Researcher: RP Page 1 4/22/24
OLR Bill Analysis
sHB 5002
AN ACT CONCERNING EARLY CHILDHOOD CARE AND
EDUCATION.
SUMMARY
This bill renames the Early Childhood Education Fund created in the
FY 24-25 budget act the Early Childhood Care and Education Fund and
transfers $50 million to the fund from the General Fund for FY 25 (§ 4).
It establishes a framework for the fund’s deposits and investments and
the state treasurer’s authority and powers on behalf of the fund.
The bill creates a 17-member advisory commission within the
Legislative Department to (1) review and report on the fund’s financial
health and status, (2) submit and update a 10-year plan to the legislature
on fund expenditures that would best support the state’s early
childhood education and child care needs, and (3) recommend
legislative changes to further the fund’s purposes. It also authorizes up
to $50 million in state general obligation bonds for the Office of Early
Childhood (OEC) to implement programs and initiatives to support the
state’s early childhood education and child care needs (§ 3). The bonds
are subject to standard statutory bond issuance procedures and
repayment requirements.
The bill also does the following:
1. requires OEC, within available appropriations, to establish a Tri-
Share Child Care Matching Program serving New London
County in which child care costs are shared equally between
participating employers, employees, and the state (§ 5);
2. requires OEC, for FY 26, to set up and administer a wage
supplement and child care program enhancement grant program
for eligible early childhood education program operators and
child care services providers (§ 6); and 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 2 4/22/24
3. eliminates the requirement that the OEC commissioner annually
report to the legislature on the current Early Childhood
Education Fund and the Blue-Ribbon Panel on Child Care’s
recommendations (§ 7).
EFFECTIVE DATE: July 1, 2024, except that the (1) fund, advisory
commission, and repealer provisions are effective upon passage and (2)
wage supplement and grant program provision is effective July 1, 2025.
§ 1 — EARLY CHILDHOOD CARE AND EDUCATION FUND
Fund Requirements
As under current law, the Early Childhood Care and Education Fund
must contain any money required or allowed by law to be deposited in
it, including funds received from public or private contributions, gifts,
and grants. The bill explicitly allows it to contain federal, state, or local
grants, and additionally allows it to contain any earnings until they are
disbursed according to the bill.
The bill requires the fund’s deposits to be used solely to support the
state’s early childhood education and child care needs. They are not
state property, they cannot be combined with state funds, and the state
has no claim on them. The fund is not a state department, institution, or
agency. It must continue to exist as long as it has deposits or obligations
and until terminated by law.
Under the bill, any contract entered into by the fund, or any
obligation of the fund, is not a state debt or obligation, and the state has
no obligation on account of the fund. Amounts that must be paid from
the fund are limited to the amount deposited there that is available for
the payments.
Treasurer’s Authority and Powers
The bill eliminates the requirement that the comptroller establish the
fund and instead authorizes the treasurer, on the fund’s behalf and to
carry out its purposes, to do the following:
1. receive and invest the fund’s money in any instruments,
obligations, securities, or property as described below; 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 3 4/22/24
2. enter into contractual agreements for services for the fund (e.g.,
legal, actuarial, administrative, and consulting) and pay for them
with the fund’s assets;
3. obtain insurance for the fund’s property, assets, activities, or
deposits;
4. apply for and accept public or private donations to enable the
fund to achieve its objectives;
5. adopt regulations;
6. sue and be sued;
7. establish accounts within the fund; and
8. take other necessary action to carry out the bill’s purposes and
related to the treasurer’s duties under the bill.
Investments
The bill requires the state treasurer to (1) invest the fund’s deposits in
a reasonable way to achieve its objectives; (2) exercise a prudent
person’s care and discretion; and (3) consider such things as rate of
return, risk, maturity, portfolio diversification, liquidity, projected
disbursements and expenditures, and expected deposits and other gifts.
Under the bill, the state treasurer need not require the fund to invest
in state or municipal bonds or other funds he administers. The fund’s
assets must be continuously invested and reinvested, consistent with
the fund’s objectives, until they are disbursed by the comptroller as the
bill allows.
