Regular Session 2023-2024 House Bill 0975 P.N. 0995

PRINTER'S NO. 995

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

975

Session of

2023

INTRODUCED BY HANBIDGE, CEPHAS, PROBST, HILL-EVANS, D. WILLIAMS,

ROZZI, MADDEN, SANCHEZ, KINKEAD, N. NELSON, HOWARD, CERRATO,

GREEN AND O'MARA, APRIL 24, 2023

REFERRED TO COMMITTEE ON FINANCE, APRIL 24, 2023

AN ACT

Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An

act to consolidate, editorially revise, and codify the public

welfare laws of the Commonwealth," providing for employee

child-care public private partnership; establishing the

Employee Child-Care Public Private Partnership Fund and the

employee child-care public private partnership tax credit;

imposing duties on the Department of Human Services; and

imposing a penalty.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of June 13, 1967 (P.L.31, No.21), known

as the Human Services Code, is amended by adding an article to

read:

ARTICLE VII-A

EMPLOYEE CHILD-CARE PUBLIC PRIVATE PARTNERSHIP

Section 701-A. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Child-care provider." Includes:

(1) A child-care center as defined under 55 Pa. Code §

3270.4 (relating to definitions).

(2) A group child-care home as defined under 55 Pa. Code

§ 3280.4 (relating to definitions).

(3) A family child-care home as defined under 55 Pa.

Code § 3290.4 (relating to definitions).

"Contribution." A direct payment to a child-care provider

either directly by an employer or through a third-party vendor

to subsidize an employee's eligible child-care costs.

"Eligible child-care costs." Costs incurred by an individual

for services rendered by a child-care provider.

"Employee." An individual employed by an employer and whose

job is located within this Commonwealth.

"Employer." A nonprofit or for-profit entity with at least

one employee who employs employees in at least 20 calendar weeks

in the current or preceding calendar year.

"Fund." The Employee Child-Care Public Private Partnership

Fund established under section 705-A.

"Local business." A business with fewer than 50 employees

who are individually contracted to work more than 35 hours per

week.

"Match." Money paid directly to a child-care provider by the

department from the fund.

"Partnership." The Employee Child-Care Public Private

Partnership.

"State median household income." The most recent estimate

available of real median household income for this Commonwealth,

as determined by the United States Census Bureau and adjusted

for family size.

Section 702-A. Employee Child-Care Public Private Partnership.

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(a) Establishment.--The Employee Child-Care Public Private

Partnership is established within the department.

(b) Duties of the department.--

(1) To administer the partnership, the department may:

(i) Coordinate and share information with other

executive branch agencies and departments.

(ii) Enter into contracts with third parties to

administer the partnership or specific parts of the

partnership in accordance with applicable Federal and

State procurement laws.

(2) The department shall:

(i) Create and publish a standardized contract for

participation in the partnership.

(ii) Review and process a contract between an

employer, employee and a child-care provider that is

submitted to the department.

(iii) Notify parties of a contract of the parties'

enrollment status in the partnership.

(iv) Manage and administer the fund.

(v) Verify the eligibility of an employee, employer

or child-care provider as parties to a contract for

participation in the partnership prior to disbursement of

a match.

(vi) Collect and verify household income information

from eligible employees and determine the amount of match

for which a party to a contract is eligible.

(vii) Distribute educational materials about the

partnership's objectives, benefits and eligibility

requirements to employers, employees and child-care

providers.

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may elect to participate in the partnership established under

this section. To participate in the partnership, an employer

must enter into a standardized contract created by the

department with both an employee and a child-care provider.

Section 703-A. Employer and employee obligations.

(a) Employer duties.--To participate in the partnership, an

employer must:

(1) Submit a completed standardized contract to the

department for review.

(2) Submit additional information as deemed necessary by

the department.

(3) Make a contribution to an employee's eligible child-

care costs by submitting payment for child-care services

directly to the employee's child-care provider or through a

third-party vendor in accordance with the contract.

(b) Employee costs.--If an employer's payment under a

contract and the department's match do not completely cover the

cost of child-care services, an employee shall be responsible

for the balance. A member of the employee's household or family

may become a party to a contract to pay for an employee's

balance of child-care services.

Section 704-A. Administration.

(a) Contract review.--After submission of a completed

contract, the department, within 20 business days, shall review

the contract. If the employee, employer and proposed child-care

provider meet partnership eligibility requirements as

established by regulation , the department shall become a party

to the contract in accordance with subsection (b) and agree to

distribute a match that is equal to the contribution made by the

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employer of up to 100% of an employee's cost of child-care

services. The match payment shall be paid from money in the

fund.

