(d) The department shall provide child care financial assistance to:

1. (i) families with a child who has an open case at the department of children and families or families with a child who is otherwise referred by the department of children and families;

2. (ii) families currently involved with, or transitioning from, transitional aid to families with dependent children, including:

   1. (A) recipients of transitional aid to families with dependent children benefits;
   2. (B) former recipients of transitional aid to families with dependent children benefits who are working or are engaged in an approved service need activity for up to 1 year after termination of their benefits;
   3. (C) participants who are working or are engaged in an approved service need activity for up to 1 year after the transitional period;

   4. (D) parents who are under 18 years of age who are currently enrolled in a job training program and who would qualify for benefits under chapter 118 if not for the consideration of the income of the minor parents' legal guardians or parents; and (E) recipients of the supplemental nutrition assistance program who are participating in education and training services approved by the department of transitional assistance; and (iii) families in need of early education and care services whose family income is not more than 85 per cent of the state median income; provided, however, that the department shall promulgate regulations to ensure that priority shall be given to families:

      1. (A) whose family income is not more than 50 per cent of the state median income;
      2. (B) in which a parent or caregiver is working in the field of early education and care subject to rules or regulations set by the department;
      3. (C) with children who have a documented disability and whose family income is not more than 85 per cent of the state median income;
      4. (D) who are experiencing homelessness;
      5. (E) who are headed by a young parent as determined by the department; and (F) experiencing domestic violence.
      6. (e) If additional funds are available or the federal government obligates itself to release additional funding to expand access to child care services beyond those reasonably sufficient to fund subsection (d), the department shall, in a manner consistent with any requirements placed on the receipt or expenditure of the relevant federal funds, allocate funding to increase the number of families receiving child care financial assistance based on income eligibility in the following order of priority to provide child care financial assistance to:
      7. (i) families eligible under said clause (iii) of said subsection (d);
      8. (ii) families in need of child care services whose family income is above 85 per cent, but not more than 100 per cent, of the state median income;
      9. (iii) families in need of child care services whose family income is above 100 per cent, but not more than 110 per cent, of the state median income; and (iv) families in need of child care services whose family income is not more than 125 per cent of the state median income.
      10. (f) If a school-age child is receiving child care financial assistance, the assistance shall continue until the end of the school year even if the child reaches the maximum age prior to the last day of the school year.
      11. (g) For the purposes of child care financial assistance eligibility, ''family income'' shall include the income of parents living with the child receiving child care financial assistance but shall not include:
      12. (i) any form of income of foster parents, caregivers or other adult family members;

      13. (ii) income of siblings who are not receiving child care financial assistance; or (iii) earned income of any minor child.

          To the extent allowable under federal laws and regulation, no child care financial assistance provided under this section shall be counted as income or assets for the purpose of disqualifying any person from eligibility for any other government benefit for which the person is otherwise eligible including, but not limited to, transitional aid to families with dependent children benefits.

      14. (h) The department or its agents shall not reduce, terminate or deny continued child care financial assistance to a family based solely on family income unless the income exceeds 85 per cent of the state median income or the income eligibility threshold for currently eligible families as prioritized in subsection (e), whichever is higher. If a family is determined to be ineligible for financial assistance, the family shall be given an opportunity for an administrative review. If the department or its agents, after such administrative review, reduce, terminate or deny a family's child care financial assistance, the department shall provide the family with an opportunity for an administrative appeal hearing and shall process the appeal within 60 days from the date the request is made. Subject to department rules and regulations, while an administrative review or, if applicable, an administrative appeal hearing is pending and until a final determination is made, services supported by child care financial assistance shall continue after receipt of a notice of reduction, termination or denial of continued child care financial assistance.

      15. (i) The department shall review the child care financial assistance program not less than annually to identify access barriers to families and opportunities to improve families' experiences with the child care financial assistance process, including, but not limited to, department paperwork and verification requirements. The department shall take action to remove any access barriers, including, but not limited to:

          1. (i) making technological improvements;
          2. (ii) streamlining the application and renewal processes;
          3. (iii) improving outreach to potentially eligible families regarding the availability of child care financial assistance and the application process; and (iv) improving access for families with limited English proficiency.

      16. (j) Annually, not later than February 15, the department shall file a report to the clerks of the senate and house of representatives, the senate and house committees on ways and means and the joint committee on education on the child care financial assistance program including, but not limited to:

          1. (i) the number of applications received;
          2. (ii) the numbers of applications denied, delineated by reason for denial;
          3. (iii) the number of administrative reviews requested, delineated by reasons for ineligibility as determined by the department;
          4. (iv) the number of administrative reviews performed, delineated by reversal, reduction, termination and denial of child care financial assistance and length of time in which a decision was made; and (v) the number of administrative appeal hearings, delineated by the administrative appeal hearing decisions and length of time in which a decision was made. The report shall be made publicly available on the department's website.
      17. (k) The department shall promulgate regulations necessary to implement this section.