Amends TCA Title 4; Title 50 and Title 56.

This bill establishes a public and private partnership pilot program under the department of labor and workforce development. In order to administer the program, this bill authorizes the department to delegate authority to a subsidiary department; coordinate and share information with other executive branch agencies; and enter into contracts with third parties to administer the program or specific parts of the program. DEPARTMENT DUTIES This bill requires the department to do the following: (1) Create and make available a standardized contract for participation in the program; (2) Process the contract between an employer, employee, and childcare provider that is submitted to the department; (3) Notify the parties of their enrollment status in the program; (4) Manage and administer the program funds; (5) Secure third-party vendors in accordance with all applicable federal and state procurement regulations, if deemed necessary; (6) Verify the eligibility of the respective employee, employer, and childcare provider as parties to a contract for participation in the program prior to disbursement of a state match; (7) Collect and verify household income information from eligible employees and determine the amount of the state match for which an employee is eligible; and (8) Distribute educational materials about the program's objectives, benefits, and eligibility requirements to employers, employees, and childcare providers. EMPLOYEE CHILD CARE ASSISTANCE PARTNERSHIP FUND This bill establishes, in the general fund of the state treasury, a revolving account to be known as the Employee Child Care Assistance Partnership fund. The fund is to consist of moneys appropriated by the general assembly, contributions, gifts, or grants made available for the purpose of the program. It is required that the fund be administered by the department or its designee. Moneys remaining in the fund at the end of the fiscal year do not revert to the general fund but must be carried forward to the next fiscal year. All interest earnings of the fund become a part of the fund and do not revert to the general fund. The department is required to issue state matches out of the fund to childcare providers in accordance with the provisions of the respective contracts and in the order that the department processed the contracts. DEPARTMENT REVIEW The department is required to review a completed contract after it is submitted by the employer and, if the employee, employer, and the proposed childcare provider meet program eligibility requirements, and agree to match the contribution made by the employer up to 100 percent of the cost of service from the fund. The department must only become a party to a proposed contract under this program if the fund reflects a positive balance based on the department's existing contractual obligations already accrued under this program and the department's additional financial obligation imposed by the proposed contract. However, the department is prohibited from agreeing to become a party to a proposed contract under this program if the corresponding financial obligation would cause the fund to accrue a negative balance. STATE MATCH This bill requires that the state match must not exceed 100 percent of the contribution made by the employer for contracts in which the employee's household income is equal to or less than 100 percent of the state median household income. The state match must decrease by 10 percent for each 20 percent increase in household income over 100 percent of the state median household income up to 180 percent of the state median household income. The state match must equal 50 percent for contracts in which the employee's household income exceeds 180 percent of the state median household income. In each fiscal year, 25 percent of the total fund must be distributed to agreements in which an employer is a small business. In fiscal year 2023-2024, 5 percent of the total fund must be distributed to the department to administer the program. In every fiscal year thereafter, 3 percent of the total fund must be distributed to the department to administer the program. A state match issued pursuant to this program and administered by the department is for the promotion of the general welfare and is not compensation for an employee's service. The department is further required to issue a state match directly to the childcare provider or through a third-party vendor for the duration of the contract. The department must not disclose any employee's personal information without the individual's written consent. WAITLIST This bill requires the department to maintain a waitlist of contracts submitted after available funds were committed. The department must become a party to a proposed contract from the waitlist as new funds become available and according to the order in which the contracts were received. IMPLEMENTATION This bill requires that in the first fiscal year of the program, the program must be administered by the department as follows: (1) The department must begin administering the program after July 1, 2023, including promulgating rules in accordance with this bill and soliciting third-party vendor contracts, if deemed necessary; (2) The department must not begin accepting proposed contracts from employers pursuant to this program more than 30 calendar days before July 1, 2023; and (3) The department must not disperse state matches from the fund as a party to a contract with an employer, employee, and childcare provider pursuant to this program prior to July 1, 2023. Beginning in 2024, and every year after, the department must begin accepting proposed contracts from employers, employees, and providers for the next fiscal year as follows: (1) 30 calendar days before July 1st for employers with existing approved contracts pursuant to the program; and (2) 45 calendar days before July 1st for all other employers. RULEMAKING This bill requires the department to promulgate rules for the program, including rules that do the following: (1) Create a standardized agreement for employers, employees, and providers wishing to participate in the program, to be completed