As Reported by the House Children and Human Services Committee

136th General Assembly

Regular Session Sub. H. B. No. 647

2025-2026

Representatives Plummer, Young

Cosponsors: Representatives White, A., Fowler Arthur

To amend sections 5104.01, 5104.30, 5104.32, 5104.34, 5104.38, and 5104.53 and to enact sections 5104.321 and 5104.45 of the Revised Code to revise the law governing the publicly funded child care program.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 5104.01, 5104.30, 5104.32, 5104.34, 5104.38, and 5104.53 be amended and sections 5104.321 and 5104.45 of the Revised Code be enacted to read as follows:

Sec. 5104.01. As used in this chapter:

(A) "Administrator" means the person responsible for the daily operation of a center, type A home, or approved child day camp. The administrator and the owner may be the same person.

(B) "Approved child day camp" means a child day camp approved pursuant to section 5104.22 of the Revised Code.

(C) "Authorized representative" means an individual employed by a center, type A home, or approved child day camp that is owned by a person other than an individual and who is authorized by the owner to do all of the following:

(1) Communicate on the owner's behalf;

(2) Submit on the owner's behalf applications for licensure or approval;

(3) Enter into on the owner's behalf provider agreements for publicly funded child care.

(D) "Border state child care provider" means a child care provider that is located in a state bordering Ohio and that is licensed, certified, or otherwise approved by that state to provide child care funded by the child care block grant act.

(E) "Career pathways model" means an alternative pathway to meeting the requirements to be a child care staff member or administrator that does both of the following:

(1) Uses a framework approved by the director of children and youth to document formal education, training, experience, and specialized credentials and certifications;

(2) Allows the child care staff member or administrator to achieve a designation as an early childhood professional level one, two, three, four, five, or six.

(F) "Caretaker parent" means the father or mother of a child whose presence in the home is needed as the caretaker of the child, a person who has legal custody of a child and whose presence in the home is needed as the caretaker of the child, a guardian of a child whose presence in the home is needed as the caretaker of the child, and any other person who stands in loco parentis with respect to the child and whose presence in the home is needed as the caretaker of the child.

(G) "Chartered nonpublic school" means a school that meets standards for nonpublic schools prescribed by the director of education and workforce for nonpublic schools pursuant to section 3301.07 of the Revised Code.

(H) "Child" includes an infant, toddler, preschool-age child, or school-age child.

(I) "Child care block grant act" means the "Child Care and Development Block Grant Act of 2014," 128 Stat. 1971 (2014), 42 U.S.C. 9858, as amended.

(J) "Child day camp" means a program in which only school-age children attend or participate, that operates for no more than twelve hours per day and no more than fifteen weeks during the summer. For purposes of this division, the maximum twelve hours of operation time does not include transportation time from a child's home to a child day camp and from a child day camp to a child's home.

(K) "Child care" means all of the following:

(1) Administering to the needs of infants, toddlers, preschool-age children, and school-age children outside of school hours;

(2) By persons other than their parents, guardians, or custodians;

(3) For part of the twenty-four-hour day;

(4) In a place other than a child's own home, except that an in-home aide provides child care in the child's own home;

(5) By a provider required by this chapter to be licensed or approved by the department of children and youth, certified by a county department of job and family services, or under contract with the department to provide publicly funded child care as described in section 5104.32 of the Revised Code.

(L) "Child care center" and "center" mean any place that is not the permanent residence of the licensee or administrator in which child care or publicly funded child care is provided for seven or more children at one time. "Child care center" and "center" do not include any of the following:

(1) A place located in and operated by a hospital, as defined in section 3727.01 of the Revised Code, in which the needs of children are administered to, if all the children whose needs are being administered to are monitored under the on-site supervision of a physician licensed under Chapter 4731. of the Revised Code or a registered nurse licensed under Chapter 4723. of the Revised Code, and the services are provided only for children who, in the opinion of the child's parent, guardian, or custodian, are exhibiting symptoms of a communicable disease or other illness or are injured;

(2) A child day camp;

(3) A place that provides care, if all of the following apply:

(a) An organized religious body provides the care;

(b) A parent, custodian, or guardian of at least one child receiving care is on the premises and readily accessible at all times;

(c) The care is not provided for more than thirty days a year;

(d) The care is provided only for preschool-age and school-age children.

(M) "Child care resource and referral service organization" means a community-based nonprofit organization that provides child care resource and referral services but not child care.

(N) "Child care resource and referral services" means all of the following services:

(1) Maintenance of a uniform data base of all child care providers in the community that are in compliance with this chapter, including current occupancy and vacancy data;

(2) Provision of individualized consumer education to families seeking child care;

(3) Provision of timely referrals of available child care providers to families seeking child care;

(4) Recruitment of child care providers;

(5) Assistance in developing, conducting, and disseminating training for child care professionals and provision of technical assistance to current and potential child care providers, employers, and the community;

(6) Collection and analysis of data on the supply of and demand for child care in the community;

(7) Technical assistance concerning locally, state, and federally funded child care and early childhood education programs;

(8) Stimulation of employer involvement in making child care more affordable, more available, safer, and of higher quality for their employees and for the community;

(9) Provision of written educational materials to caretaker parents and informational resources to child care providers;

(10) Coordination of services among child care resource and referral service organizations to assist in developing and maintaining a statewide system of child care resource and referral services if required by the department of children and youth;

(11) Cooperation with the county department of job and family services in encouraging the establishment of parent cooperative child care centers and parent cooperative type A family child care homes.