(b) Department as a party to a contract.--

(1) The department shall become a party to a proposed

contract under this section if the fund reflects a positive

balance based on both:

(i) The department's existing contractual

obligations already accrued under this article.

(ii) The department's additional financial

obligation imposed by the proposed contract.

(2) The department may not become a party to a proposed

contract if the corresponding financial obligation would

cause the fund to accrue a negative balance.

list of contracts submitted after available money was committed.

The department shall become a party to a proposed contract from

the waiting list as new money becomes available, and according

to the order in which the contract was received.

(d) Match.--The department shall issue a match directly to a

child-care provider or through a third-party vendor for the

duration of the contract.

(e) Disclosure of personal information.--The department may

not disclose an employee's personal information without that

individual's express written consent.

(f) Timing.--

(1) When the fund has a positive balance, the department

shall:

(i) Promulgate regulations to administer the

partnership.

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(ii) Solicit third-party vendor contracts, if deemed

necessary.

(2) The department may begin to accept proposed

contracts under this article on April 1, 2025.

(3) The department may not disperse matches from the

fund for the next year prior to July 1 of each year.

(4) The department shall accept proposed contracts for

each fiscal year after the initial year of matches:

(i) starting April 1 for employers with existing

approved contracts pursuant to the partnership; or

(ii) starting May 15 for all other employers.

(g) Reports.--

(1) Twice a year, beginning July 15, 2025, and each July

15 and December 15 thereafter, the department shall publish a

report detailing the efficacy of the partnership and submit

the report to the chairperson and minority chairperson of the

Aging and Youth Committee of the Senate, the chairperson and

minority chairperson of the Children and Youth Committee of

the House of Representatives, the chairperson and minority

chairperson of the Health and Human Services Committee of the

Senate and the chairperson and minority chairperson of the

Human Services Committee of the House of Representatives. The

report shall include:

(i) Appropriations made in the past fiscal year to

the fund.

(ii) The total number of standardized contracts

submitted by employers.

(iii) The total amount of matches paid out of the

fund by the department.

(iv) A breakdown by county of the matches paid.

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(v) Information on the size, geographical location

and industry type of employers who participated in the

partnership.

(vi) The number, license type, quality rating and

geographical distribution of participating child-care

providers.

(vii) The average cost for services charged by

child-care providers participating in the partnership and

information on how these costs have increased or

decreased during the most recent reporting period and

previous reporting periods.

(viii) The number and total dollar value of

contracts not approved by the department.

(ix) The demographic information of employees

participating in the partnership.

(2) Before February 1, 2025 , the department shall

publish a report detailing implementation plans for the

partnership and submit the report to the chairperson and

minority chairperson of the Health and Human Services

Committee of the Senate and the chairperson and minority

chairperson of the Human Services Committee of the House of

Representatives.

(h) Regulations.--The department shall promulgate

regulations to administer the partnership, including:

(1) Creating a standardized agreement for employers,

employees and child-care providers that wish to participate

in the partnership that includes:

(i) The name, address, physical location, size,

industry and point of contact for an employer.

(ii) The name, address, physical location and point

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of contact for a child-care provider.

(iii) The name and home address of the employee.

(iv) The total contribution to be paid by the

employer to the child-care provider, either directly or

through a third-party vendor.

(v) The total amount of the match to be paid to the

child-care provider, either directly or through a third-

party vendor.

(vi) The duration of the contract, which shall not

extend past June 30 each year.

(vii) Frequency of contributions to be made directly

to the child-care provider in accordance with the child-

care provider's established billing cycle.

(viii) Demographic information of the employee.

(2) Establishing eligibility verification procedures for

the parties of the contract as a prerequisite for the

partnership and the issuance of a match.

(3) Collecting and verifying household income

information from eligible employees and determining the

amount of the match that the employee is eligible to receive

in accordance with section 706-A.

(4) Creating procedures for issuing a notice to all

parties to a contract of enrollment in the partnership upon

receiving and processing the contract and determining

eligibility.

(5) Compiling confidentiality protocols for the

department to safeguard the personal information of

participating employees, employers and child-care providers.

(6) Reporting requirements for an employee or a child-

care provider to report a lapse or nonpayment of a

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contribution.

(7) Creating procedures for issuing and logging a match

to child-care providers under the partnership.

(8) Maintaining records of the fund and payments made

from the fund.

(9) Creating criteria for participant disqualification

from the partnership.

(10) Establishing procedures for appeal hearings.

(11) Establishing procedures for recouping matches or

portions of matches that result in overpayments to

participating child-care providers.

Section 705-A. Employee Child-Care Public Private Partnership

Fund.

(a) Establishment.--The Employee Child-Care Public Private

Partnership Fund is established in the State Treasury. The fund

shall consist of money appropriated by the General Assembly,

contributions, gifts or grants made available for the

partnership.

