A5127

An Act establishing a child care stabilization and operation grant program in the Department of Human Services and supplementing Title 30 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. In the wake of the coronavirus 2019 (COVID-19) pandemic, declines in child care-industry employment restricted the availability of child care, which strained families’ already costly access to care. To remedy this problem, the Biden Administration made a historic investment in the United States child care industry by providing $24 billion in subsidies to child care providers.

b. The March 2021 enactment of the American Rescue Plan (ARP) provided historic federal funding to the child care industry. The $24 billion in subsidies to child care providers helped to stabilize the industry during the COVID-19 pandemic, while also addressing preexisting challenges in the market for child care. The flexibility of the funds helped providers stabilize their businesses in one of the most tumultuous periods in recent history.

c. In November 2023, the Council of Economic Advisors (CEA) published a working paper that evaluated the impact of the child care stabilization funds allocated by the ARP. The working paper found that the child care stabilization funds accomplished their goal of stabilizing the child care industry, resulting in increases in wages and employment for child care workers, as well as increases in the labor force participation rate and employment for mothers of young children.

d. It is well established that access to high-quality, affordable child care increases a state’s labor supply, expands economic productive capacity, and supports the healthy development of children and the financial well-being of working families.

e. As the State prepares to implement the New Jersey Strategic Plan for Preschool Expansion, the continued stability of the State’s child care industry and the fiscal impact that the expansion of preschool will have on child care providers must be addressed.

f. Increasing the number of preschool programs in the State may lead to increased costs for child care providers as such providers would be required to meet additional regulatory standards.

g. Additionally, the transition of three- and four-year-olds from preschool and child care programs to school-based care will affect the number of families accessing child care services in the State, resulting in revenue losses for child care providers.

h. Ensuring the stability of child care infrastructure is important in expanding the State’s labor supply and ensuing economic activity. These facts underscore the need to treat the child care industry like other forms of infrastructure that are supported by governmental investment. It is, therefore, in the best interest of the State to establish a grant program to stabilize the State’s child care infrastructure, provide financial support to child care providers, support the healthy development of children, and reinforce the economic well-being of working families in New Jersey.

2. a. There is established in the Department of Human Services a child care stabilization and operation grant program to provide grants for operating expenses and workforce supports for licensed child care and registered family day care providers that meet the requirements of subsection c. of this section.

b. To be eligible for consideration for a grant award under this section, a licensed child care provider or registered family day care provider shall submit an application to the Department of Human Services, in a form and manner prescribed by the department, outlining the purposes for which a grant award would be used.

c. The Commissioner of Human Services shall establish selection criteria for the awarding of one-time grants under the program to a licensed child care or registered family day care home, in an amount to be determined by the commissioner, based upon review of the applications and the:

(1) child care center or family day care provider’s capacity to legally serve children based on State child care licensing or family day care registration requirements;

(2) number of families served by the child care or family day care provider who are enrolled in the State’s child care assistance program; and

(3) availability of infant and toddler slots at the child care center or family day care home, as applicable.

d. In awarding grants under this section, the Department of Human Services shall give preference to licensed child care and registered family day care providers that are:

(1) located in communities identified as child care deserts with few or no options for high-quality child care and have been affected by a significant number of child care facility or family day care home closures;

(2) located in communities with high percentages of low-income families and serving a significant proportion of families eligible for the State’s child care assistance program; and

(3) impacted by the State’s expansion of universal preschool and the transition of three- and four-year-olds from preschool and child care programs to school-based care, resulting in substantial revenue loss.

3. a. There is established in the Department of Human Services a fund to be known as the “Child Stabilization and Operation Program Fund.” This fund shall be the repository for monies appropriated pursuant to section 5 of this act and shall be used to support the grant program established pursuant to section 2 of this act.

b. The monies deposited in the fund shall be distributed by the department to licensed child care and registered family day care providers, who meet the eligibility requirements of subsection c. of section 2 of this act, as grants that may be used to:

(1) pay rent or make mortgage payments;

(2) purchase insurance and pay premiums;

(3) pay for classroom materials and supplies; and

(4) cover payroll, workforce compensation, and transportation costs.

c. The Department of Human Services shall accept and approve the applications of licensed child care and registered family day care providers for one-time grants from the fund, and shall award the grants to child care or family day care providers in accordance with section 2 of this act.

4. a. The Commissioner Human Services shall submit a report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), one year after the establishment of the grant program established pursuant to this act and annually thereafter.

b. The report shall include, but not be limited to, information on the number of grant applicants, the number and amounts of grants awarded, the purposes for which grant funds were used, and any recommendations concerning the continuation or expansion of the grant program.

5. There is appropriated from the General Fund and the New Jersey Economic Development Authority’s Child Care Facilities Improvement Grant Program such amounts as may be necessary to implement the provisions of this act and to establish the Child Stabilization and Operation Program Fund, as determined by the Commissioner of Human Services and subject to the approval of the Director of the Division of Budget and Accounting in the Department of Treasury.

6. The Department of Human Services, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations as may be necessary to implement the provisions of this act.

7. This act shall take effect on the first day of the sixth month next following the date of the enactment.

STATEMENT

This bill establishes a child care stabilization and operation grant program in the Department of Human Services (DHS) to provide grants for operating expenses and workforce supports for licensed child care and registered family day care providers that meet the requirements of the bill.

To be eligible for consideration for a grant award, a licensed child care provider or registered family day care provider is to submit an application to the DHS outlining the purposes for which a grant award would be used.

The Commissioner of Human Services is to establish selection criteria for the awarding of one-time grants under the program to a licensed child care or registered family day care provider, based upon review of the applications and the requirements outlined in the bill.

The bill also establishes the “Child Stabilization and Operation Program Fund” which will be the repository for monies appropriated to support the grant program.

The monies deposited in the fund are to be distributed to eligible licensed child care or registered family day care providers and may be used to: (1) pay rent or make mortgage payments; (2) purchase insurance and pay premiums; (3) pay for classroom materials and supplies; and (4) cover payroll, workforce compensation, and transportation costs.

The DHS is to accept and approve the applications for the one-time grants and award the grants to eligible child care or family day care providers.

The bill also requires the: (1) Commissioner of DHS to submit an annual report to the Governor and the Legislature that includes information delineated in the bill; and (2) appropriation of funds from the General Fund and the New Jersey Economic Development Authority’s Child Care Facilities Grant Program to effectuate the purposes of the bill.