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2019 VT S 90
Author: Ingram
Version: Introduced
Version Date: 02/08/2019

BILL AS INTRODUCED

2019

S.90

Introduced by Senators Ingram, Balint, Clarkson, Hardy, Lyons and Perchlik

Referred to Committee on

Date:

Subject: Human services; child care; financial assistance; early learning professional tuition repayment assistance; tax credits; special fund

Statement of purpose of bill as introduced: This bill proposes to expand the population served by the Child Care Financial Assistance Program, enhance subsidy size, and increase the rate upon which reimbursements to early learning professionals are based. It also proposes to implement a student loan repayment program for early learning professionals and expand an existing scholarship to individuals seeking a degree in early childhood education or early childhood special education. The bill establishes a refundable tax credit for early learning professionals and for employers investing in child care. It also establishes the Early Care and Learning Fund.

An act relating to establishing incentives for early learning professionals and improving access to child care

It is hereby enacted by the General Assembly of the State of Vermont:

* * * Legislative Intent * * *

Sec. 1. LEGISLATIVE INTENT

It is estimated that half of infants and toddlers likely to need child care in Vermont do not have access to a regulated child care or early learning program, and that nationally, early learning professionals are the lowest-paid college graduates of any degree program. In response, Vermont's Blue Ribbon Commission on Financing High Quality, Affordable Child Care and its subsequent Building Vermont's Future from the Child Up Think Tank recommend that Vermont:

(1) grow and support its early education workforce and address existing compensation disparities;

(2) expand the Child Care Financial Assistance Program to provide a 100 percent benefit to families earning less than Vermont's livable wage;

(3) strengthen and coordinate the early care and learning system and related wraparound support services through the establishment of early care and learning hubs; and

(4) establish a dedicated funding source for the early care and learning system.

* * * Child Care Financial Assistance Program * * *

Sec. 2. 33 V.S.A. Section 3512 is amended to read:

Section 3512. CHILD CARE FINANCIAL ASSISTANCE PROGRAM; ELIGIBILITY

(a)(1) The Child Care Financial Assistance Program is established to subsidize, to the extent that funds permit, the costs of child care for families that need child care services in order to obtain employment, to retain employment, or to obtain training leading to employment. Families seeking employment shall not be entitled to participate in the Program for a period in excess of one month, unless that period is extended by the Commissioner.

(2) The subsidy authorized by this subsection shall be on a sliding scale basis. The scale shall be established by the Commissioner, by rule, and shall bear a reasonable relationship to income and family size. The lower limit of the fee scale shall include families whose gross income is up to and including 100 200 percent of the federal poverty guidelines. The upper income limit of the fee scale shall not be neither less than 200 350 percent of the federal poverty guidelines nor more than 100 percent of the State median income, adjusted for the size of the family. The scale shall be structured so that it encourages employment.

* * *

Sec. 3. CHILD CARE FINANCIAL ASSISTANCE PROGRAM; STATE PLAN; APPROPRIATION

(a) To the extent funds permit, the Commissioner for Children and Families shall amend its federal Child Care and Development Fund State Plan to:

(1) adjust the sliding scale of its Child Care Financial Assistance Program to ensure that families whose gross income is up to and including 200 percent of the federal poverty guidelines receive 100 percent of the available financial assistance benefit;

(2) adjust the sliding scale of its Child Care Financial Assistance Program to ensure that families receive no less than 25 percent of the available financial assistance benefit; and

(3) align the market rates used to inform the fee scale in its Child Care Financial Assistance Program to ensure the reimbursement rate in fiscal year 2020 is based on the 2017 Vermont Market Rate Survey and adjusted annually thereafter to account for inflation and to remain current with updated market rate surveys.

(b) In fiscal year 2020, $26,200,000.00 is appropriated from the General Fund to the Department for Children and Families' Child Development Division for the purpose of implementing this section and Sec. 2 of this act.

