SB 1535 updates Oregon’s child care subsidy framework, primarily by directing the Early Learning Council to adopt rules for the Employment Related Day Care (ERDC) subsidy program and related subsidy programs that emphasize equitable access, family stability, and a broader range of eligible care options. The bill specifies that eligibility can be based on household income, employment or training status, involvement with protective services, homelessness or domestic violence services, or other criteria set by rule. It also requires that subsidized care meet a child’s developmental, disability, and neurodiversity needs and support family well-being, and it allows the council to set policies that improve continuity with a family’s preferred provider.
The bill changes how providers are paid under the subsidy program by requiring reimbursement based on enrollment rather than attendance and by requiring monthly payment deadlines, with an added 9 percent amount if payments are late unless an exception applies. It also authorizes incentives and higher reimbursement rates for providers offering quality-improvement participation, culturally or linguistically specific care, evening or weekend care, infant/toddler care, care for children with disabilities, or care in underserved areas. In addition, it bars eligibility decisions from being based on citizenship or legal status and requires at least 12 months of continued eligibility for qualifying children, subject to limited exceptions.
Beyond the subsidy rules, SB 1535 creates a temporary work group within the Department of Early Learning and Care to study liability insurance costs and liability-related barriers for child care providers, including certified, registered, recorded, and some exempt providers. The work group must include state agency, provider, insurance, and risk-management representatives, review Oregon and national research, and report policy options to reduce insurance burdens, including possible liability immunity or damage caps. That section is repealed in 2029, while the act itself takes effect 91 days after adjournment of the 2026 regular session.
The overall sentiment reflected in the bill’s progress is strongly favorable. The measure passed the Senate committee unanimously, cleared the Senate floor with only one dissenting vote, and passed the House unanimously, suggesting broad bipartisan support for child care access and provider stability. The bill’s caption and amendments also indicate a focus on giving the Early Learning Council flexibility, especially regarding TANF-related priority rules in the subsidy program.
The main points of contention are likely to center on cost and administrative discretion rather than the bill’s overall goals. Potential concerns include the fiscal impact of enrollment-based payments, late-payment penalties, expanded eligibility and incentives, and the study of liability immunity or damage caps, which could affect insurers and provider accountability. The bill also gives the Early Learning Council substantial rulemaking authority, which may draw scrutiny from those concerned about how eligibility priorities and subsidy standards will be implemented.
SB 1535 amends ORS 329A.500 and adds new temporary provisions affecting Oregon’s child care subsidy system, especially the Employment Related Day Care program administered by the Department of Early Learning and Care. It expands and clarifies the council’s rulemaking authority over eligibility, payment methods, copayments, provider incentives, and continuity of care, while setting minimum standards such as a 7 percent copayment cap and a 12-month eligibility period for qualifying families. It also creates a temporary interagency work group to study liability insurance issues for child care providers and report policy recommendations to the Legislature.
The bill appears to have received broad support and little visible opposition. It passed committee unanimously, passed the Senate with only one no vote, and passed the House unanimously. That voting pattern suggests a generally positive sentiment toward improving child care access, provider reimbursement, and system stability, with lawmakers largely aligned on the need to strengthen the subsidy program and examine insurance barriers.
The likely areas of disagreement involve implementation costs, the scope of eligibility, and the balance between provider support and oversight. Enrollment-based reimbursement, late-payment add-ons, expanded incentives, and broader eligibility criteria could increase state spending or administrative complexity. The work group’s charge to explore liability immunity and damage caps may also be controversial for insurers, advocates for injured parties, or those concerned about weakening accountability. Finally, the bill gives the Early Learning Council significant discretion to define criteria and priorities by rule, which could prompt debate over how much flexibility the agency should have.