(b) Administration.--The fund shall be administered by the

department.

shall become a part of the fund.

(d) Use of money.--Money deposited into the fund shall be

used for the partnership established under this article and

shall not be appropriated or transferred by the General Assembly

for another purpose.

(e) Issuance of matches.--The department shall issue matches

from the money deposited into the fund in accordance with

section 706-A.

(f) Local business agreements.--In each fiscal year, at

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least 25% of the money in the fund shall be distributed to

contracts entered into with a local business.

(g) Administration fee.--In fiscal year 2024-2025, up to 5%

of the money in the fund may be used by the department to

administer the partnership. In every fiscal year thereafter, up

to 3% of the money in the fund may be used by the department to

administer the partnership.

Section 706-A. Match payments.

(a) Criteria.--Matches shall meet the following criteria:

(1) A match shall not exceed 100% of the contribution

made by the employer for contracts in which the employee's

household income is equal to or less than 100% of the State

median household income.

(2) A match shall decrease by 10% for each 20% increase

in household income over 100% of the State median household

income and up to 180% of the State median household income.

(3) A match shall equal 50% for contracts in which the

employee's household income exceeds 180% of the State median

household income.

(b) Not considered compensation.--A match issued under this

article shall not be considered taxable income for the employee

under the act of March 4, 1971 (P.L.6, No.2), known as the Tax

Reform Code of 1971.

Section 707-A. Termination of contracts.

(a) Automatic termination.--Termination of a contract

between an employer, employee, child-care provider and the

department shall occur, if:

(1) The relationship between the employee and employer

is severed. The employer shall notify the child-care provider

and the department within three business days of the

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separation and the contract shall be terminated on the

calendar date provided by the employer in the notification.

If the employer fails to make this notification and the

department issues a match to the child-care provider on

behalf of that employer's employee, the employer shall

reimburse the department for the unnecessary match.

(2) The employer fails to make a contribution for the

eligible child-care costs in accordance with the terms of the

contract. The child-care provider shall notify the department

within five business days of the failure. After receiving

notification from the child-care provider, the department

shall temporarily cease providing a match and shall notify

the employer that the contract will be terminated unless the

employer remedies the nonpayment within five business days of

receiving notification from the department. If the provider

fails to make this notification and receives a match from the

department on behalf of that employer's employee, the child-

care provider shall reimburse the department for the

unnecessary match.

(b) Optional termination.--Termination of an active contract

between an employer, employee, child-care provider and the

department may occur, if:

(1) The employee fails to pay the child-care provider

for costs not covered by the employer contribution and the

match in accordance to the terms of the contract. The child-

care provider may give the employee reasonable time to remedy

the nonpayment. The child-care provider may notify the

department and terminate the contract on the date that the

notification was issued. If the child-care provider

voluntarily excuses the employee's nonpayment or the child-

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care provider does not notify the department within two

calendar months from the date of the employee's nonpayment

and continues to provide services, the contract made between

all the parties shall reflect the reduction in value.

(2) The child-care provider ceases participation or

otherwise loses the child-care provider's rating in the

Keystone STARS system. The child-care provider shall notify

all parties to the agreement immediately.

employee may terminate the contract at any time and for any

reason. The terminating party shall notify all parties to the

contract and specify the desired termination date, which shall

occur no sooner than two weeks from the date of notification

unless the child-care provider gives consent to an earlier

termination date. All parties to the contract shall be

financially obligated, according to the provisions of the

contract, up to the termination date.

Section 708-A. Employee child-care public private partnership

tax credit.

An employer who participates in the partnership is eligible

for a tax credit according to the following guidelines:

(1) If an employer is an individual, the credit is

available for the amount of the aggregate sum of the

employer's total contributions for all employees for up to

15% of the individual's tax obligation in a given taxable

year against the tax imposed under Article III of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971.

(2) If the employer is organized as a partnership or an

unincorporated association, the credit is available on a pro

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rata basis for each partner or member for the amount of the

aggregate sum of the employer's total contributions for all

employees for up to 15% of the employer's tax obligation in a

given taxable year against the tax imposed under Article III

of the Tax Reform Code of 1971.

(3) If the employer is a corporation, the credit is

available for the amount of the aggregate sum of the

employer's total contributions for all employees for up to

15% of the employer's tax obligation in a given taxable year

against the tax imposed under Article IV of the Tax Reform

Code of 1971.

Section 709-A. Penalties.

A person who intentionally registers false information under

this article with the department for benefits shall be subject

to a civil penalty of no more than $500 per violation. All money

collected as a result of penalties assessed under this article

shall be deposited into the fund.

Section 2. This act shall take effect immediately.

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