Background: Department of Commerce. The Department of Commerce (COM) administers programs intended to promote community and economic development. For example, 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. The Department of Early Learning (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 and WCCC providers 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. The Community Development Financial Institutions Fund (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. Many CDFI fund-certified organizations offer financing with terms more favorable than financing available through traditional lenders.

Housing Trust Fund. The Housing Trust Fund (HTF) is administered by the COM and provides funding to help low-income households meet basic housing needs. Assistance from the HTF is distributed through a competitive grant process to eligible organizations for projects serving individuals and families with special needs or incomes below 80 percent of the area median income.

Summary of Bill: Early Learning Facilities Grants and Loans. The Early Learning Facilities Revolving Account (ELFRA) and the Early Learning Facilities Development Account (ELFDA) are established in the state treasury and are overseen by the COM. The Early Learning Facilities Grant and Loan Program (ELFGLP) is created and is administered by COM.

The ELFRA may receive revenues from appropriations, grant and loan repayments, taxable bond proceeds, and any other source. The ELFDA may receive revenues from tax-exempt bond proceeds. Expenditures from both accounts are subject to appropriation and allotment provisions.

Funds from ELFRA and ELFDA must be distributed through the ELFGLP 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 ECEAP and WCCC.

State funds for construction, purchase, or renovation may not be committed until private or public match funds are secured. Match funds may consist of cash, equipment, buildings, or like-kind. 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 must be repaid.

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:

add ECEAP slots in areas with the highest unmet need;
benefit low-income children;
are located in low-income neighborhoods;
provide more access to ECEAP as a ratio of children eligible to participate;
are geographically disbursed relative to statewide need;
include new or renovated kitchen facilities equipped to support the use of from scratch, modified scratch, or other cooking methods to enhance student nutrition;
balance mixed-use development and rural locations; and
maximize resources available from the state with funding from other public and private organizations, including the use of state lands or facilities.

Early Learning Facilities Grants and Loan Program for 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 or ELFDA 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.

An eligible organization may apply for a grant or loan without the involvement of a non-governmental private-public partnership certified by the CDFI if such an entity is not reasonably available to the location of the proposed facility or if the applicant has sufficient capacity to proceed with the project without the involvement of such an entity.

The term "eligible organizations" include ECEAP and WCCC providers who are eligible to receive state subsidies, licensed early learning centers not currently participating in ECEAP but intending to participate, developers of housing and community facilities, community and technical colleges, educational service districts, local governments, federally recognized tribes, and religiously affiliated entities.

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

$10,000 for facility predesign and feasibility planning;
$100,000 for minor renovation or repairs; and
$800,000 to create, purchase, or expand early learning facilities.

Early Learning Facilities Grant and Loan Program for School Districts. Beginning August 1, 2017, the COM must consult with the Office of the Superintendent of Public Instruction to implement and administer early learning grants and loans 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 December 15, 2017, and by September 15th of each subsequent even-numbered year.

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. The DEL must create a process by which projects receiving grants or loans from the ELFRA or ELFDA can be preapproved under existing licensing standards related to facility requirements. Licensing standards accepted in the pre-approval are the licensing standards that must be met upon project completion.

Housing Trust Fund. When selecting projects to receive funding from the HTF, the COM must give preference for projects that include an early learning facility.

Other. In collaboration with the DEL, the COM must report to the Governor and the Legislature by December 1st of every even-numbered year that follows a biennium in which funding was provided for the ELFGLP. The report must provide an update on the status of ELFGLP and must include the total amount of funds contracted and a list of projects that were awarded funds.

The COM must adopt rules to implement the ELFGLP.