SENATE BILL REPORT
SHB 2689
As of March 5, 2026
Title: An act relating to the working connections child care program.
Brief Description: Concerning the working connections child care program.
Sponsors: House Committee on Appropriations (originally sponsored by Representatives Gregerson, Ormsby and Macri; by request of Office of Financial Management).
Brief History: Passed House: 3/4/26, 53-44.
Committee Activity: Ways & Means: 3/09/26.
Brief Summary of Bill
  • Authorizes provider reimbursement for the full authorization if a child is absent for ten or fewer days in a calendar month, beginning October 2026 for child care centers and July 2027 for family home providers. If a child attends yet is absent for greater than ten days, reimbursement for half of the full authorization is allowable.
  • Requires base subsidy rates to achieve the 75th percentile of market, beginning July 2027.
  • Invalidates market rate surveys, for purposes of rate increases, which do not achieve a provider response rate of 65 percent in each geographic region.
  • Prohibits providers from receiving a base subsidy rate that is different than the geographic region in which the provider is located, beginning July 2026.
  • Eliminates income eligibility expansions that are scheduled to occur in 2029 and 2031.
SENATE COMMITTEE ON WAYS & MEANS
Staff: Josh Hinman (786-7281)
Background:

Working Connections Child Care.  The Working Connections Child Care (WCCC) Program is a federally and state-funded program that provides child care subsidies to families, and is administered by the Department of Children, Youth, and Families (DCYF).  WCCC eligibility requirements for parents or consumers and requirements for children receiving the child care can be found in statute and DCYF rules. Eligible families are authorized for a period of 12 months.

 

Income Eligibility.  Families are eligible for WCCC if their household income is below 60 percent of the State Median Income (SMI) or if they qualify under certain categorical eligibility. At annual reapplication, families are eligible up to 65 percent of the SMI. Beginning July 1, 2029, income eligibility increases to 75 percent of the SMI.  Beginning July 1, 2031, income eligibility increases to 85 percent of the SMI, subject to appropriation.

 

Child Care Subsidy Rates.  Child care subsidy base rates must achieve the 85th percentile of market for licensed or certified child care providers.  DCYF rule sets out the base rates for family home providers and child care centers, which includes different regions and age ranges for infants, toddlers, preschool, and school-age child care.

 

Market Rate Surveys.  Completion of a market rate survey is a federal requirement and, at minimum, must be conducted every three years. The two most recent market rate surveys were published in 2024 and 2021. The 2024 survey had a 24 percent provider response rate. The 2021 survey had a 40 percent provider response rate. In 2025, Washington State law was revised to require market rate surveys every two years. The next scheduled survey will be published in 2026.

 

Rate Regions.  There are seven geographic rate regions which each have separate base subsidy rates. Child care centers in Whitman, Benton, Walla Walla, and Clark counties are set to regional rates that are outside of their geographic region.

 

Provider Types.  A child care center is an agency that regularly provides child care for a group of children for periods of less than 24 hours. There are 33,000 children receiving subsidy in child care centers. Family home providers provide child care in the provider's home and may serve up to 12 children. There are 24,000 children receiving subsidy in family homes. Family home providers bargain collectively with the state.

 

Provider Reimbursement.  When a child who has been approved for subsidy attends at least one day in the calendar month, the provider may claim payment for the full authorization period, which may include absent days and paid closure days, such as holidays. Payments are made retroactively following provider billing and verification of at least one day of attendance in the month of service. 

 

Beginning July 1, 2026, provider reimbursement will transition from attendance-based to enrollment-based billing. Payment will occur prospectively on or before the date in which child care service is expected to begin, and the one-day minimum attendance requirement will be eliminated.
Summary of Bill:

Income Eligibility.  Eliminates the income eligibility expansions scheduled to occur in July 2029 and July 2031.

 

Child Care Subsidy Rates.  Requires child care subsidy base rates to achieve the 75th percentile of market, beginning July 1, 2027. A market rate survey cannot be considered for purposes of rate increases unless the survey achieves a provider response rate of 65 percent or higher for each geographic rate region.

 

Rate Regions.  Prohibits child care providers from receiving child care subsidy that is different than the rate for the subsidy region in which the provider is located, beginning July 1, 2026.

 

Provider Reimbursement.  Directs DCYF to adopt a rule that allows providers to claim a full month of payment for a child who has ten or fewer absences in a calendar month, or a half month of payment for a child who has attended yet has greater than ten absences. Absences do not include days when the provider is closed due to holidays, professional training days, or allowable closure days.

 

Enrollment-based and prospective payments are eliminated.
Appropriation: None.
Fiscal Note: March 4, 2026
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: The bill contains an emergency clause and takes effect immediately.