EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0881*
HOUSE BILL 881
F1, Q3 3lr1120
By: Delegate Queen
Introduced and read first time: February 9, 2023
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Early Learning Collaboratives – Established and Tax Credit for Contributions 2
FOR the purpose of authorizing certain public and private providers of prekindergarten to 3
form certain early learning collaboratives as part of a certain publicly funded 4
prekindergarten program; requiring certain funds to be distributed to an early 5
learning collaborative in a certain manner; authorizing a certain person to make a 6
certain monetary contribution to an early learning collaborative; allowing a credit 7
against the State income tax for a certain monetary contribution to an early learning 8
collaborative subject to certain limitations; requiring the State Department of 9
Education to administer the credit; and generally relating to prekindergarten, early 10
learning collaboratives, and an income tax credit for a certain monetary contribution 11
to an early learning collaborative. 12
BY repealing and reenacting, with amendments, 13
Article – Education 14
Section 5–229(d), 7–1A–01, 7–1A–04(b), and 7–1A–05 15
Annotated Code of Maryland 16
(2022 Replacement Volume) 17
BY adding to 18
Article – Education 19
Section 7–1A–05.1 and 7–1A–05.2 20
Annotated Code of Maryland 21
(2022 Replacement Volume) 22
BY adding to 23
Article – Tax – General 24
Section 10–757 25
Annotated Code of Maryland 26
(2022 Replacement Volume) 27
2 HOUSE BILL 881
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Education 3
5–229. 4
(d) (1) For public providers THAT ARE NOT PART OF AN EARLY LEARNING 5
COLLABORATIVE UNDER TITLE 7, SUBTITLE 1A OF THIS ARTICLE , each fiscal year: 6
(i) The State shall distribute the State share to each county board; 7
and 8
(ii) The county board shall distribute to each public provider the 9
minimum school funding amount for prekindergarten calculated under § 5–234 of this 10
subtitle. 11
(2) For private providers THAT ARE NOT PART OF AN EARLY LEA RNING 12
COLLABORATIVE UNDER TITLE 7, SUBTITLE 1A OF THIS ARTICLE , each fiscal year: 13
(i) The State shall distribute the State share for private providers 14
to the Department; 15
(ii) The county shall distribute the local share for private providers 16
to the Department; and 17
(iii) The Department shall distribute the State and local share to the 18
private providers. 19
(3) FOR PROVIDERS THAT ARE P ART OF AN EARLY LEARNING 20
COLLABORATIVE UNDER TITLE 7, SUBTITLE 1A OF THIS ARTIC LE, EACH FISCAL 21
YEAR: 22
(I) THE STATE SHALL DISTRIBUT E THE STATE SHARE: 23
1. TO EACH COUNTY BOARD IN AN EARLY LEARNING 24
COLLABORATIVE ; AND 25
2. FOR PRIVATE PROVIDERS IN AN EARLY LEARNING 26
COLLABOR ATIVE TO THE DEPARTMENT ; 27
(II) THE COUNTY SHALL DIST RIBUTE: 28
1. TO EACH PUBLIC PROVID ER, THE MINIMUM SCHOOL 29
FUNDING AMOUNT FOR P REKINDERGARTEN CALCU LATED UNDER § 5–234 OF THIS 30 HOUSE BILL 881 3
SUBTITLE; AND 1
2. THE LOCAL SHARE F OR PRIVATE PROVIDERS IN AN 2
EARLY LEARNING COLLA BORATIVE TO THE DEPARTMENT ; AND 3
