SENATE BILL REPORT

2SHB 1777

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As of March 31, 2017

Title: An act relating to financing early learning facilities to support the needed expansion of early learning classrooms across Washington.

Brief Description: Concerning the financing of early learning facilities.

Sponsors: House Committee on Capital Budget (originally sponsored by Representatives Kagi, Johnson, Doglio, Dent, Ryu, MacEwen, Senn, Farrell, Nealey, Ortiz-Self, McBride, Macri, Fey, Slatter and Jinkins).

Brief History: Passed House: 3/08/17, 84-13.

Committee Activity: Ways & Means: 3/30/17.

Brief Summary of Bill

  • Creates the Early Learning Facilities Revolving Account (ELFRA) to provide grants and loans for the planning, renovation, purchase, and construction of early learning facilities.

  • Establishes prioritized criteria for ELFRA awards to school districts and other eligible organizations.

SENATE COMMITTEE ON WAYS & MEANS

Staff: Maria Hovde (786-7474)

Background: Department of Commerce (COM). The COM administers programs intended to promote community and economic development. For example, the COM manages the Community Development Block Grant program, which provides federal grant funds to small counties, cities and towns for public facilities, community facilities, microenterprise, and affordable housing projects.

Department of Early Learning (DEL). The DEL implements state early learning policy and oversees various programs serving young children, including the Early Childhood Education and Assistance Program (ECEAP) and the Working Connections Child Care (WCCC) program. The Early Start Act of 2015 established an entitlement for ECEAP for all eligible children starting in the 2020-21 academic year.

Licensed ECEAP providers and WCCC providers who receive state subsidy are required to participate in the DEL's Early Achievers quality rating and improvement system. Early Achievers is a common set of standards to measure and improve the quality of early learning and child care. Participants advance through program levels based on criteria including child outcomes, facility curriculum and learning environment, professional development, and family engagement and partnership.

Community Development Financial Institutions Fund (CDFI fund). The CDFI fund is a program of the United States Department of the Treasury. The CDFI fund certifies nongovernmental entities and tribal governments who operate banks, credit unions, loan funds, and venture capital funds to provide underserved communities with access to affordable financial services.

Certified organizations are eligible to apply for technical assistance, training, and financial assistance awards from the CDFI fund. Organizations must have a primary mission of promoting community development, provide both financial and educational services, and serve and maintain accountability to one or more defined target markets.

Summary of Bill: Early Learning Facilities Revolving Account (ELFRA). The ELFRA is established and is overseen by the COM. The ELFRA funds must be distributed as state grants or loans to match private and other public funding. Eligible projects include the planning, renovation, purchase, and construction of early learning facilities to provide classroom space for the ECEAP and the WCCC. The ELFRA may receive revenues from appropriations, grant and loan repayments, and any other source.

State funds may not be committed until private match funds are secured. When determining the level of required match, the COM must consider the financial needs of the applicant and the economic conditions of the location of the proposed facility.

Any recipient of a grant or loan must own or secure a long-term lease for the project site and commit to using the funded facility for preschool or childcare for 10 or 20 years, depending on the amount of funding received.

Recipients must commit to being an active participant in good standing with Early Achievers. If the recipient ceases to be in good standing with Early Achievers, the grant or loan must be repaid to the ELFRA.

Project Prioritization. The COM must convene a committee of early learning facilities experts to develop a prioritization methodology for project selection. When developing the prioritization methodology, the committee must consider projects that:

Grants and Loans to Eligible Organizations. Beginning August 1, 2017, the COM must contract with at least one nongovernmental private-public partnership certified by the CDFI fund to award funds from the ELFRA to eligible organizations. The private-public partnership must demonstrate an ability to raise funds for early learning construction projects and must report annually to the COM on projects funded through the ELFRA.

The term eligible organizations include nonprofit ECEAP and WCCC providers, licensed early learning centers not currently participating in ECEAP but intending to participate, nonprofit developers of housing and community facilities, community and technical colleges, educational service districts, local governments, and federally recognized tribes.

Eligible organizations may receive grants or loans in amounts up to:

Grants and Loans to School Districts. Beginning August 1, 2017, the COM must implement and administer grants or loans from the ELFRA to school districts. School districts may receive grants or loans in amounts up to $800,000 to purchase, construct, or expand early learning facilities.

The COM must submit a ranked and prioritized list of early learning facilities projects and proposed purchases for school districts to the Office of Financial Management and the Legislature by September 15, 2017.

Licensing Standards Review. The DEL must consult with stakeholders to review existing facility licensing standards to eliminate potential licensing barriers while ensuring the health and safety of children in early learning programs. Standards to be reviewed include, but are not limited to, plumbing, fixture, and playground equipment standards.

If funding is not appropriated by June 30, 2017, all provisions except the licensing standards review by the DEL are null and void.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: Ninety days after adjournment of session in which bill is passed. However, the bill is null and void unless funded in the budget.

Staff Summary of Public Testimony: PRO: The biggest barrier to ECEAP expansion is the lack of facilities. This bill will provide access to grants and loans and technical assistance to facilitate the expansion.

Persons Testifying: PRO: Melissa Johnson, Washington State Association of Headstart & ECEAP; Marie Sullivan, Pasco School District.

Persons Signed In To Testify But Not Testifying: No one.