(O) "Child care staff member" means an employee of a child care center, type A family child care home, licensed type B family child care home, or approved child day camp who is primarily responsible for the care and supervision of children. The administrator, authorized representative, or owner may be a child care staff member when not involved in other duties.

(P) "Drop-in child care center," "drop-in center," "drop-in type A family child care home," and "drop-in type A home" mean a center or type A home that provides child care or publicly funded child care for children on a temporary, irregular basis.

(Q) "Early learning and development program" has the same meaning as "licensed child care program."

(R) "Employee" means a person who either:

(1) Receives compensation for duties performed in a child care center, type A family child care home, licensed type B family child care home, or approved child day camp;

(2) Is assigned specific working hours or duties in a child care center, type A family child care home, licensed type B family child care home, or approved child day camp.

(S) "Employer" means a person, firm, institution, organization, or agency that operates a child care center, type A family child care home, licensed type B family child care home, or approved child day camp subject to licensure or approval under this chapter.

(T) "Federal poverty line" means the official poverty guideline as revised annually in accordance with section 673(2) of the "Omnibus Budget Reconciliation Act of 1981," 95 Stat. 511, 42 U.S.C. 9902, as amended, for a family size equal to the size of the family of the person whose income is being determined.

(U) "Fraud against the publicly funded child care program" means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit under the publicly funded child care program to the person or some other person, including a child care provider. "Fraud against the publicly funded child care program" includes any act that constitutes fraud under federal law or the laws of this state.

(V) "Head start program" means a school-readiness program that satisfies all of the following:

(1) Is for children from birth to age five who are from low-income families;

(2) Receives funds distributed under the "Improving Head Start for School-Readiness Act of 2007," 42 U.S.C. 9831, as amended;

(3) Is licensed as a child care program.

(V)(W) "Home education" has the same meaning as in section 3321.042 of the Revised Code.

(W)(X) "Home education learning pod" means a voluntary association of parents who direct their children's education through home education and includes the following characteristics:

(1) The parents choose to group their children together in a home or other location at various times, which may include hours when home education is not provided.

(2) The pod includes only the parents' children who are receiving home education, except that it also may include siblings of those children, or other children who are under the care of the parents, regardless of age.

(3) At least one parent of any of the children participating in the pod must be on the premises while the pod is meeting.

(X)(Y) "Homeless child care" means child care provided to a child who satisfies any of the following:

(1) Is homeless as defined in 42 U.S.C. 11302;

(2) Is a homeless child or youth as defined in 42 U.S.C. 11434a;

(3) Resides temporarily with a caretaker in a facility providing emergency shelter for homeless families or is determined by a county department of job and family services to be homeless.

(Y)(Z) "Income" means gross income, as defined in section 5107.10 of the Revised Code, less any amounts required by federal statutes or regulations to be disregarded.

(Z)(AA) "Indicator checklist" means an inspection tool, used in conjunction with an instrument-based program monitoring information system, that contains selected licensing requirements that are statistically reliable indicators or predictors of a child care center's, type A family child care home's, or licensed type B family child care home's compliance with licensing requirements.

(AA)(BB) "Infant" means a child who is less than eighteen months of age.

(BB)(CC) "In-home aide" means a person who does not reside with the child but provides care in the child's home and is certified by a county director of job and family services pursuant to section 5104.12 of the Revised Code to provide publicly funded child care to a child in a child's own home pursuant to this chapter and any rules adopted under it.

(CC)(DD) "Instrument-based program monitoring information system" means a method to assess compliance with licensing requirements for child care centers, type A family child care homes, and licensed type B family child care homes in which each licensing requirement is assigned a weight indicative of the relative importance of the requirement to the health, growth, and safety of the children that is used to develop an indicator checklist.

(DD)(EE) "License capacity" means the maximum number in each age category of children who may be cared for in a child care center, type A family child care home, or licensed type B family child care home at one time as determined by the director of children and youth considering building occupancy limits established by the department of commerce, amount of available indoor floor space and outdoor play space, and amount of available play equipment, materials, and supplies.

(EE)(FF) "Licensed child care program" means any of the following:

(1) A child care center licensed by the department of children and youth pursuant to this chapter;

(2) A type A family child care home or type B family child care home licensed by the department of children and youth pursuant to this chapter;

(3) A licensed preschool program or licensed school child program.

(FF)(GG) "Licensed preschool program" or "licensed school child program" means a preschool program or school child program, as defined in section 3301.52 of the Revised Code, that is licensed by the department of children and youth pursuant to sections 3301.52 to 3301.59 of the Revised Code.