* * * Student Loan Repayment Program for Early Learning Professionals * * *

Sec. 4. STUDENT LOAN REPAYMENT; EARLY LEARNING PROFESSIONALS

(a)(1) In fiscal year 2020, $2,000,000.00 is appropriated from the General Fund to the Vermont Student Assistance Corporation, which shall use the funds to provide student loan repayments for early learning professionals who have earned a bachelor's or master's degree in early childhood education or early childhood special education within the preceding five years. The Vermont Student Assistance Corporation's duties under this section are subject to the appropriation of funds by the General Assembly specifically for this purpose.

(2) An eligible early learning professional shall:

(A) work in a center-based child care and preschool program as a lead teacher or in a registered or licensed family child care home as defined by the Department for Children and Families in rule for at least an average of 32 hours per week for 48 weeks of the year; and

(B) receive an annual salary of not more than $40,000.00.

(3) Upon submission of an application to the Vermont Student Assistance Corporation, an eligible early learning professional may receive up to $2,000.00 annually in student loan repayments for work in a preschool classroom and up to $3,000.00 annually in student loan repayments for work in an infant or toddler classroom.

(b) It is the intent of the General Assembly that an appropriation be made in fiscal years 2021 through 2024 to accomplish the purpose set forth in subsection (a) of this section.

(c)(1) The Vermont Student Assistance Corporation shall adopt policies, procedures, and guidelines necessary to implement the provisions of this section.

(2) Funds used from this appropriation shall be expended for repayment of student loans. Student loan repayments shall be available pursuant to this section on a first-come, first-served basis until the appropriation is depleted.

(3) Up to six percent of the total funds appropriated over the course of fiscal years 2020 through 2024 may be used for the Vermont Student Assistance Corporation's staff salaries, fringe benefits, or other expenses associated with the direct administration of this appropriation. Funds shall not be used to cover indirect costs.

(d) As used in this section, "early learning professional" means a "child care provider" as defined in 33 V.S.A. Section 3511 and a person providing "early childhood education" as defined in 16 V.S.A. Section 11.

* * * Scholarship for Early Learning Professionals * * *

Sec. 5. APPROPRIATION; T.E.A.C.H. EARLY CHILDHOOD VERMONT SCHOLARSHIP PROJECT

As funds permit, the Vermont Association for the Education of Young Children (VTAEYC) shall expand the recipients of the T.E.A.C.H. Early Childhood Vermont Scholarship Project to include individuals obtaining a bachelor's degree in early childhood education or early childhood special education. VTAEYC shall adopt policies, procedures, and guidelines necessary to implement the provisions of this section. Scholarships distributed pursuant to this section shall be available on a first-come, first-served basis until any designated funds are depleted.

* * * Tax Incentives for Early Learning Professionals and Employers * * *

Sec. 6. REFUNDABLE TAX CREDIT; EARLY LEARNING PROFESSIONALS

(a) There is established a refundable credit against the tax imposed by 33 V.S.A. Section 5822 for eligible early learning professionals. The credit shall be for the amounts set forth in subdivision (1) of this subsection and based upon the Vermont Northern Lights Career Development Center for Early Childhood and Afterschool Professionals (Northern Lights) credentials set forth in subdivision (2) of this subsection.

(1) Tax credit amounts:

(A) Northern Lights Early Childhood Level 2: $651.00;

(B) Northern Lights Early Childhood Level 3: $1,768.00;

(C) Northern Lights Early Childhood Level 4: $3,693.00;

(D) Northern Lights Early Childhood Level 5 or higher: $5,541.00.

(2) Credentials. An early learning professional eligible for a credit pursuant to this section shall:

(A) be employed by a regulated family child care home or center- based child care or preschool program as defined in rule; and

(B) hold a Level 2 certificate or higher from Northern Lights' Early Childhood Career Development Ladder.

(b) To receive a credit pursuant to this section, an early learning professional shall file an attestation form provided by Northern Lights with his or her income tax returns verifying that the early learning professional meets the requirements for the Northern Lights' Early Childhood Career Development Ladder level claimed.