§ 2 — ADVISORY COMMISSION
Membership and Administration
Under the bill, the Early Childhood Care and Education Fund
Advisory Commission consists of the 12 appointed members shown in
the table below and the following state officials or their designees: the
OPM secretary, state treasurer, state comptroller, and early childhood
and education commissioners. 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 4 4/22/24
Table: Early Childhood Care and Education Fund Advisory Commission
Appointing
Authority
Number of
Appointments
Appointee’s Qualifications
House speaker 2 One must be an Early Childhood Cabinet member
who is a parent
Senate
president pro
tempore
2 One must represent a corporation with a significant
physical presence in Connecticut that employs
people who may benefit from early childhood
education and state child care initiatives
House majority
leader
2 One must represent a philanthropic organization
engaged in early childhood education or child care
issues in Connecticut
Senate majority
leader
2 One must represent an early childhood education
program operator in Connecticut
House minority
leader
2 One must represent a non-home-based child care
services provider in Connecticut
Senate minority
leader
2 One must operate or represent a home-based child
care services provider in Connecticut
Under the bill, appointed members may be legislators. They serve at
the pleasure of their appointing authority for a term coterminous with
their appointing authority. Appointing authorities must fill any
vacancies, and those occurring other than by term expiration must be
filled for the remainder of the unexpired term.
The commission is chaired by (1) the state comptroller and (2) two
members selected by the House speaker and Senate president pro
tempore, respectively. The chairpersons must schedule and hold the
first meeting within 90 days after the bill’s passage. The commission
must meet as often as the chairpersons or a majority of its members
deem necessary, and a majority of members constitutes a quorum.
Members are considered to have resigned from the commission if
they miss three consecutive meetings or 50% of the meetings held
during any calendar year.
The bill requires the Finance, Revenue and Bonding Committee’s
administrative staff to serve as the advisory commission’s
administrative staff.
Travel Expenses and Stipend 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 5 4/22/24
Members generally serve without compensation but must be
reimbursed for necessary travel expenses, within available funds. The
exception is for the (1) parent member of the Early Childhood Cabinet
and (2) representatives of an early childhood education program
operator and home- and non-home- based child care services provider,
if they are employees of the respective provider and paid hourly. Under
the bill, these members are eligible for a $25 per hour stipend for each
hour (or part of an hour) that they attend a commission meeting. The
travel time to and from the meeting does not count towards the stipend.
Eligible members must submit a request to the Office of Legislative
Management’s executive director, as he requires, to receive the travel
expenses or stipend. They must provide any documentation the
executive director requires to substantiate the requested amount.
Powers and Duties
The bill authorizes the commission to do the following:
1. review and monitor the Early Childhood Care and Education
Fund to assess its financial sustainability;
2. get the help and data it needs to carry out its purposes from any
executive department, board, commission, or state agency; and
3. do anything else necessary and appropriate to carry out its
duties.
Reporting Requirement
Annually, starting by January 1, 2026, the commission must report to
the Appropriations; Finance, Revenue and Bonding; Education; and
Children’s committees on the Early Childhood Care and Education
Fund’s financial health and status. The report must include:
1. the amount deposited in the fund and whether it is sufficient to
achieve the fund’s purposes,
2. actual or expected disbursements for the applicable fiscal year,
3. the fund’s investments’ rates of return, and 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 6 4/22/24
4. any recommendations for policy changes and statutory changes
to further the fund’s purposes.
By January 1, 2026, the commission must also submit to these same
committees a 10-year plan for the fund’s expenditures that would best
support the state’s early childhood education and child care needs. In
developing this plan, the commission must consider reports on the state
of (1) these needs in Connecticut, (2) kindergarten readiness here, and
(3) best practices in other states. It must update and submit this plan to
these committees at least annually.
Public Hearing
Beginning with FY 26, the commission must annually hold a public
hearing on the state of the fund and of early childhood education and
child care in the state.
§ 5 — TRI-SHARE CHILD CARE MATCHING PROGRAM
Program Duration and Administrator
The bill requires OEC, within available appropriations, to create a
Tri-Share Child Care Matching Program for New London County that
runs for at least two years. It must choose a regional or statewide
organization to administer the program.