(GG)(HH) "Licensed type B family child care home" and "licensed type B home" mean a type B family child care home for which there is a valid license issued by the director of children and youth pursuant to section 5104.03 of the Revised Code.

(HH)(II) "Licensee" means the owner of a child care center, type A family child care home, or type B family child care home that is licensed pursuant to this chapter and who is responsible for ensuring compliance with this chapter and rules adopted pursuant to this chapter.

(II)(JJ) "Misuse of public funds" means intentional or repeated improper billing, expenditure, receipt, or retention of publicly funded child care payments in violation of this chapter or rules adopted under it.

(KK) "Operate a child day camp" means to operate, establish, manage, conduct, or maintain a child day camp.

(JJ)(LL) "Owner" includes a person, as defined in section 1.59 of the Revised Code, or government entity.

(KK)(MM) "Parent cooperative child care center," "parent cooperative center," "parent cooperative type A family child care home," and "parent cooperative type A home" mean a corporation or association organized for providing educational services to the children of members of the corporation or association, without gain to the corporation or association as an entity, in which the services of the corporation or association are provided only to children of the members of the corporation or association, ownership and control of the corporation or association rests solely with the members of the corporation or association, and at least one parent-member of the corporation or association is on the premises of the center or type A home during its hours of operation.

(LL)(NN) "Part-time child care center," "part-time center," "part-time type A family child care home," and "part-time type A home" mean a center or type A home that provides child care or publicly funded child care for not more than four hours a day for any child or not more than fifteen consecutive weeks per year, regardless of the number of hours per day.

(MM)(OO) "Place of worship" means a building where activities of an organized religious group are conducted and includes the grounds and any other buildings on the grounds used for such activities.

(NN)(PP) "Preschool-age child" means a child who is three years old or older but is not a school-age child.

(OO)(QQ) "Protective child care" means publicly funded child care for the direct care and protection of a child to whom all of the following apply:

(1) A case plan has been prepared and maintained for the child pursuant to section 2151.412 of the Revised Code.

(2) The case plan indicates a need for protective care.

(3) The child resides with a parent, stepparent, guardian, or another person who stands in loco parentis as defined in rules adopted under section 5104.38 of the Revised Code.

(PP)(RR) "Publicly funded child care" means administering to the needs of infants, toddlers, preschool-age children, and school-age children under age thirteen during any part of the twenty-four-hour day by persons other than their caretaker parents for remuneration wholly or in part with federal or state funds, including funds available under the child care block grant act, Title IV-A, and Title XX, distributed by the department of children and youth.

(QQ)(SS) "Religious activities" means any of the following: worship or other religious services; religious instruction; Sunday school classes or other religious classes conducted during or prior to worship or other religious services; youth or adult fellowship activities; choir or other musical group practices or programs; meals; festivals; or meetings conducted by an organized religious group.

(RR)(TT) "School-age child" means a child who is enrolled in or is eligible to be enrolled in a grade of kindergarten or above but is less than fifteen years old or, in the case of a child who is receiving special needs child care, is less than eighteen years old.

(SS)(UU) "Serious risk noncompliance" means a licensure or certification rule violation that leads to a great risk of harm to, or death of, a child, and is observable, not inferable.

(TT)(VV) "Special needs child care" means child care provided to a child who is less than eighteen years of age and either has one or more chronic health conditions or does not meet age appropriate expectations in one or more areas of development, including social, emotional, cognitive, communicative, perceptual, motor, physical, and behavioral development and that may include on a regular basis such services, adaptations, modifications, or adjustments needed to assist in the child's function or development.

(UU)(WW) "Title IV-A" means Title IV-A of the "Social Security Act," 110 Stat. 2113 (1996), 42 U.S.C. 601, as amended.

(VV)(XX) "Title XX" means Title XX of the "Social Security Act," 88 Stat. 2337 (1974), 42 U.S.C. 1397, as amended.

(WW)(YY) "Toddler" means a child who is at least eighteen months of age but less than three years of age.

(XX)(ZZ) "Type A family child care home" and "type A home" mean the permanent residence of the administrator in which child care or publicly funded child care is provided for eight to fourteen children at one time or a permanent residence of the administrator in which child care is provided for four to fourteen children at one time if four or more children at one time are under two years of age, provided that if the number of children under the age of two years at one time is greater than three or the total number of children at one time is greater than seven, an additional adult shall be present. In counting children for the purposes of this division, any children under six years of age who are related to a licensee, administrator, or employee and who are on the premises of the type A home shall be counted. "Type A family child care home" and "type A home" do not include any child day camp.

(YY)(AAA) "Type B family child care home" and "type B home" mean a permanent residence of the provider in which care is provided for one to seven children at one time and in which no more than three children are under two years of age at one time. In counting children for the purposes of this division, any children under six years of age who are related to the provider and who are on the premises of the type B home shall be counted. "Type B family child care home" and "type B home" do not include any child day camp.