(III) THE DEPARTMENT SHALL DIST RIBUTE THE STATE AND 4
LOCAL SHARE TO THE P RIVATE PROVIDERS IN AN EARLY LEARNING 5
COLLABORATIVE . 6
7–1A–01. 7
(a) In this subtitle the following words have the meanings indicated. 8
(b) “Cost of quality” means the per–pupil amount provided under § 5–229 of this 9
article. 10
(c) “EARLY LEARNING COLLABORATIVE ” MEANS A GROUP OF PUBLIC AND 11
PRIVATE PROVIDERS THAT TOGETHER MEETS THE REQUIREMENTS UND ER §§ 12
7–1A–04 AND 7–1A–05.1 OF THIS SUBTITLE. 13
(D) “Eligible prekindergarten provider” includes an: 14
(1) Eligible public provider; [and] 15
(2) Eligible private provider; AND 16
(3) EARLY LEARNING COLLABORATIVE . 17
[(d)] (E) (1) “Eligible private provider” means a community–based early 18
learning program that: 19
(i) Is licensed in the State; 20
(ii) Does not charge more tuition for full–day prekindergarten than 21
the cost of quality; and 22
(iii) Meets the requirements under § 7–1A–04 of this subtitle. 23
(2) “Eligible private provider” includes the Ulysses Currie Head Start 24
Program under § 5–231 of this article. 25
[(e)] (F) “Eligible public provider” means an early learning program that: 26
(1) Is provided by a county board at a public school; and 27
4 HOUSE BILL 881
(2) Meets the requirements under § 7–1A–04 of this subtitle. 1
[(f)] (G) “Full–day prekindergarten” means an early learning program with a 2
six and one–half hour school day. 3
[(g)] (H) “Prekindergarten program” means an early learning program at an 4
eligible prekindergarten provider. 5
[(h)] (I) “Prekindergarten slot” means the available space for a child to attend 6
a prekindergarten program. 7
[(i)] (J) “Tier I child” means a child: 8
(1) Who is 3 or 4 years old; 9
(2) Whose family income is less than or equal to 300% of the federal poverty 10
level; and 11
(3) Whose family chooses to enroll the child in full–day prekindergarten. 12
[(j)] (K) “Tier II child” means a child: 13
(1) Who is 4 years old; 14
(2) Whose family income is more than 300% but not more than 600% of the 15
federal poverty level; and 16
(3) Whose family chooses to enroll the child in full–day prekindergarten. 17
[(k)] (L) “Tier III child” means a child: 18
(1) Who is 4 years old; 19
(2) Whose family income is more than 600% of the federal poverty level; 20
and 21
(3) Whose family chooses to enroll the child in full–day prekindergarten. 22
7–1A–04. 23
(b) In addition to the requirements listed in subsection (a) of this section, an 24
eligible prekindergarten provider shall: 25
(1) If the provider is an eligible private provider OR AN EARLY LEARNING 26
COLLABORATIVE , achieve a quality rating level of 3 in the Maryland EXCELS program 27
and publish that quality rating in a publicly available manner, determined by the 28 HOUSE BILL 881 5
Department; 1
(2) If the provider is an eligible public provider, achieve a quality rating 2
level of 4 in the Maryland EXCELS program and publish that quality rating in a publicly 3
available manner, determined by the Department; 4
(3) Submit to the Department a plan to achieve a quality rating level 5 in 5
