The joint committee passed House Bill 2,535 HD1 to create a pilot program for contracted classrooms that would provide an additional funding pathway to expand childcare and early‑learning capacity.

Representatives from the Executive Office on Early Learning, the Department of Human Services (DHS), Early Childhood Action Strategies and community partners testified in support. Proponents said contracted classrooms — an existing model used in other states — can provide predictable revenue to providers, support staff compensation, and expand access in underserved settings such as infant‑toddler care and rural communities.

DHS testified it stands on written comments and asked for clarity about federal funding rules and rate setting. The department noted its current market‑rate survey and certificate‑based subsidy system and said it would need to confirm how federal CCDF (Child Care and Development Fund) rules apply to contract payments. Early Childhood Action Strategies and advocates urged the committee to authorize contracted classrooms as one tool to grow supply alongside other investments.

The committee voted to pass the bill unamended, and included direction for DHS to reconcile how contract payments would align with federal requirements and existing rate schedules.

Why it matters: Hawaii is facing a shortage of early‑care slots in many communities while federal pandemic supports end; contracted classrooms aim to stabilize program revenue and allow providers to plan staffing and maintain quality.

What’s next: DHS will review federal compliance questions and work with advocates on implementation plans for the pilot.