Sec. 5104.30. (A) The department of children and youth is hereby designated as the state agency responsible for administration and coordination of federal and state funding for publicly funded child care in this state. Publicly funded child care shall be provided to the following:

(1) Recipients of transitional child care as provided under section 5104.34 of the Revised Code;

(2) Participants in the Ohio works first program established under Chapter 5107. of the Revised Code;

(3) Individuals who would be participating in the Ohio works first program if not for a sanction under section 5107.16 of the Revised Code and who continue to participate in a work activity, developmental activity, or alternative work activity pursuant to an assignment under section 5107.42 of the Revised Code;

(4) A family receiving publicly funded child care on October 1, 1997, until the family's income reaches one hundred fifty per cent of the federal poverty line;

(5) Subject to available funds, other individuals determined eligible in accordance with rules adopted under section 5104.38 of the Revised Code.

The department shall apply to the United States department of health and human services for authority to operate a coordinated program for publicly funded child care, if the director of children and youth determines that the application is necessary. For purposes of this section, the department of children and youth may enter into agreements with other state agencies that are involved in regulation or funding of child care. The department shall consider the special needs of migrant workers when it administers and coordinates publicly funded child care and shall develop appropriate procedures for accommodating the needs of migrant workers for publicly funded child care.

(B) The department of children and youth shall distribute state and federal funds for publicly funded child care, including appropriations of state funds for publicly funded child care and appropriations of federal funds available under the child care block grant act, Title IV-A, and Title XX. The department may use any state funds appropriated for publicly funded child care as the state share required to match any federal funds appropriated for publicly funded child care.

(C) In the use of federal funds available under the child care block grant act, all of the following apply:

(1) The department may use the federal funds to hire staff to prepare any rules required under this chapter and to administer and coordinate federal and state funding for publicly funded child care.

(2) Not more than five per cent of the aggregate amount of the federal funds received for a fiscal year may be expended for administrative costs.

(3) The department shall allocate and use at least four per cent of the federal funds for the following:

(a) Activities designed to provide comprehensive consumer education to parents and the public;

(b) Activities that increase parental choice;

(c) Activities, including child care resource and referral services, designed to improve the quality, and increase the supply, of child care;

(d) Establishing the step up to quality program pursuant to section 5104.29 of the Revised Code.

(4) The department shall ensure that the federal funds will be used only to supplement, and will not be used to supplant, federal, state, and local funds available on the effective date of the child care block grant act for publicly funded child care and related programs. If authorized by rules adopted by the department pursuant to section 5104.42 of the Revised Code, county departments of job and family services may purchase child care from funds obtained through any other means.

(D) The department shall encourage the development of suitable child care throughout the state, especially in areas with high concentrations of recipients of public assistance and families with low incomes. The department shall encourage the development of suitable child care designed to accommodate the special needs of migrant workers. On request, the department, through its employees or contracts with state or community child care resource and referral service organizations, shall provide consultation to groups and individuals interested in developing child care. The department of children and youth may enter into interagency agreements with the department of education and workforce, the chancellor of higher education, the department of development, and other state agencies and entities whenever the cooperative efforts of the other state agencies and entities are necessary for the department of children and youth to fulfill its duties and responsibilities under this chapter.

The department shall develop and maintain a registry of persons providing child care. The director shall adopt rules in accordance with Chapter 119. of the Revised Code establishing procedures and requirements for the registry's administration.

(E)(1) The director shall adopt rules in accordance with Chapter 119. of the Revised Code establishing both of the following:

(a) Payment rates for providers of publicly funded child care not later than the first day of July in each odd-numbered year;

(b) A procedure for paying providers of publicly funded child care.

(2) In establishing payment rates under division (E)(1)(a) of this section, the director shall do all of the following:

(a) Use the information obtained from the market rate survey developed and conducted in accordance with 45 C.F.R. 98.45;

(b) Establish an enhanced payment rate for providers who enroll children whose provide child care for caretaker parents who work nontraditional hours;

(c) With regard to the step up to quality program established pursuant to section 5104.29 of the Revised Code, establish enhanced payment rates for child care providers that participate in the program.

(3) In establishing payment rates under division (E)(1)(a) of this section, the director may establish different payment rates based on any of the following:

(a) Geographic location of the provider;

(b) Type of care provided;

(c) Age of the child served;

(d) Special needs of the child served;

(e) Whether the expanded hours of service are provided;

(f) Whether weekend service is provided;

(g) Whether the provider has exceeded the minimum requirements of state statutes and rules governing child care;

(h) Any other factors the director considers appropriate.

Sec. 5104.32. (A) All purchases of publicly funded child care shall be made under a contract entered into by a licensed child care center, licensed type A family child care home, licensed type B family child care home, certified in-home aide, approved child day camp, licensed preschool program, licensed school child program, or border state child care provider and the department of children and youth. All contracts for publicly funded child care shall be contingent upon the availability of state and federal funds. The department shall prescribe a standard form to be used for all contracts for the purchase of publicly funded child care, regardless of the source of public funds used to purchase the child care. To the extent permitted by federal law and notwithstanding any other provision of the Revised Code that regulates state contracts or contracts involving the expenditure of state or federal funds, all contracts for publicly funded child care shall be entered into in accordance with the provisions of this chapter and are exempt from any other provision of the Revised Code that regulates state contracts or contracts involving the expenditure of state or federal funds.

