or family copay amount that
will be implemented; and

                  (6) Any potential impacts on families and providers due to any adjustments
made to the Program.

         (d) (1) The Governor shall include in the annual State budget an appropriation
from all fund sources for the Program that is not less than the total appropriation for the
Program in fiscal year 2018 or fiscal year 2019, whichever is greater.

                  (2) Except as provided in paragraph (3) of this subsection, the Department
may not make the following alterations to the Program in effect as of January 1, 2023:

          (i) Reduce the reimbursement rates;

          (ii) Reduce the income eligibility requirements; or

                         (iii) [Implement] SUBJECT TO SUBSECTION (E) OF THIS SECTION,
IMPLEMENT a freeze in Program enrollment.

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                  (3) (i) The Department may alter the Program in effect as of January
1, 2023, by reducing the reimbursement rates, reducing the income eligibility
requirements, or implementing a freeze in Program enrollment, if:

                                    1. The Department submits a notification to the Senate
Budget and Taxation Committee, the Senate Committee on Education, Energy, and the
Environment, the House Appropriations Committee, and the House Ways and Means
Committee, in accordance with § 2–1257 of the State Government Article, on the intended
Program alterations, including the reason for, and expected duration of, the proposed
actions; and

                                    2. The Program alterations identified in the notification are
not implemented until the completion of the regular legislative session immediately
following the submission of the notification.

                           (ii) If the Board of Public Works approves budget reductions for the
Program under § 7–213 of the State Finance and Procurement Article for a certain fiscal
year, the Department may reduce the reimbursement rates, reduce the income eligibility
requirements, or implement a freeze in Program enrollment at any time during the fiscal
year.

                (4) The EXCEPT AS PROVIDED IN § 9.5–113(D) OF THIS SUBTITLE, THE
Department may not increase the copayment levels of the Program in effect as of January
1, 2024.

(E) (1) (I) A FREEZE IN PROGRAM ENROLLMENT MAY NOT APPLY TO:

                         (I) 1. AN INDIVIDUAL OR A FAMILY WHO IS ENROLLED IN
THE TEMPORARY CASH ASSISTANCE PROGRAM UNDER § 5–312 OF THE HUMAN
SERVICES ARTICLE;

                         (II) 2. AN INDIVIDUAL OR A FAMILY WHO IS ENROLLED IN
THE FEDERAL TEMPORARY ASSISTANCE FOR NEEDY FAMILIES PROGRAM;

                         (III) 3. A CHILD, PARENT, OR CAREGIVER WHO IS ENROLLED
IN THE FEDERAL SOCIAL SUPPLEMENTAL SECURITY INCOME PROGRAM;

                         (IV) 4.  THE SIBLING OF A CHILD WHO IS ENROLLED IN THE
PROGRAM; AND

           (V) AN INDIVIDUAL WHO:

           1. HAS BECOME UNEMPLOYED WITHIN THE PAST 30

DAYS; AND

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                                 2. WOULD HAVE QUALIFIED FOR THE PROGRAM
BEFORE BECOMING UNEMPLOYED;

                         (VI) AN INDIVIDUAL WHO:

                                 1. IS EMPLOYED BY THE FEDERAL OR STATE
GOVERNMENT OR A LOCAL GOVERNMENT IN THE STATE;

                                 2. IS INVOLUNTARILY FURLOUGHED FROM WORK
WITHOUT PAY BECAUSE OF A GOVERNMENT SHUTDOWN, LASTING FOR A PERIOD
THAT EXCEEDS 7 CONSECUTIVE DAYS, THAT CAUSES FUNDING TO BE UNAVAILABLE

TO OPERATE GOVERNMENTAL ACTIVITIES DUE TO THE LACK OF A LEGISLATIVE

APPROPRIATION OR A CONTINUING RESOLUTION; AND

                                 3. WOULD HAVE QUALIFIED FOR THE PROGRAM
BEFORE BECOMING FURLOUGHED; AND

                         (VII) AN INDIVIDUAL WHO IS EMPLOYED BY A CHILD CARE
CENTER, A FAMILY CHILD CARE HOME, OR A LARGE FAMILY CHILD CARE HOME

                                 5. A CHILD WHO IS HOMELESS.

                (2) (II) AN INDIVIDUAL DESCRIBED UNDER PARAGRAPH (1) OF
THIS SUBSECTION SUBPARAGRAPH (I) OF THIS PARAGRAPH SHALL OTHERWISE
MEET THE CRITERIA FOR ENROLLMENT IN THE PROGRAM.

