DHS News

BACKGROUND:  The State had not increased fees for many years.  Centers paid $150 fee for a 3 year license.  The Auditor General recommended a study of the impact of increasing fees with recommendations to the legislature.  The Governor proposed removing all General Fund from DHS licensure and in the third special session, HB 2013 gave the DHS the authority to raise fees.  In October, a proposed increase would have raised fees astronomically.  In response to public comments, DHS developed a program that tapped federal and other funds to reduce fees for participating facilities and offset their costs by up to 50% in total. 

DHS Fees as Originally Proposed, Revised, and with Empower Program

Licensed Capacity Group	# of  License(as of 9/8/2009)	October Proposed 3-year  Licensing Fees	Proposed Annual Fee	New3 year fees	New Annual fees	New 3 Year fees with Empower	New Annual with Empower Discount
5-10*	441	$581	$193.67	$1,000	$333	$500	$167
11-59	689	$2,218	$739.88	$4,000	$1,333	$2000	$667
60-99	535	$4,578	$1,526.00	$7,800	$2,600	$3,900	$1,300
100-149	488	$7,380	$2,460.00	$7,800	$2,600	$3,900	$1,300
150 +	581	$13,442	$4,480.67	$7,800	$2,600	$3,900	$1,300

*Primarily Group Homes.  There are 2,734 facilities 441 providers pay $1,000 or $500; 689 providers pay $4,000 or $2,000; and 1,604 pay $7,880 or $3,900.  Late filing fees are 10% of the license fee.

PURPOSE OF THE CHILD CARE FEE BILL

1.  Require a time and cost study consistent with the Auditor General recommendations.

2.  Require revision and implementation of the health and safety regulations.

3.  Revise fees based on study and regulations and adjust fees previously paid.

4.  Change how and when fees are paid to simplify future revisions and adjustments.

SB 1315 will be scheduled to be heard in the Senate Healthcare and Medical Liability Reform Committee on Wednesday February 24^th. at 9:00 AM

SUMMARY OF SB 1315

SB 1315 contains statutory changes and session law affecting both Child Care Centers (ARS 36-882) and Child Care Group Homes (ARS 36-897.01).  Provisions include:

Requires DHS to conduct a study of its costs to license child care and to identify specific costs for:  the licensing and certification process, inspections, complaints, enforcement, training, technical assistance, and consumer assistance.

The study shall analyze how the costs are related to the type and size of the facility and identify any other related costs that are included in the licensure fees.

DHS shall consult with representatives of licensed facilities in conducting its study.

The study shall assess the efficiency of the department’s regulation of facilities and develop recommendations to improve the efficiency and cost-effectiveness of its regulation without jeopardizing the health and safety of children.

DHS shall submit a written report of the study findings and recommendations to the Governor and legislature by October 1, 2010.

DHS shall adopt rules to streamline its health and safety regulations consistent with current law (36-883) by October, 2010.

The revised rules are exempt from the formal rule making process for one year.

DHS shall adjust fees based on the findings of its study and rules adopted.

Changes the payment of licensing fees from every three years to annual payments.

Instead of current 3 year license, licenses will be non-expiring but may still be revoked or suspended for cause or non-payment of fees. (12 other states do not require reapplication).

Allows facilities to make installment payments for licensing fees.

DHS shall review its actual costs to administer licensing at least every two years.

If costs are lower than the fees collected, DHS shall refund the overpayment

POLICY ISSUES NOT ADDRESSED BY SB 1315

Child care facilities should not be required to “fully fund” licensure. No other state requires centers to fully fund.  Licensed facilities protect children, allow parents to work, prepare children for success in school, provide constructive after school care, and are important to the State’s economy.  DHS taps uncapped federal matching funds that allow licensed health care facilities to pay a third of the cost of licensure.

The fees are still too high. Arizona’s new fees are the highest in the country, based on a capacity of 100.  For centers with space for 60 or more children, DHS charges $3,900 (discounted).  A study published in 2009, found that 18 states do not charge any licensing fees. Of the 31 other states that do charge fees, only five states charged more than $500.

The use of other funds to offset fess should be made permanent These or other funds should be available on a permanent basis to continue the fee reductions.  There should be a mechanism to ensure that DHS utilizes other funds to offset child care facility fees for licensure by no less than 66%.   Also, the statutory requirement that 10% of the child care licensing fees should be paid to the General Fund should be reviewed.