Bill Text: DE HB410 | 2025-2026 | 153rd General Assembly | Draft
Bill Title: An Act To Amend Title 14 Of The Delaware Code Relating To Early Childhood Education Endowment.
Sponsorship: Partisan Bill (Democrat 12)
Status: (Introduced) 2026-06-04 - Introduced and Assigned to Administration Committee in House [HB410 Detail]
Download: Delaware-2025-HB410-Draft.html
|
SPONSOR: |
Rep. Griffith & Rep. Minor-Brown & Rep. Bush & Rep. Heffernan & Sen. Poore |
|
Reps. Gorman, S. Moore, Morrison, Ortega, Osienski, Ross Levin; Sen. Hoffner |
HOUSE OF REPRESENTATIVES
153rd GENERAL ASSEMBLY
HOUSE BILL NO. 410
AN ACT TO AMEND TITLE 14 OF THE DELAWARE CODE RELATING TO EARLY CHILDHOOD EDUCATION ENDOWMENT.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 30, Title 14 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
Subchapter III. Early Childhood Education Endowment
For purposes of this subchapter, the following definitions apply:
(1) "Administrative costs" means costs relating to the following:
a. Personnel, including the salary and fringe benefits of the employees of the Department of Health and Social Services (DHSS) and the Department of Education (DOE) responsible for administering programming that utilizes funds from the endowment.
b. The stipends provided to parent and program provider members of the Interagency Resource Management Committee (IRMC) established in § 1703 of this title.
c. Data and technology, including the development and maintenance of payment or parent enrollment portals.
d. Establishing or managing memoranda of understanding between DOE, DHSS, and other state agencies related to the provision of child care.
(2) “Child care” means as defined in § 3002A of this title.
(3) "Expansion costs" means expenses for all of the following:
a. To increase early child care and education program provider payment rates.
b. To increase equitable access to and affordability of high quality early childhood education.
c. To extend the hours of operation per day or portion of the year covered.
d. To sustain services previously funded by the Early Childhood Education Endowment.
(4) “General Fund” means as defined in § 6102 of Title 29.
(5) "Programmatic costs" means costs for the following:
a. Parent and early child care and education program enrollment campaigns.
c. Needs assessment technical assistance.
d. Facilities program technical assistance.
e. Workforce recruitment and scholarships for educators in alignment with the early childhood priorities of the Early Childhood Education Endowment.
(6) “State child care subsidy program” means the program under Regulation 11000 of Title 16 of the Delaware Administrative Code.
On July 1, 2026, there is established the Early Childhood Education Endowment. The endowment will receive and hold all payments and deposits or contributions intended for the endowment, as well as gifts, bequests, and endowments; federal, state, or local grants; other funds from any public or private source; and all earnings until released in accordance with § 3023 of this title. The endowment may not receive deposits in any form other than cash.
(a) For the fiscal year ending June 30, 2026, based on an estimate prepared by the Director of the Office of Management and Budget between June 15, 2026, to June 30, 2026, inclusive, the amount of 1% of the annual corporate franchise tax under Chapter 5 of Title 8 must be transferred on or before June 30, 2026, by the State Treasurer from the General Fund to the Early Childhood Education Endowment established under § 3022 of this title.
(b) Beginning with the fiscal year ending June 30, 2027, and each fiscal year thereafter, the State Treasurer, in consultation with the Interagency Resource Management Committee (IRMC) established in § 1703 of this title, must annually authorize the release of funds from the Early Childhood Education Endowment to the Secretary of DOE in an amount not to exceed the prior fiscal year's net investment return on endowment assets, as determined by the State Treasurer. In no event may the annual release of funds exceed 7.5% of the total endowment balance as of the close of the prior fiscal year. The State Treasurer shall set the annual draw rate after reviewing investment performance, endowment growth projections, and long-term sustainability of the endowment, consistent with the fiduciary duty of the State Treasurer. The released funds must be expended by the Secretary of DOE in accordance with the provisions of this section.
(c) Upon receipt of released funds, the Secretary of DOE is authorized to expend the funds in the following manner:
(1) Up to 7% of the released funds may be expended for administrative costs.
(2) After deduction of funds under paragraph (c)(1) of this section, the remaining balance may be expended for expansion costs and programmatic costs.