(B) Each contract for publicly funded child care shall specify at least the following:

(1) That the provider of publicly funded child care agrees to be paid at the rate established pursuant to section 5104.30 of the Revised Code;

(2) Whether the county department of job and family services, the provider, or a child care resource and referral service organization will make eligibility determinations, whether the provider or a child care resource and referral service organization will be required to collect information to be used by the county department to make eligibility determinations, and the time period within which the provider or child care resource and referral service organization is required to complete required eligibility determinations or to transmit to the county department any information collected for the purpose of making eligibility determinations;

(3) That the provider, other than a border state child care provider, shall continue to be licensed, approved, or certified pursuant to this chapter and shall comply with all standards and other requirements in this chapter and in rules adopted pursuant to this chapter for maintaining the provider's license, approval, or certification;

(4) That, in the case of a border state child care provider, the provider shall continue to be licensed, certified, or otherwise approved by the state in which the provider is located and shall comply with all standards and other requirements established by that state for maintaining the provider's license, certificate, or other approval;

(5) Whether the provider will be paid by the department of children and youth or in some other manner as prescribed by rules adopted under section 5104.42 of the Revised Code;

(6) That the contract is subject to the availability of state and federal funds.

(C)(1) The department shall establish an automated child care system to track child attendance and enrollment and calculate payments for publicly funded child care. Not later than July 9, 2028, and thereafter, the Subject to section 5104.321 of the Revised Code, the department shall calculate payments for publicly funded child care based on a child's enrollment, as described in 45 C.F.R. 98.45(m), rather than on a child's attendance.

(2) Each eligible provider that provides publicly funded child care shall participate in the automated child care system. A provider participating in the system shall not do any of the following:

(a) Use or have possession of a personal identification number or password issued to a caretaker parent under the automated child care system;

(b) Falsify child attendance or enrollment records;

(c) Knowingly seek or accept payment for publicly funded child care for a child not enrolled in attendance with the provider or for which the provider was not eligible;

(d) Knowingly seek or accept payment for child care for a child who resides in the provider's own home.

(3) Unless evidence demonstrates and the department has reason to suspect waste, fraud, or abuse on the part of a provider or caretaker parent, the department may do the following:

(a) Except as provided in division (C)(3)(b) of this section, allow each provider participating in the automated child care system and each caretaker parent to backdate a child's attendance record only within ten business days or fourteen calendar days of the date that publicly funded child care was provided. If the tenth business day and fourteenth calendar day do not fall on the same date, the later of the two dates shall be the date within which the department shall allow the child's attendance record to be backdated.

(b) Grant approval to the provider or caretaker parent to backdate a child's attendance record within thirty days of the date that publicly funded child care was provided or scheduled to be provided if the backdating relates to either of the following:

(i) A documented emergency or extenuating circumstance beyond the provider's or caretaker parent's control, such as a system outage, natural disaster, or other serious event as the department determines;

(ii) The thirty-day period described in division (L) of section 5104.38 of the Revised Code.

In the event backdating is allowed or approved under division (C)(3) of this section, the department shall pay the provider for the child's backdated attendance.

(D) The department may withhold any money due under this chapter and may , recover through any appropriate method any money erroneously paid under this chapter, or suspend or terminate a contract to provide publicly funded child care entered into under this section if evidence demonstrates that a provider of publicly funded child care failed to comply with either any of the following:

(1) The That a provider of publicly funded child care failed to comply with the terms of the contract entered into under this section;

(2) This That a provider of publicly funded child care failed to comply with this chapter or any rules adopted under it;

(3) That a provider of publicly funded child care engaged in the misuse of public funds or committed fraud against the publicly funded child care program.

(E) In addition to the authority granted in division (D) of this section, the department may withhold from a provider of publicly funded child care any money due for a child or children in the provider's care if evidence demonstrates that, in the case of the child or children, the provider engaged in the misuse of public funds or committed fraud against the publicly funded child care program.

(F) If the department has evidence that a provider has employed an individual who is ineligible for employment under section 5104.013 of the Revised Code and the provider has not released the individual from employment upon notice that the individual is ineligible, the department may terminate immediately the contract entered into under this section to provide publicly funded child care entered into under this section.

(F)(G) Any decision by the department concerning publicly funded child care, including the recovery of funds, overpayment determinations, and contract suspensions or terminations is final and is not subject to appeal, hearing, or further review under Chapter 119. of the Revised Code.

Sec. 5104.321. Beginning July 1, 2027, in calculating payments for publicly funded child care based on a child's attendance under division (C)(1) of section 5104.32 of the Revised Code, all of the following apply:

(A) Unless evidence demonstrates and the department of children and youth has reason to suspect waste, fraud, or abuse on the part of a provider of publicly funded child care or caretaker parent, the department may recognize the following as an absent day: any day that the child is authorized and scheduled to be in the care of a provider but does not receive the care as authorized. Any such recognition depends on the child's caretaker parent first having been notified of, and giving approval for, the provider's use of the absent day.