and agreed to by each respective party that includes specific information described in the bill; (2) Establish eligibility verification procedures for the following parties as a prerequisite for the department entering the agreement as a party and issuing a state match: the employer's enrollment in the program; the employee's eligibility; and the childcare provider's eligibility; (3) Assist with collecting and verifying household income information from eligible employees and determining the amount of the state match for which the employee is eligible; (4) Create procedures for issuing a notice to all parties to the agreement of their enrollment in the program upon receiving and processing the contract and determining eligibility; (5) Compile confidentiality protocols for the department to safeguard the personal information of participating employees, employers, and childcare providers; (6) Introduce reporting requirements for an employer or a childcare provider to report a lapse or nonpayment of contribution toward eligible childcare services; (7) Create procedures for issuing and logging a state match to childcare providers pursuant to the respective contract; (8) Maintain records of the fund in the fiscal year and all payments; (9) Create criteria for participant disqualification from the program; (10) Establish procedures for appeals hearings; and (11) Establish procedures for recouping state matches or portions of state matches that result in overpayments to participating childcare providers. EMPLOYER REQUIREMENTS This bill requires that to participate in the program, an employer must do the following: (1) Obtain the standardized contract created by the department and enter into it with the employee and childcare provider; (2) Submit the proposed contract to the department; (3) Submit all additional information as deemed necessary by the department; and (4) Make contributions to the employee's eligible childcare costs directly to the childcare provider or through a third-party vendor in accordance with the amount and frequency agreed to in the final contract. This bill provides that in the event that the agreement includes costs of service not covered by the employer's contribution and the state match, the employee must make payments to the childcare provider according to the amount and frequency determined by the final contract. If another member of the employee's household or family becomes a party to an agreement in accordance with this chapter, then the employer contribution and state match under that agreement may be utilized to pay for costs of service not covered by the employer contribution and state match of the preceding agreement; provided, that it does not result in overpayment to the provider. CONTRACT TERMINATION This bill requires that the termination of an active contract between an employer, employee, childcare provider, and the department must occur under the following circumstances: (1) If the relationship between the employee and employer is severed, the employer must notify the childcare provider and the department within three business days of the separation, and the contract is 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 state match to the provider on behalf of that employer's employee, then the employer must reimburse the department for the unnecessary state match; or (2) If the employer fails to make a contribution for the eligible childcare costs in accordance to the terms of the contract, the childcare provider must notify the department within five business days. After receiving notification from the provider, the department must temporarily cease providing a state match and must 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 state match from the department on behalf of that employer's employee, the provider must reimburse the department for the unnecessary state match. This bill authorizes termination of an active contract to occur under the following circumstances: (1) If the employee fails to pay the childcare provider for costs not covered by the employer contribution and the state match in accordance with the terms of the contract, the childcare provider may give the employee reasonable time to remedy the nonpayment. The childcare provider may notify the department and terminate the contract on the date that the notification was issued. If the childcare provider voluntarily excuses the employee's nonpayment or the childcare provider does not notify the department within two calendar months from the date of the employee's nonpayment and continues to provide services, then the contract made between all the parties will automatically reflect the reduction in value; (2) If the childcare provider ceases participation or otherwise loses its license, the provider must notify all parties to the agreement immediately; and (3) Either the employer or employee may terminate the contract at any time and for any reason. The terminating party must notify all the parties to the contract and specify the desired termination date, which must not occur sooner than two weeks from the date of notification unless the childcare provider gives its consent to an earlier termination date. All parties to the contract are financially obligated, according to the provisions of the contract, up to the termination date. COORDINATION WITH ECD This bill authorizes the department of economic and community development and labor and workforce development to coordinate with the department to incorporate this program into agreements with employers seeking economic development incentives. PENALTY FOR FALSE INFORMATION This bill establishes that a person who intentionally submits false information to the department in pursuit of benefits under this program is subject to a civil penalty of not more than $500 per violation. All money collected as the result of penalties assessed must be credited to the fund. REPORTS This bill requires that beginning in 2024 and every year after, the department must publish reports detailing the efficacy of the program by July 15th and December 15th of each year and must submit the report to the speaker of the senate and the speaker of the house of representatives.