the Maryland EXCELS program within 5 years after becoming an eligible prekindergarten 6
provider; 7
(4) Achieve in accordance with the plan a quality rating level 5 in the 8
Maryland EXCELS program within 5 years after becoming an eligible prekindergarten 9
provider and publish that quality rating in a publicly available manner, determined by the 10
Department; and 11
(5) Except as otherwise provided in § 7–1A–07 of this subtitle, be open for 12
pupil attendance in accordance with § 7–103 of this title. 13
7–1A–05. 14
(a) (1) Each county board shall enter into a memorandum of understanding 15
with the Department, each eligible private provider AND EARLY LEARNING 16
COLLABORATIVE participating in publicly funded prekindergarten in the county, and 17
other applicable government agencies. 18
(2) Before executing a memorandum of understanding under this section, 19
each county board shall submit an implementation plan of the proposed memorandum of 20
understanding to the Accountability and Implementation Board in accordance with § 21
5–404 of this article. 22
(b) The memorandum of understanding shall provide for: 23
(1) Services for children with disabilities; 24
(2) A process by which a parent is able to indicate a preference for eligible 25
prekindergarten providers; 26
(3) The manner for processing the payment of the State share, local share, 27
and family share for each child who is enrolled with an eligible prekindergarten provider; 28
(4) Any agreed upon administrative costs to be retained by an agency that 29
is party to the agreement; 30
(5) The manner in which the parties will meet the requirements of this 31
subtitle; 32
(6) A plan to address racial and socioeconomic integration in 33 6 HOUSE BILL 881
prekindergarten classrooms; and 1
(7) Any other provisions necessary to carry out this subtitle. 2
(c) A memorandum of understanding under this section shall seek to avoid, to the 3
extent practicable, a disproportionate concentration of students of the same race, ethnicity, 4
disability status, and income within an eligible provider. 5
7–1A–05.1. 6
(A) THE PURPOSE OF AN EARLY LEARNING COLLABORATIVE IS TO ENA BLE 7
PUBLIC AND PRIVATE PROVIDERS TO JOIN TOGETHER TO MEET THE REQUIREMENTS 8
OF § 7–1A–04 OF THIS SUBTITLE. 9
(B) (1) EACH EARLY LEARNING COLLABORATIVE SHALL C ONSIST OF: 10
(I) ONE ELIGIBLE PUBLIC PROVIDER ; AND 11
(II) ONE ULYSSES CURRIE HEAD START PROGRAM UNDER § 12
5–231 OF THIS ARTICLE. 13
(2) IN ADDITION TO THE RE QUIRED MEMBERS UNDER PARAGRAPH 14
(1) OF THIS SUBSECTION , AN EARLY LEARNING CO LLABORATIVE MAY INCL UDE ONE 15
OR MORE PRIVATE PROV IDERS OF A COMMUNITY –BASED EARLY LE ARNING 16
PROGRAM THAT : 17
(I) ARE LICENSED IN THE STATE; AND 18
(II) DO NOT CHARGE MORE TU ITION FOR FULL –DAY 19
PREKINDERGARTEN THAN THE COST OF QUALITY . 20
(C) (1) SUBJECT TO PARAGRAPH (4) OF THIS SUBSECTION , EACH 21
PROSPECTIVE EARLY LEARNING COLLA BORATIVE SHALL DESIGNATE A LEAD 22
MEMBER. 23
(2) THE LEAD MEMBER SHALL: 24
(I) SUBMIT AN APPLICATION TO THE DEPARTMENT FOR 25
APPROVAL AS AN EARLY LEARNING COLLABORATI VE; 26
(II) BE THE FISCAL AGENT FOR PURPOSES OF RECE IVING AND 27
