HB 4099
child care; state lottery fund
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Bill overview
This bill redirects a portion of the state lottery fund to support child care initiatives in Arizona. Specifically, $10 million will be deposited into the Arizona Game and Fish Commission Heritage Fund, while $5 million will go to the Arizona Working Parents Support Fund and $4 million to the Arizona Board of Regents’ Arizona Area Health Education System. Additional funds will be allocated to the Department of Child Safety, Department of Health Services, and the Department of Economic Security for programs focused on healthy families, teenage pregnancy prevention, and homeless emergency shelters. The bill also establishes a new fund, the Arizona Working Parents Child Care Program, to provide subsidized child care services to eligible families and requires the Department of Health Services to report on the program’s impact.
Key provisions
- Directs $10,000,000 annually from the state lottery fund to the Arizona Game and Fish Commission Heritage Fund.
- Allocates $5,000,000 to the Arizona Working Parents Support Fund.
- Provides $4,000,000 to the Arizona Board of Regents’ Arizona Area Health Education System.
- Designates funds for the Department of Child Safety’s Healthy Families Program ($4,000,000), Department of Health Services’ teenage pregnancy prevention programs ($3,000,000), Department of Health Services’ Health Start program ($2,000,000), Disease Control Research Fund ($2,000,000), and Federal Women, Infants, and Children Food Program ($1,000,000).
- Establishes the Arizona Working Parents Child Care Program to provide subsidized child care to eligible families.
- Requires the Department of Economic Security to report on grants to nonprofit organizations for homeless shelters.
- Creates a tiered reimbursement system for child care providers to incentivize quality care.
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| REFERENCE TITLE: child care; state lottery fund |
| State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 |
| HB 4099 |
| Introduced by Representatives Hernandez A: Hernandez C, Hernandez L |
AN ACT
amending section 5-572, arizona revised statutes, as amended by laws 2024, chapter 210, section 2; amending section 5-572, arizona revised statutes, as amended by laws 2024, chapter 210, section 3; Amending title 46, chapter 7, article 1, arizona revised statutes, by adding section 46-812; relating to child care.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-572, Arizona Revised Statutes, as amended by Laws 2024, chapter 210, section 2, is amended to read:
START_STATUTE5-572. Use of monies in state lottery fund; report
A. If there are any bonds or bond related obligations payable from the state lottery revenue bond debt service fund, the state lottery revenue bond debt service fund shall be secured by a first lien on the monies in the state lottery fund after the payment of operating costs of the lottery, as prescribed in section 5-555, subsection A, paragraph 1, until the state lottery bond debt service fund contains sufficient monies to meet all the requirements for the current period as required by the bond documents. Debt service for revenue bonds issued pursuant to this chapter shall be paid first from monies that would have otherwise been deposited pursuant to this section in the state general fund. After the requirements for the current period have been satisfied as required by the bond documents, the monies in the state lottery fund shall be expended for the expenses of the commission incurred in carrying out its powers and duties and in the operation of the lottery.
B. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsection A of this section, $10,000,000 shall be deposited in the Arizona game and fish commission heritage fund established by section 17-297.
C. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A and B of this section, $_______________ shall be deposited in the Arizona working parents support fund established by section 46-812, $5,000,000 shall be allocated to the department of child safety for the healthy families program established by section 8-481, $4,000,000 shall be allocated to the Arizona board of regents for the Arizona area health education system established by section 15-1643, $3,000,000 shall be allocated to the department of health services to fund the teenage pregnancy prevention programs established in Laws 1995, chapter 190, sections 2 and 3, $2,000,000 shall be allocated to the department of health services for the health start program established by section 36-697, $2,000,000 shall be deposited in the disease control research fund established by section 36-274 and $1,000,000 shall be allocated to the department of health services for the federal women, infants and children food program. The allocations in this subsection shall be adjusted annually according to changes in the GDP price deflator as defined in section 41-563, and the allocations are exempt from the provisions of section 35-190 relating to lapsing of appropriations. If there are not sufficient monies available pursuant to this subsection, the allocation of monies for each program shall be reduced on a pro rata basis.