The administrator must:
1. set the program’s eligibility criteria for employers and employees
(although the bill sets specific criteria as described below) and
recruit employers to participate,
2. ensure that the child care facilities receiving program funds are
state-licensed and disburse funds to the appropriate providers,
3. collect and ensure timely payment from the state and
participating employers and employees, and
4. coordinate adequate communication between all parties.
OEC must enter into an agreement with its chosen administrator to
perform these duties. This agreement must at least include: 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 7 4/22/24
1. a provision that the administrator must receive, for its
administrative costs, up to 10% of the funds the state allocates to
the program;
2. a requirement that the administrator not commingle program
funds with any other funds it holds or controls, other than those
it receives for administrative costs; and
3. penalties for violating any provision of the agreement or the bill’s
Tri-Share program provisions.
Eligibility Criteria
To participate in the program, employers must have a physical
facility in New London County that is its employees’ principal
workplace. Employees must:
1. be employed by a participating employer;
2. live in Connecticut;
3. have a principal workplace in New London County;
4. be part of the asset limited, income constrained employed
population that is below the ALICE threshold, based on the
United Way of Connecticut’s most recent annual report (see
BACKGROUND); and
5. not be receiving other public assistance for child care costs.
Reporting Requirement
The bill requires the OEC commissioner, beginning with the fiscal
year immediately following the program’s first year, to annually report
on the program to the Appropriations; Finance, Revenue and Bonding;
Education; and Children’s committees. The report must at least include:
1. for the immediately preceding fiscal year, the (a) number of
participating employers and employees and (b) amounts the
administrator disbursed for child care costs and retained for
administrative costs; and 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 8 4/22/24
2. the commissioner’s recommendations for programmatic or
legislative changes to improve the program or further its
purposes.
6 — WAGE SUPPLEMENT AND CHILD CARE PROGRAM
ENHANCEMENT GRANT PROGRAM
Eligible Program Operators and Providers
The bill requires OEC to establish a wage supplement and child care
program enhancement grant program for FY 26 and begin awarding the
grants starting August 1, 2025. Under the bill, the grants are for early
childhood education program operators (i.e., school readiness
programs, private preschool programs, and OEC-contracted child day
care programs) and child care services providers (i.e., child care centers
and group and family child care homes) that (1) meet the eligibility
requirements the agency sets under the bill and (2) submit a grant
application in the way OEC requires.
Eligible Uses
Grantees may use these grants to either (1) supplement the annual
salaries of their employees or (2) address any other programmatic or
administrative needs, according to the OEC guidelines described below.
However, in awarding the grants, the OEC commissioner must give
priority to program operators and providers that will use the grant
exclusively to supplement employee salaries.
Eligibility Criteria and Guidelines
Under the bill, OEC must develop (1) eligibility criteria for program
operators and providers and (2) guidelines for administering the
program and spending the grants. These eligibility criteria must limit
the grants to program operators and providers serving high-need
populations, as determined by the OEC commissioner. In doing so, she
must consider the Blue-Ribbon Panel on Child Care’s findings and
recommendations issued in its 2023 report. (The governor’s executive
order (EO 23-1, March 17, 2023) established this panel, chaired by the
OEC commissioner, to serve as his principal advisor on child care and
early childhood issues and coordinate state agencies’ efforts to promote
an effective child care and early childhood education system.) 2024HB-05002-R000594-BA.DOCX
Researcher: RP Page 9 4/22/24
BACKGROUND
ALICE Threshold
The United Way’s ALICE (i.e., asset limited, income constrained, and
employed) threshold represents the minimum income level needed for
a household to afford an estimated minimum budget (i.e., the ALICE
household survival budget). The threshold is adjusted for household
size and composition for each county.
Based on the United Way’s 2023 ALICE report for Connecticut, to
cover the household survival budget for 2021, a single adult had to earn
$16.56 per hour and a family with two children had to earn a combined
$45.71 per hour.
Related Bill
sSB 10, favorably reported by the Finance, Revenue and Bonding
Committee, contains an identical $50 million general obligation bond
authorization for programs and initiatives enacted to support the state’s
early childhood education and child care needs.
COMMITTEE ACTION
Finance, Revenue and Bonding Committee
Joint Favorable Substitute
Yea 47 Nay 4 (04/03/2024)