(c) Beginning in calendar year 2020, the credit amounts provided for in this section shall be adjusted annually by the percentage increase in the Consumer Price Index U.S. city average for all rural consumers, as prepared by the U.S. Department of Labor's Bureau of Labor Statistics and as determined by the Secretary of the U.S. Department of Labor on the first day of December in the preceding calendar year.

(d) The Commissioner may revoke the eligibility of any early learning professional under this section after a hearing, upon a finding that the early learning professional fails to meet substantially all of the requirements for eligibility. Such early learning professional shall reimburse the State for the full amount of any tax credits allowed after revocation of eligibility. Any person aggrieved by the denial or revocation of eligibility may appeal to Superior Court.

(e) The tax credit provided for in this section shall cease to exist on December 31, 2024, and shall not be available for tax year 2025 or after.

(f) On or before January 15, 2021 and 2023, the Commissioner, in conjunction with the Commissioner of Taxes, shall submit a report to the House Committees on Human Services and Ways and Means and to the Senate Committees on Finance and Health and Welfare providing:

(1) the number of early learning professionals eligible for a tax credit under this section;

(2) the number of early learning professionals who applied for a tax credit under this section in each of the preceding calendar years;

(3) the total monetary amount of tax credits issued under this section in each of the preceding years; and

(4) the average monetary amount of a tax credit issued under this section in each of the preceding years.

(g) As used in this section, "early learning professional" means a "child care provider" as defined in 33 V.S.A. Section 3511 and a person providing "early childhood education" as defined in 16 V.S.A. Section 11.

Sec. 7. REFUNDABLE TAX CREDIT FOR BUSINESSES OFFERING CHILD CARE SUPPORT

(a) A refundable credit against Vermont corporate or business income tax shall be available for eligible businesses that incur any one or more of the following child care expenses related to:

(1) construction, renovation, expansion, or repair of an eligible child care or early learning program;

(2) purchase of equipment for an eligible child care or early learning program;

(3) maintenance or operation of an eligible child care or early learning program;

(4) payments made to an eligible child care or early learning program for child care or early learning services to support employees;

(5) purchase of child care slots at an eligible child care or early learning program that are provided to or reserved for the children of employees; and

(6) in-kind monetary donations to an eligible child care or early learning program, a parent-child center as defined in 33 V.S.A. Section 3701, or community child care support agency.

(b) Credits for the expenses set forth in subsection (a) of this section shall be based on a percentage of an eligible business's child care or early learning expenses and correspond to the quality of the regulated child care or early learning program as determined by Vermont's STep Ahead Recognition System (STARS).

(1) Up to $25,000.00 in expenses related to the construction of an eligible child care and early learning program shall be eligible for a 20 percent refundable credit.

(2) Up to $25,000.00 in expenses related to the renovation, expansion, or repair of an eligible child care and early learning program; the purchase of equipment for an eligible child care and early learning program; or the maintenance or operation of an eligible child care and early learning program shall be eligible for a refundable credit as follows:

(A) an eligible five-star child care and early learning program: 20 percent credit;

(B) an eligible four-star child care and early learning program: 15 percent credit;

(C) an eligible three-star child care and early learning program: 10 percent credit; and

(D) an eligible one- or two-star child care and early learning program: five percent credit.

(3) Payments made to an eligible child care or early learning program for child care or early learning services to support employees or the purchase of child care slots at an eligible child care or early learning program that are provided to or reserved for the children of employees shall be eligible for the following credit:

(A) up to $4,000.00 per child per tax year for services or slots purchased from an eligible five-star child care or early learning program shall be eligible for a 20 percent refundable credit;

(B) up to $3,000.00 per child per tax year for services or slots purchased from an eligible four-star child care or early learning program shall be eligible for a 15 percent refundable credit;

(C) up to $2,000.00 per child per tax year for services or slots purchased from an eligible three-star child care or early learning program shall be eligible for a 10 percent refundable credit;

(D) up to $1,000.00 per child per tax year for services or slots purchased from an eligible two-star child care or early learning program shall be eligible for a five percent refundable credit; and

(E) up to $500.00 per child per tax year for services or slots purchased from an eligible one-star child care or early learning program shall be eligible for a five percent refundable credit.