(B) The department shall not pay a provider for an absent day before the child's actual, initial attendance with the provider.

(C) The department shall not recognize a full-time plus authorization.

(D) Unless evidence demonstrates and the department has reason to suspect waste, fraud, or abuse on the part of a provider or caretaker parent, the department may allow a provider to use an eligible absent day when care cannot be provided due to an emergency or other circumstance beyond the provider's control, which prevented the provider from operating on a day that the child was authorized and scheduled to receive care.

Sec. 5104.34. (A)(1) Each county department of job and family services shall implement procedures for making determinations of eligibility for publicly funded child care. Under those procedures, the eligibility determination for each applicant shall be made no later than thirty calendar days from the date the county department receives a completed application for publicly funded child care. Each applicant shall be notified promptly of the results of the eligibility determination. An applicant aggrieved by a decision or delay in making an eligibility determination may appeal the decision or delay to the department of children and youth in accordance with section 5101.35 of the Revised Code. The due process rights of applicants shall be protected.

To the extent permitted by federal law, the county department may make all determinations of eligibility for publicly funded child care, may contract with child care providers or child care resource and referral service organizations for the providers or resource and referral service organizations to make all or any part of the determinations, and may contract with child care providers or child care resource and referral service organizations for the providers or resource and referral service organizations to collect specified information for use by the county department in making determinations. If a county department contracts with a child care provider or a child care resource and referral service organization for eligibility determinations or for the collection of information, the contract shall require the provider or resource and referral service organization to make each eligibility determination no later than thirty calendar days from the date the provider or resource and referral organization receives a completed application that is the basis of the determination and to collect and transmit all necessary information to the county department within a period of time that enables the county department to make each eligibility determination no later than thirty days after the filing of the application that is the basis of the determination.

The county department may station employees of the department in various locations throughout the county to collect information relevant to applications for publicly funded child care and to make eligibility determinations. The county department, child care provider, and child care resource and referral service organization shall make each determination of eligibility for publicly funded child care no later than thirty days after the filing of the application that is the basis of the determination, shall make each determination in accordance with any relevant rules adopted pursuant to section 5104.38 of the Revised Code, and shall notify promptly each applicant for publicly funded child care of the results of the determination of the applicant's eligibility.

The director of children and youth shall adopt rules in accordance with Chapter 119. of the Revised Code for monitoring the eligibility determination process. In accordance with those rules, the state department shall monitor eligibility determinations made by county departments of job and family services and shall direct any entity that is not in compliance with this division or any rule adopted under this division to implement corrective action specified by the department.

(2)(a) All eligibility determinations for publicly funded child care shall be made in accordance with rules adopted pursuant to division (A) of section 5104.38 of the Revised Code. Except as otherwise provided in this section, all of the following apply:

(i) Publicly funded child care may be provided only to eligible infants, toddlers, preschool-age children, school-age children under age thirteen, or children receiving special needs child care.

(ii) For an applicant to be eligible for publicly funded child care, the caretaker parent must be employed or participating in a program of education or training for an amount of time reasonably related to the time that the parent's children are receiving publicly funded child care. This restriction does not apply to families whose children are eligible for protective child care.

(iii) The eligibility period for publicly funded child care shall be at least twelve months.

(b) If a caretaker parent who has been determined eligible to receive publicly funded child care no longer meets the requirements of division (A)(2)(a)(ii) of this section, the caretaker parent may continue to receive publicly funded child care for a period of at least three but not more than four months not to extend beyond the caretaker parent's eligibility period.

(c) If a child turns thirteen, or if a child receiving special needs child care turns eighteen, during the eligibility period, the caretaker parent may continue to receive publicly funded child care until the end of that eligibility period.

Subject to available funds, the department of children and youth shall allow a family to receive publicly funded child care unless the family's income exceeds the maximum income eligibility limit. Initial and continued eligibility for publicly funded child care is subject to available funds unless the family is receiving child care pursuant to division (A)(1), (2), (3), or (4) of section 5104.30 of the Revised Code. If the department must limit eligibility due to lack of available funds, it shall give first priority for publicly funded child care to an assistance group whose income is not more than the maximum income eligibility limit that received transitional child care in the previous month but is no longer eligible because the eligibility period has expired. Such an assistance group shall continue to receive priority for publicly funded child care until its income exceeds the maximum income eligibility limit.

(3) An assistance group that ceases to participate in the Ohio works first program established under Chapter 5107. of the Revised Code is eligible for transitional child care at any time during the immediately following twelve-month period that both of the following apply:

(a) The assistance group requires child care due to employment;

(b) The assistance group's income is not more than one hundred fifty per cent of the federal poverty line.

An assistance group ineligible to participate in the Ohio works first program pursuant to section 5101.83 or section 5107.16 of the Revised Code is not eligible for transitional child care.