(d) Any funds from the endowment that have been released by the State Treasurer to the Secretary of DOE under § 3023 of this title may not do any of the following:
(1) Supplant any other local, state, or federal funds otherwise available for early childhood care and education.
(2) Comingle with any state or federal funding received under the Child Care and Development Block Grant Act of 1990.
(3) Lapse if not expended by the Secretary of DOE at the end of the fiscal year, but must be transferred to the State Treasurer and deposited in the endowment.
(e) The Secretary of DOE may expend funds released by the State Treasurer to any early child care and education programs providing child care services or preschool programs operated by a board of education that is all of the following:
(1) Receiving financial assistance under the State child care subsidy program.
(2) Participating in the Child and Adult Care Food Program, 42 U.S.C. § 1766, as amended from time to time, unless that program has received a waiver from participation by the Secretary of DHSS or is a public school preschool program that offers free or reduced priced lunches under federal law and regulations.
(f) On and after July 1, 2028, any expansion of spaces in early child care and education programs paid for with funds from the Early Childhood Education Endowment must be for at least 35% infant and toddler spaces.
§ 3024. Interagency Resource Management Committee duties.
(a) The Interagency Resource Management Committee (IRMC) established in § 1703 of this title is responsible for:
(1) Providing oversight of the administration of the Early Childhood Education Endowment.
(2) Ensuring that funds from the endowment are expended in accordance with § 3023 of this title.
(3) Reviewing all annual reports concerning the endowment submitted by the State Treasurer.
(4) Reviewing and assessing the outcomes related to the expenditure of funds from the endowment.
(5) Preparing and submitting reports and recommendations to the Governor, the Director and Librarian of the Division of Legislative Services, and the Secretary of the Senate and the Chief Clerk of the House of Representatives for distribution to all members of the General Assembly, concerning the administration of the endowment and permissible expenditure of funds from the endowment, including recommendations for expansion of permissible expenditures of funds from the endowment.
(b) Not later than June 30, 2027, and on or before June 30 of each year thereafter, the State Treasurer must submit to the IRMC, the Governor, the Director and Librarian of the Division of Legislative Services, and the Secretary of the Senate and the Chief Clerk of the House of Representatives for distribution to all members of the General Assembly, an annual endowment report that includes all of the following:
(1) The total market value of endowment assets as of the close of the prior fiscal year.
(2) The net investment return earned on endowment assets during the prior fiscal year.
(3) The draw rate authorized for the current fiscal year and the basis for that determination, including a comparison of the draw rate to the endowment's investment return and a projection of endowment sustainability over a rolling 10-year period.
(4) The total amount of funds released to the Secretary of DOE during the prior fiscal year and the purposes for which such funds were expended.
(5) Any recommended adjustments to the draw rate for the ensuing fiscal year.
(c) Funding must be allocated to align with existing programming supporting access to early care and education, including the Early Childhood Assistance Program (ECAP) and Purchase of Care Program.
(a) Not later than January 1, 2033, and every 5 years thereafter, the Secretary of DOE must prepare an impact analysis concerning the operations of the Early Childhood Education Endowment and the effect that the expenditure of funds from the endowment have had on the availability, affordability, and quality of early child care in the State. The impact analysis must include the following:
(1) A report on the solvency of the endowment prepared by the State Treasurer.
(2) An analysis of the effect that the expenditure of funds from the endowment has had on the following:
a. Early child care and education programs receiving financial assistance under the State child care subsidy program.
b. Early child care and education programs that are not receiving state financial assista nce.
c. Access of families to early child care and education programs receiving state financial assistance under the State child care subsidy program.
(3) Tuition and family contribution rates.
(4) Early childhood educator salaries and benefits.
(5) The state-wide demand for child care.
(b) The Secretary of DOE must submit the impact analysis to the IRMC and to the Governor, the Director and Librarian of the Division of Legislative Services, and the Secretary of the Senate and the Chief Clerk of the House of Representatives for distribution to all members of the General Assembly.
§ 3026. Expansion of permissible expenditures.
Upon receipt and review of the impact analysis prepared by the Secretary of DOE under § 3025 of this title, and following consultation with the State Treasurer regarding the solvency of the Early Childhood Education Endowment, the IRMC must develop recommendations concerning the expansion of permissible expenditures of funds from the Early Childhood Education Endowment under § 3023 of this title. Not later than July 1, 2033, the IRMC must submit the recommendations to the Governor, the Director and Librarian of the Division of Legislative Services, and the Secretary of the Senate and the Chief Clerk of the House of Representatives for distribution to all members of the General Assembly.