(4) Up to $5,000.00 of in-kind or monetary donations to an eligible child care or early learning program shall be eligible for a refundable credit as follows:

(A) to an eligible five-star child care or early learning program: 20 percent credit;

(B) to an eligible four-star child care or early learning program: 15 percent credit;

(C) to an eligible three-star child care or early learning program: 10 percent credit; and

(D) to an eligible one- or two-star child care or early learning program: five percent credit.

(5) Up to $5,000.00 of in-kind monetary donations to a parent-child center as defined in 33 V.S.A. Section 3701, or community child care support agency shall be eligible for a refundable credit of 20 percent.

(c) The credits provided for in this section shall be allowed against a corporate income tax or business income tax for the taxable period in which the credit is earned. If the tax credit exceeds the amount of such taxes due, then the unused credit shall be refunded as provided for in this title.

(d)(1) Annually, the Department for Children and Families shall make available to the Department of Taxes a list of all eligible child care and early learning programs, excluding those programs whose license was revoked during the tax year due to regulatory violations.

(2) In order for a business to claim a credit under this section, the business shall provide the Department of Taxes with the following:

(A) For expenses related to a regulated child care and early learning program, the business shall provide:

(i) the name and Vermont licensing number of the eligible child care or early learning program to or for whom the eligible expenses were paid;

(ii) the amount and nature of qualifying expenses paid by or on behalf of each child care or early learning program;

(iii) the eligible child care or early learning program's STAR rating; and

(iv) any other information required by the Commissioner of Taxes.

(B) For expenses related to a parent-child center or community child care support agency, the business shall provide:

(i) the name and tax identification number of the eligible child care or early learning program to or for whom the eligible expenses were paid;

(ii) the amount and nature of qualifying expenses at each eligible child care or early learning program; and

(iii) any other information required by the Commissioner of Taxes.

(e) The tax credit provided for in this section shall cease to exist on December 31, 2024, and shall not be available for tax year 2025 or after.

(f) As used in this section, an "eligible child care and early learning program" means a registered or licensed family child care home, center-based child care or preschool program, or after school program as defined by the Department for Children and Families' Child Development Division in rule.

(g) The amount of the credits permitted under this section shall be limited to $2,000,000.00 in any taxable year. If the amount of credits claimed in a taxable year exceeds $2,000,000.00, the credits shall be distributed to claimants on a proportional basis by the Commissioner of Taxes.

Sec. 8. 33 V.S.A. chapter 35, subchapter 4 is amended to read:

Subchapter 4. Child Care Facilities Financing Special Funds

* * *

Section 3532. EARLY CARE AND LEARNING FUND

(a)(1) The Early Care and Learning Fund is established pursuant to 32 V.S.A. chapter 7, subchapter 5 to consolidate monies designated for child care and early learning, workforce development, quality improvement, and technical assistance. It shall ensure the equitable funding for programs that support:

(A) the care of children from birth through age 13, or to age 19, based on certain qualifying conditions; and

(B) the early education of children from birth through age five.

(2) The Fund shall be administered by the Department for Children and Families. The Department shall consult with the Agency of Education with regard to the administration of publicly-funded prekindergarten.

(b) Monies appropriated from this Fund shall be used to make payments to:

(1) school districts, supervisory unions, and registered or licensed child care and early learning programs for the support of publicly funded prekindergarten education in accordance with 16 V.S.A. Section 829; and

(2) registered or licensed child care and early learning programs for the provision of child care and early learning services.

Sec. 9. EFFECTIVE DATE

This act shall take effect on July 1, 2019.


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