D. If the state lottery director determines that monies available to the state general fund may not equal $84,150,000 in a fiscal year, the director shall not authorize deposits to the Arizona game and fish commission heritage fund pursuant to subsection B of this section or the Arizona working parents support fund pursuant to subsection C of this section until the deposits to the state general fund equal $84,150,000 in a fiscal year.
E. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through D of this section, $1,000,000 or the remaining balance in the fund, whichever is less, is appropriated to the department of economic security for grants to nonprofit organizations, including faith-based organizations, for homeless emergency and transitional shelters and related support services. The department of economic security shall submit a report on the amounts, recipients, purposes and results of each grant to the governor, the speaker of the house of representatives and the president of the senate on or before December 31 of each year for the prior fiscal year and shall provide a copy of this report to the secretary of state.
F. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through E of this section, and after a total of at least $99,640,000 has been deposited in the state general fund, $1,750,000 shall be deposited in the Arizona competes fund established by section 41-1545.01. The balance in the state lottery fund remaining after deposits into the Arizona competes fund shall be deposited in the university capital improvement lease-to-own and bond fund established by section 15-1682.03, up to a maximum of eighty percent of the total annual payments of lease-to-own and bond agreements entered into by the Arizona board of regents.
G. All monies remaining in the state lottery fund after the appropriations and deposits authorized in this section shall be deposited in the state general fund.
H. Except for monies expended for debt service of revenue bonds as provided in subsection A of this section, monies expended under subsection A of this section are subject to legislative appropriation.
I. The commission shall transfer monies prescribed in this section on a quarterly basis. END_STATUTE
Sec. 2. Section 5-572, Arizona Revised Statutes, as amended by Laws 2024, chapter 210, section 3, is amended to read:
START_STATUTE5-572. Use of monies in state lottery fund; report
A. If there are any bonds or bond related obligations payable from the state lottery revenue bond debt service fund, the state lottery revenue bond debt service fund shall be secured by a first lien on the monies in the state lottery fund after the payment of operating costs of the lottery, as prescribed in section 5-555, subsection A, paragraph 1, until the state lottery bond debt service fund contains sufficient monies to meet all the requirements for the current period as required by the bond documents. Debt service for revenue bonds issued pursuant to this chapter shall be paid first from monies that would have otherwise been deposited pursuant to this section in the state general fund. After the requirements for the current period have been satisfied as required by the bond documents, the monies in the state lottery fund shall be expended for the expenses of the commission incurred in carrying out its powers and duties and in the operation of the lottery.
B. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsection A of this section, $10,000,000 shall be deposited in the Arizona game and fish commission heritage fund established by section 17-297.
C. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A and B of this section, $__________________ shall be deposited in the Arizona working parents support fund established by section 46-812, $5,000,000 shall be allocated to the department of child safety for the healthy families program established by section 8-481, $4,000,000 shall be allocated to the Arizona board of regents for the Arizona area health education system established by section 15-1643, $3,000,000 shall be allocated to the department of health services to fund the teenage pregnancy prevention programs established in Laws 1995, chapter 190, sections 2 and 3, $2,000,000 shall be allocated to the department of health services for the health start program established by section 36-697, $2,000,000 shall be deposited in the disease control research fund established by section 36-274 and $1,000,000 shall be allocated to the department of health services for the federal women, infants and children food program. The allocations in this subsection shall be adjusted annually according to changes in the GDP price deflator as defined in section 41-563, and the allocations are exempt from the provisions of section 35-190 relating to lapsing of appropriations. If there are not sufficient monies available pursuant to this subsection, the allocation of monies for each program shall be reduced on a pro rata basis.