DISTRIBUTING A CONTRIBUTION MADE TO THE EARLY LE ARNING COLLABORATIVE 28
UNDER § 7–1A–05.2 OF THIS SUBTITLE; AND 29
HOUSE BILL 881 7
(III) ENSURE EACH MEMBER OF THE EARLY LEARNING 1
COLLABORATIVE IS COMPLIANT WITH § 7–1A–04 OF THIS SUBTITLE. 2
(3) THE APPLICATION UNDER PARAGRAPH (2)(I) OF THIS 3
SUBSECTION SHALL BE SUBMITTED I N THE MANNER AND FORM THAT THE 4
DEPARTMENT REQUIRES . 5
(4) THE COUNTY BOARD SHAL L BE THE LEAD MEMBER IF THERE IS NO 6
SUITABLE ALTERNATIVE . 7
7–1A–05.2. 8
(A) AN INDIVIDUAL MAY MAKE A MONETARY CONTRIBUTION TO A LEAD 9
MEMBER OF AN EARLY LEARNING COLLABORATIVE TO SUPPORT THE COSTS OF THE 10
EARLY LEARNING COLLABORATIVE . 11
(B) A LEAD MEMBER THAT RECEIVES A CONT RIBUTION UNDER THIS 12
SECTION SHALL: 13
(1) PROVIDE A RECEIPT TO THE PERSON MAKING THE 14
CONTRIBUTION ; AND 15
(2) DISTRIBUTE THE CONTRI BUTION EQUALLY AMONG THE 16
MEMBER S OF THE EARLY LEARNIN G COLLABORATIVE . 17
(C) AN INDIVIDUAL WHO MAKES A CONTRIBUTION UNDER THIS SECTION 18
MAY BE ELIGIBLE FOR AN INCOME TAX CREDIT UN DER § 10–757 OF THE 19
TAX – GENERAL ARTICLE. 20
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 21
as follows: 22
Article – Tax – General 23
10–757. 24
(A) IN THIS SECTION, “DEPARTMENT ” MEANS THE STATE DEPARTMENT OF 25
EDUCATION. 26
(B) SUBJECT TO THE LIMITA TIONS OF THIS SECTIO N, A TAXPAYER MAY 27
CLAIM A CREDIT AGAIN ST THE STATE INCOME TAX IN AN AMOUNT EQUAL TO THE 28
AMOUNT STATED IN THE TAX CREDIT CERTI FICATE PROVIDED BY THE DEPARTMENT 29
FOR A CONTRIBUTION M ADE TO AN EARLY LEAR NING COLLABORATIVE IN 30
ACCORDANCE WITH § 7–1A–05.2 OF THE EDUCATION ARTICLE. 31 8 HOUSE BILL 881
(C) BEFORE RECEIVING A TA X CREDIT CERTIFICATE UNDER THIS SECTION , 1
A TAXPAYER SHALL SUB MIT TO THE DEPARTMENT AN APPLICA TION WITH THE 2
FOLLOWING INFORMATIO N: 3
(1) THE NAMES OF THE TAXP AYER AND THE EARLY L EARNING 4
COLLABORATIVE TO WH ICH THE CONTRIBUTIO N WAS MADE; 5
(2) THE RECEIPT PROVIDED UNDER § 7–1A–05.2 OF THE EDUCATION 6
ARTICLE; AND 7
(3) ANY OTHER INFORMATION REQUIRED BY THE DEPARTMENT . 8
(D) (1) SUBJECT TO THE LIMITA TIONS OF THIS SUBSEC TION, THE 9
DEPARTMENT , ON A FIRST–COME, FIRST–SERVED BASIS, SHALL ISSUE A TAX CR EDIT 10
CERTIFICATE TO A TAX PAYER WHO HAS MET THE REQUIREM ENTS OF SUBSECTION 11
(C) OF THIS SECTION. 12
(2) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, THE AMOUNT 13
OF THE TAX CREDIT ST ATED IN THE TAX CERT IFICATE SHALL BE EQUAL TO TH E 14
AMOUNT OF THE CONTRI BUTION INDICATED ON THE TAXPAYER’S RECEIPT. 15
(3) THE DEPARTMENT MAY NOT IS SUE TAX CREDIT CERTI FICATES 16
FOR CREDIT AMOUNTS : 17
(I) TOTALING MORE THAN $1,000,000 FOR A SINGLE TAXPAYE R 18
IN A TAXABLE YEAR ; AND 19
(II) IN THE AGGREGATE TOTA LING MORE THAN $16,000,000 IN 20
ANY TAXABLE YEAR. 21
(E) ON OR BEFORE JANUARY 31 EACH YEAR, THE DEPARTMENT SHALL 22
REPORT TO THE COMPTROLLER ON THE TA X CREDIT CERTIF ICATES ISSUED UNDER 23
THIS SECTION DURING THE PRIOR TAXABLE YE AR. 24
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 25
1, 2023. Section 2 of this Act shall be applicable to all taxable years beginning after 26
December 31, 2022. 27