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2024 SESSION

24101513D
SENATE BILL NO. 54
Offered January 10, 2024
Prefiled December 22, 2023
A BILL to amend and reenact § 22.1-289.03 of the Code of Virginia, relating to early childhood care and education system; publicly funded providers; funding formula; educator incentive; nonreverting fund to capture unspent Virginia Preschool Initiative balances.
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Patrons-- Locke, Rouse and Subramanyam
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Referred to Committee on Education and Health
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Be it enacted by the General Assembly of Virginia:

1. That § 22.1-289.03 of the Code of Virginia is amended and reenacted as follows:

§ 22.1-289.03. Early childhood care and education system; establishment; funding formula, educator incentive, and nonreverting fund for publicly funded providers.

A. The Board shall establish a statewide unified public-private system for early childhood care and education in the Commonwealth to ensure that every child has the opportunity to enter kindergarten healthy and ready to learn. Such system shall be administered by the Board, the Superintendent, and the Department and shall be formed, implemented, and sustained through a structure that engages and leverages both state-level authority and regional-level public-private partnership assets.

B. It is the intent of the General Assembly that the system established pursuant to subsection A shall (i) provide families with coordinated access for referral to early childhood education programs, (ii) provide families with easy-to-understand information about the quality of publicly funded early childhood care and education programs, (iii) establish expectations for the continuous improvement of early childhood care and education programs, and (iv) establish shared expectations for early childhood care and education programs among the Department of Education, the Department of Social Services, local school divisions, and state and regional stakeholders.

C. The system established pursuant to subsection A shall consist of a combination of programs offered through (i) the Virginia Preschool Initiative, pursuant to § 22.1-289.09, or any other school-based early childhood care and education program; (ii) licensed programs, pursuant to Article 3 (§ 22.1-289.010 et seq.); and (iii) unlicensed programs, pursuant to Article 4 (§ 22.1-289.030 et seq.).

D. To address family demand and preferences for affordable, high-quality early childhood care and education services, funding for publicly funded providers shall be provided using a formula established and maintained by the Department that establishes the minimum funding and number of slots per biennium based on a cost of quality rate per child, actual data from the prior year, unserved waitlists, and a growth rate differential based on growth in prior biennia. Such funding formula shall include (i) an annual per-child cost determined through re-benchmarking for the Virginia Preschool Initiative; (ii) an annual per-child cost based on a federally approved alternative cost methodology for the Mixed Delivery Program; (iii) an annual per-child cost based on a federally approved alternative cost methodology for the Child Care Subsidy Program, which program shall be open to each child who is under the age of 13 in each family for as long as (a) the family's income does not exceed 85 percent of the state median income, (b) the family includes at least one child who is five years of age or younger and has not started kindergarten, and (c) the family meets all other eligibility requirements; and (iv) current program eligibility criteria. Such funding formula shall not affect regularly recurring federal funding including federal funding provided for the Child Care Subsidy Program, Early Head Start, or Head Start, or pursuant to Part B of the federal Individuals with Disabilities Education Act, 20 U.S.C. § 1411 et seq., and pursuant to such funding formula, such federal funds are required to be maximized and fully expended before state general funds are expended.

Each local school division and each regional entity established by the Board pursuant to subsection D of § 22.1-289.05 shall indicate the number of slots needed for each publicly funded provider for each upcoming year no later than May 15. The Department shall reallocate slots with available funding as determined by the funding formula no later than July 1. Following fall enrollment periods, the Department shall make adjustments based on family preferences. In providing funding for slots pursuant to the funding formula, all current-year state general funds shall be expended first. If waitlists for slots at publicly funded providers remain, available state general funds from prior years shall be used to address family demand and preferences.

E. To strengthen the quality of, attract new educators to, and reduce staffing shortages and turnover in publicly funded providers, there is hereby established an early childhood educator incentive program to be administered by the Department, hereinafter known as RecognizeB5, whereby a monetary incentive is provided to teachers who work directly with children for at least 30 hours per week at publicly funded providers that participate in the uniform measurement and improvement system established pursuant to subsection A of § 22.1-289.05 and known as VQB5, with the exception of teachers who are employed by local school boards. The Department shall base the distribution of funding pursuant to RecognizeB5 on actual data and growth rate differentials for the prior year. The Department shall submit to the General Assembly no later than December 1 of each year a report on the usage and impact of RecognizeB5 and any plans to phase out RecognizeB5 based on its success in achieving the goals set forth in this subsection.

F. There is hereby created in the state treasury a special nonreverting fund to be known as the Early Childhood Care and Education Fund, referred to in this section as "the Fund." The Fund shall be established on the books of the Comptroller. All funds appropriated for such purpose and any gifts, donations, grants, bequests, or other funds received on its behalf shall be paid into the state treasury and credited to the Fund. All unspent balances from the Virginia Preschool Initiative at the end of each fiscal year shall not revert to the general fund but shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for the purpose of providing early childhood care and education services. Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by the Superintendent. The Superintendent shall submit to the General Assembly no later than December 1 of each year a report on Fund revenues, distributions, and balances.