(a) The State Treasurer is responsible for the receipt, maintenance, investment, and release of funds from the endowment.
(b) The State Treasurer, on behalf of the Early Childhood Education Endowment and for purposes of the endowment, may:
(1) Receive and invest money in the endowment in any instruments, obligations, securities, or property in accordance with § 3028 of this title. The State Treasurer may commingle endowment assets with other funds managed by the Office of the State Treasurer for investment purposes, provided that the endowment's proportionate share of income, gains, and losses is separately accounted for on the books of the State Treasurer.
(2) Enter into 1 or more contractual agreements, including contracts for legal, accounting, custodial, advisory, management, administrative, and consulting services for the endowment, and pay for such services from the assets of the endowment .
(3) Procure insurance in connection with the endowment's property, assets, activities, or deposits to the endowment .
(4) Apply for, accept, and expend gifts, grants, or donations from public or private sources to enable the endowment to carry out its objectives .
(5) Make rules and regulations in accordance with the procedures under Chapter 101 of Title 29.
(6) Establish 1 or more funds within the endowment .
(7) Take any other action necessary to carry out the purposes of this subchapter.
(c) The State Treasurer, on behalf of the endowment and for purposes of the endowment, must enter into a memorandum of understanding with the Secretary of DHSS and the Secretary of DOE to establish information-sharing and programmatic administration practices for purposes of implementing this subchapter.
The State Treasurer must invest the amounts on deposit in the Early Childhood Education Endowment in a manner consistent with the State Treasurer's fiduciary duty, exercising the care, skill, prudence, and diligence that a prudent investor would exercise in similar circumstances, with due consideration to the long-term growth and preservation of the endowment's capital, rate of return, risk, diversification, liquidity, the projected disbursements and expenditures, and the expected payments, deposits, contributions, and gifts to be received. The State Treasurer may not require the endowment to invest directly in obligations of the State or any political subdivision of the State. The assets of the endowment must be continuously invested and reinvested in a manner consistent with the objectives of the endowment until disbursed for eligible expenditures or expended on expenses incurred by the operations of the endowment. The investment objective of the endowment is to achieve long-term returns sufficient to support sustainable annual distributions without eroding the endowment's principal over time.
SYNOPSIS
This Act establishes an Early Childhood Education Endowment. For the fiscal year ending June 30, 2026, the State Treasurer is directed to transfer 1% of the annual revenue from the Corporate Franchise Tax to initially fund the Endowment. The Endowment is invested by the State Treasurer under a fiduciary standard. Programmatic administration and disbursement of released funds is the responsibility of the Department of Education in consultation with the IRMC to oversee the operation, expansion, and disbursements of the Endowment.
Annual draw rates are capped at the prior fiscal year's net investment return on endowment assets and may not exceed 7.5% of total endowment balances in any year. The State Treasurer sets the draw rate after reviewing investment performance, endowment growth projections, and long-term sustainability. The State Treasurer may commingle endowment assets with other State Treasurer-managed investment portfolios for efficiency, provided that the endowment's proportionate share of income and gains is separately accounted for.
"Expansion costs" include expenses to increase early child care and education program provider payment rates, increase equitable access and affordability of high quality early childhood education, extend the hours of operation covered, or to sustain such services.
"Programmatic costs" include costs for parent and early child care and education enrollment campaigns, local governance partners, needs assessment technical assistance, facilities program technical assistance, and workforce recruitment and scholarships for educators.
Not later than June 30 of each year, the State Treasurer must submit to the IRMC and the General Assembly an annual endowment report including: (1) total endowment market value; (2) net investment return for the prior fiscal year; (3) the draw rate authorized for the current fiscal year and the basis for that determination, including a 10-year sustainability projection; (4) total funds released to DOE and the purposes for which such funds were expended; and (5) any recommended adjustments to the draw rate for the ensuing fiscal year.
Not later than January 1, 2033, and every 5 years thereafter, the Secretary of DOE must prepare an impact analysis concerning the operations of the Early Childhood Education Endowment and the effect that the expenditure of funds from the endowment has had on the availability, affordability, and quality of early child care in the State.