                (2) (I) IF THE DEPARTMENT ESTABLISHES A FREEZE IN PROGRAM
ENROLLMENT, THE DEPARTMENT SHALL ESTABLISH A WAITLIST FOR ELIGIBLE
INDIVIDUALS WHO APPLY TO THE PROGRAM AFTER THE FREEZE IS IN EFFECT.

                         (II) THE WAITLIST SHALL REMAIN IN EFFECT AS LONG AS
THERE ARE FEWER AVAILABLE AWARDS UNDER THE PROGRAM THAN ELIGIBLE
APPLICANTS FOR THE PROGRAM.

                         (III) THE WAITLIST SHALL PROVIDE AWARDS FOR ENROLLMENT
IN THE PROGRAM TO QUALIFIED APPLICANTS IN THE FOLLOWING ORDER OF
PRIORITY:

                                 1. APPLICANTS WITH THE GREATEST FINANCIAL NEED,
BASED ON ANNUAL HOUSEHOLD INCOME;

                                 2. APPLICANTS WHO WORK FOR AT LEAST 20 HOURS A
WEEK AS AN EMPLOYEE OR OPERATOR OF A CHILD CARE CENTER, A FAMILY CHILD

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              WES MOORE, Governor            Ch. 594

CARE HOME, A LARGE FAMILY CHILD CARE HOME, OR AN ELIGIBLE PUBLICLY
FUNDED PREKINDERGARTEN PROGRAM UNDER TITLE 7, SUBTITLE 1A OF THIS
ARTICLE THAT ACCEPTS CHILDREN ENROLLED IN THE PROGRAM;

              3. APPLICANTS ENROLLING A CHILD UNDER THE AGE OF

3 YEARS; AND

                                 4. APPLICANTS WHO HAVE BEEN ON THE WAITLIST FOR
THE LONGEST PERIOD OF TIME.

        [(e)] (F) The Governor shall, from all fund sources, appropriate funds in the
annual State budget in an amount sufficient to raise the Program’s reimbursement rates
for each region to:

                  (1) For fiscal year 2020, not less than the 30th percentile of the most recent
market rate survey or its equivalent if an alternative methodology defined by the
Department is used; and

                  (2) For fiscal year 2021 and each fiscal year thereafter, not less than the
60th percentile of the most recent market rate survey or its equivalent if an alternative
methodology defined by the Department is used.

SECTION 2. AND BE IT FURTHER ENACTED, That:

         (a) The State Department of Education shall develop a new application for the
Child Care Scholarship Program that collects information necessary to determine whether
an individual is employed for at least 20 hours a week by a child care center, a family child
care home, a large family child care home, or an eligible publicly funded prekindergarten
program that accepts Child Care Scholarship recipients.

         (b) In implementing a waitlist for applicants for the Child Care Scholarship
Program as required by § 9.5–111(e) of the Education Article, as enacted by Section 1 of
this Act, the Department shall focus on enrolling other eligible applicants prioritized on the
waitlist until the new application is developed in accordance with subsection (a) of this
section.

SECTION 3. AND BE IT FURTHER ENACTED, That:

         (a) (1) The State Department of Education shall review the methodology used
to determine whether a parent or guardian is attending a job training program for the
purposes of determining eligibility for a scholarship under the Child Care Scholarship
Program.

                  (2) In conducting its review, the Department shall consider alternative
methods of measuring job training that could result in qualifying additional applicants.

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         (b) On or before December 15, 2026, the Department shall report to the General
Assembly, in accordance with § 2–1257 of the State Government Article, on the results of
its review.

         SECTION 2. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect
July 1, 2026, contingent on the taking effect of Chapter 595 of the Acts of the General
Assembly of 2026, and if Chapter 595 does not take effect, this Act, with no further action
required by the General Assembly, shall be null and void.

Approved by the Governor, May 26, 2026.

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