D. If the state lottery director determines that monies available to the state general fund may not equal $84,150,000 in a fiscal year, the director shall not authorize deposits to the Arizona game and fish commission heritage fund pursuant to subsection B of this section or the Arizona working parents support fund pursuant to subsection C of this section until the deposits to the state general fund equal $84,150,000 in a fiscal year.
E. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through D of this section, $1,000,000 or the remaining balance in the fund, whichever is less, is appropriated to the department of economic security for grants to nonprofit organizations, including faith-based organizations, for homeless emergency and transitional shelters and related support services. The department of economic security shall submit a report on the amounts, recipients, purposes and results of each grant to the governor, the speaker of the house of representatives and the president of the senate on or before December 31 of each year for the prior fiscal year and shall provide a copy of this report to the secretary of state.
F. Of the monies remaining in the state lottery fund each fiscal year after appropriations and deposits authorized in subsections A through E of this section, and after a total of at least $99,640,000 has been deposited in the state general fund, $3,500,000 shall be deposited in the Arizona competes fund established by section 41-1545.01. The balance in the state lottery fund remaining after deposits into the Arizona competes fund shall be deposited in the university capital improvement lease-to-own and bond fund established by section 15-1682.03, up to a maximum of eighty percent of the total annual payments of lease-to-own and bond agreements entered into by the Arizona board of regents.
G. All monies remaining in the state lottery fund after the appropriations and deposits authorized in this section shall be deposited in the state general fund.
H. Except for monies expended for debt service of revenue bonds as provided in subsection A of this section, monies expended under subsection A of this section are subject to legislative appropriation.
I. The commission shall transfer monies prescribed in this section on a quarterly basis. END_STATUTE
Sec. 3. Title 46, chapter 7, article 1, Arizona Revised Statutes, is amended by adding section 46-812, to read:
START_STATUTE46-812. Arizona working parents support fund; Arizona working parents child care program; rules; report; definitions
A. The arizona working parents support fund is established consisting of monies received from the state lottery fund as prescribed in section 5-572, subsection C.� The department shall administer the fund.� Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.�
B. The department shall use the monies in the fund to support the Arizona working parents child care program that is established in the department to provide child care to eligible families.� The department shall allow all eligible parents to participate in the program without paying fees and regardless of income. The department shall pay participating child care providers directly for services provided to eligible children rather than reimbursing eligible families. The department shall set the rates for child care based on a biennial market rate study that is designed to cover the true cost of quality care, including wages, benefits and operation expenses. The department may adopt tiered reimbursement rates to incentivize quality of child care, extended child care hours and infant and toddler care.
C. The department shall adopt rules that include all of the following:
1. The eligibility requirements and verification procedures.
2. The requirements for participating Child care providers.
3. The type of Payment systems to be used, including fraud prevention.
D. On or before June 30, 2027, the department shall submit an annual report to the governor, the president of the senate and the speaker of the house of representatives and shall provide a copy of this report to the secretary of state. The report must include all of the following:
1. The number of eligible children and eligible families who benefited from the program.
2. The number of child care providers that participated in the program, separated by geographic area.
3. The total expenditure amount, including any fund balance.
4. How the program impacted the workforce rates for working parents.
E. The department may implement the program in phases based on available funding and prioritize the program based on the following:
1. Infants and toddlers.
2. Parents without child care.
3. Parents who work nontraditional hours and who are in need of child care.
4. Parents who reside is rural areas and who are in need of child care.
F. For the purposes of this section:
1. "Eligible children" means children from infancy until entry into kindergarten.
2. "Eligible family" means a parent or legal guardian who:
(a) Is currently employed or self-employed, is enrolled in job training, education or workforce development program or is engaged in a job search.
(b) Resides in this state.
3. "Program" means the Arizona working parents child care program.END_STATUTE
Sec. 4. Effective date
Section 5-572, Arizona Revised Statutes, as amended by Laws 2024, chapter 210, section 3 and this act, is effective from and after June 30, 2027.