(B) To the extent permitted by federal law, the department of children and youth may require a caretaker parent determined to be eligible for publicly funded child care to pay a fee according to the schedule of fees established in rules adopted under section 5104.38 of the Revised Code. The department shall make protective child care services and homeless child care services available to children without regard to the income or assets of the caretaker parent of the child.

(C) A caretaker parent receiving publicly funded child care shall report to the entity that determined eligibility any changes in status with respect to employment or participation in a program of education or training not later than ten calendar days after the change occurs.

(D) If the department of children and youth determines that available resources are not sufficient to provide publicly funded child care to all eligible families who request it, the department may establish a waiting list. The department may establish separate waiting lists within the waiting list based on income.

(E) A caretaker parent shall not receive publicly funded child care only from more than one child care provider per child during a week, unless a county department grants the family is granted an exemption on a temporary basis for one of the following reasons:

(1) The child needs additional care during non-traditional hours;

(2) The child needs to change providers in the middle of the week, for a period not more than one week, and the hours of care provided by the providers do not overlap;

(3)(2) The child's provider is closed on scheduled school days off or on calamity days;

(3) The child's need cannot be met by one provider without impacting the family's education, employment, or training schedule.

The department is responsible for granting exemptions under this division, except that the department may authorize a county department of job and family services to do so in place of the department. The department shall not authorize a person or government entity other than a county department to grant exemptions in the department's place.

An exemption described in division (E)(3) of this section shall be valid for a period not to exceed thirty days, except that the department may, on the request of a child's caretaker parent, extend the thirty-day period to a period not to exceed six months.

Before such an extension expires, the caretaker parent may request an additional extension not to exceed a six-month period. If the department authorizes the additional extension, the caretaker parent may request one or more such extensions before each expires.

To be eligible for one or more such extensions from the thirty-day limit, the caretaker parent shall demonstrate to the department that the family's education, training, or employment schedule continues to be impacted, as described in division (E)(3) of this section.

(F) As used in this section, "maximum income eligibility limit" means the amount of income specified in rules adopted under division (A) of section 5104.38 of the Revised Code.

Sec. 5104.38. In addition to any other rules adopted under this chapter, the director of children and youth shall adopt rules in accordance with Chapter 119. of the Revised Code governing financial and administrative requirements for publicly funded child care and establishing all of the following:

(A) Procedures and criteria to be used in making determinations of eligibility for publicly funded child care that give priority to children of families with lower incomes and procedures and criteria for eligibility for publicly funded protective child care or homeless child care. The rules shall specify the maximum amount of income a family may have for initial and continued eligibility. The maximum amount shall not exceed three hundred per cent of the federal poverty line. The rules may specify exceptions to the eligibility requirements in the case of a family that previously received publicly funded child care and is seeking to have the child care reinstated after the family's eligibility was terminated.

(B) A schedule of fees requiring all eligible caretaker parents to pay a fee for publicly funded child care according to income and family size, which shall be uniform for all types of publicly funded child care, except as authorized by rule, and, to the extent permitted by federal law, shall permit the use of state and federal funds to pay the customary deposits and other advance payments that a provider charges all children who receive child care from that provider.

(C) A formula for determining the amount of state and federal funds appropriated for publicly funded child care that may be allocated to a county department to use for administrative purposes;

(D) Procedures to be followed by the department and county departments in recruiting individuals and groups to become providers of child care;

(E) Procedures to be followed in establishing state or local programs designed to assist individuals who are eligible for publicly funded child care in identifying the resources available to them and to refer the individuals to appropriate sources to obtain child care;

(F) Procedures to deal with fraud and abuse committed by either recipients or providers of publicly funded child care;

(G) Procedures for establishing a child care grant or loan program in accordance with the child care block grant act;

(H) Standards and procedures for applicants to apply for grants and loans, and for the department to make grants and loans;

(I) A definition of "person who stands in loco parentis" for the purposes of division (OO)(3) of section 5104.01 of the Revised Code;

(J) Procedures for a county department of job and family services to follow in making eligibility determinations and redeterminations for publicly funded child care available through telephone, computer, and other means at locations other than the county department;

(K) If the director establishes a different payment rate under division (E)(3)(d) of section 5104.30 of the Revised Code, standards and procedures for determining the amount of the higher payment that is to be issued to a child care provider based on the special needs of the child being served;

(L) To the extent permitted by federal law, procedures for enrolling and paying for up to thirty days of child care for a child whose caretaker parent is seeking employment, taking part in employment orientation activities, or taking part in activities in anticipation of enrolling in or attending an education or training program or activity, if the employment or the education or training program or activity is expected to begin within the thirty-day period;

(M) Any other rules necessary to carry out sections 5104.30 to 5104.43 of the Revised Code.

Sec. 5104.45. (A) Upon the written request of the director of children and youth or upon the attorney general's becoming aware of criminal or improper activity related to Chapter 5104. and the publicly funded child care program described in section 5104.30 of the Revised Code, the attorney general shall coordinate with the director to determine an appropriate course of action in the matter, which may include an investigation conducted by the attorney general. If it is determined that an investigation is appropriate, the attorney general shall investigate the matter, which investigation may be conducted with the assistance of the superintendent of the bureau of criminal identification and investigation.

(B) As soon as practicable after the attorney general completes an investigation into the matter as described in division (A) of this section and that investigation yields credible findings of criminal or improper activity, which may relate to waste, fraud, and abuse, the attorney general shall share the investigation's findings with the prosecuting attorney having jurisdiction of the matter.

(C) Not later than sixty days after the findings are shared, the prosecuting attorney shall indicate to the attorney general whether the prosecuting attorney intends to initiate and prosecute in any court or tribunal of competent jurisdiction in this state any necessary criminal or civil action relating to the matter. If the prosecuting attorney so indicates, the prosecuting attorney may initiate and prosecute any necessary criminal or civil action.

If the prosecuting attorney notifies the attorney general before the sixty days have elapsed that such a time period is not sufficient for determining whether to initiate and prosecute any necessary criminal or civil action, then not later than one hundred twenty days after the findings are shared, the prosecuting attorney shall indicate to the attorney general whether the prosecuting attorney intends to initiate and prosecute any necessary criminal or civil action. If the prosecuting attorney so indicates, the prosecuting attorney may initiate and prosecute any necessary criminal or civil action.

(D) If the prosecuting attorney indicates to the attorney general by either time period described in division (C) of this section that the prosecuting attorney will not initiate and prosecute any necessary criminal or civil action, then, as part of such indication, the prosecuting attorney shall share with the attorney general any information that the prosecuting attorney gathered when determining whether to initiate and prosecute an action.

(E) The attorney general may initiate and prosecute any necessary criminal or civil action after either of the following:

(1) The prosecuting attorney shares the findings and information as described in division (D) of this section;

(2) The prosecuting attorney never indicates to the attorney general by a time period described in division (C) of this section whether the prosecuting attorney intends to initiate and prosecute an action.

When proceeding under this division, the attorney general, and any assistant or special counsel designated by the attorney general for that purpose, has all rights, privileges, and powers of prosecuting attorneys. The attorney general has exclusive supervision and control of all investigations and prosecutions initiated by the attorney general under this section. The forfeiture provisions of Chapter 2981. of the Revised Code apply in relation to any such criminal action initiated and prosecuted by the attorney general.

Sec. 5104.53. (A) As used in this section:

(1) "Family services program" has the same meaning as in section 5101.35 of the Revised Code.

(2) "IEP" has the same meaning as in section 3323.01 of the Revised Code.

(3) "Resource caregiver" has the same meaning as in section 5103.02 of the Revised Code.

(B) The early childhood education grant program is created in the department of children and youth. Subject to available funds, the program shall support and invest in early learning and development programs operating in this state by awarding grants to programs that meet the conditions of this section in an amount that corresponds to the number of eligible children served by the programs.

(C) To be eligible for a grant under this section, an early learning and development program shall meet each of the following conditions:

(1) The program is rated through the step up to quality program established under section 5104.29 of the Revised Code at the tiered rating specified by the department in rules adopted under this section.

(2) The program provides early learning and development services to one or more preschool-age children described in division (D) of this section.

(3) The program meets any other eligibility condition specified by the department in rules adopted under this section.

(D) A preschool-age child who meets all of the following conditions, as determined by a county department of job and family services, is eligible to participate in the early childhood education grant program if a slot is available:

(1) Either the amount of the child's family income does not exceed two hundred per cent of the federal poverty line or the child meets one of the following conditions:

(a) An IEP has been developed for the child;

(b) The child is placed with a resource caregiver as described in Chapter 5103. of the Revised Code, with such placement documented by either a family case plan or kinship permanency incentive payments;

(c) The child is homeless as described in division (V) of section 5104.01 of the Revised Code.

(2) The child is a citizen of the United States or a qualified alien.

(3) The child meets any other eligibility condition specified by the department in rules adopted under this section.

(E) Any funds appropriated to the department for purposes of the early childhood education grant program shall be used as follows:

(1) In each fiscal year, not more than two per cent of appropriated funds shall be used for program support and technical assistance.

(2) Appropriated funds other than those described in division (E)(1) of this section shall be distributed to grant recipients.

(F) In accordance with Chapter 119. of the Revised Code, the director shall adopt rules to implement this section and administer the early childhood education grant program, including rules addressing all of the following topics:

(1) Eligibility conditions and other requirements for participation in the grant program by early learning and development programs, including the tiered rating at which a program becomes eligible to participate;

(2) Eligibility conditions for children participating in the early childhood education grant program if a slot is available;

(3) Standards, procedures, and requirements to apply for and distribute funds to participating early learning and development programs;

(4) In the event funds are distributed in error under the program, methods by which the department may recover those funds.

(G) The award of an early childhood education grant under this section shall not be considered publicly funded child care or a family services program.

Section 2. That existing sections 5104.01, 5104.30, 5104.32, 5104.34, 5104.38, and 5104.53 of the Revised Code are hereby repealed.