Bill Text: NJ A1634 | 2012-2013 | Regular Session | Introduced
Bill Title: Establishes five-year tax credit program to support expansion of preschool in school districts.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2012-01-10 - Introduced, Referred to Assembly Education Committee [A1634 Detail]
Download: New_Jersey-2012-A1634-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Assemblyman ALBERT COUTINHO
District 29 (Essex)
Assemblywoman L. GRACE SPENCER
District 29 (Essex)
Assemblywoman CLEOPATRA G. TUCKER
District 28 (Essex)
SYNOPSIS
Establishes five-year tax credit program to support expansion of preschool in school districts.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act establishing a corporate tax credit to provide for preschool expansion and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and chapter 7F of Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Preschool for All Act."
2. The Legislature finds and declares that:
a. Since 1999, the State of New Jersey has provided three- and four-year old children residing in poorer urban districts the opportunity to attend well planned, high quality preschool programs operated by school districts, community providers, and federal Head Start programs, commonly referred to as the Abbott preschool program;
b. Research conducted by the National Institute for Early Education Research has demonstrated that children who attended an Abbott preschool program for two years were better prepared academically upon entering kindergarten than their counterparts who did not attend such a program. The research further showed that the academic benefits persist through the second grade;
c. Because of its documented benefits and success, the Abbott preschool program is nationally recognized as one of the most effective early education programs in the nation;
d. In recognition of the critical importance of ensuring access to quality preschool education, the "School Funding Reform Act of 2008" (SFRA) P.L.2007, c.260 (C.18A:7F-43 et al.), provided for the phased expansion of the Abbott preschool program, to other high needs school districts and to all at-risk children throughout the State, with the implementation to begin in the 2009-2010 school year and full implementation being achieved by the 2013-2014 school year;
e. Due to the shortfall in State revenues, the Appropriations Act for the 2009-2010 fiscal year did not provide the State aid necessary for districts to begin to offer expanded preschool opportunities to children residing in these other communities, as required by the SFRA; and
f. Given the well established, research proven benefits of investing in high quality preschool education, it is imperative for the State to follow through with the commitment in the SFRA to expand such programs to all high needs communities and at-risk children with who do not reside in a community where the Abbott preschool program is currently available.
3. a. Beginning in the first State fiscal year following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Director of the Division of Taxation in the Department of the Treasury shall establish a five-year program to provide tax credits to corporations which contribute funding to begin the expansion of full-day preschool programs for all three- and four-year old children residing in districts with a high concentration of at-risk pupils and to all at-risk three- and four-year olds in other districts, pursuant to the provisions section 12 of P.L.2007, c.260 (C.18A:7F-54).
b. Subject to the restrictions established pursuant to subsection d. of this section, a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, in an amount equal to 100% of the contributions made by the taxpayer to the Preschool For All Fund during the privilege period; provided that the taxpayer shall designate at the time the contribution is made that the contribution is made pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The order of priority of the credit allowed under P.L. ,c. (C. ) (pending before the Legislature as this bill) and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under P.L. , c. (C. ) (pending before the Legislature as this bill) against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). An unused amount of credit shall expire at the end of the privilege period.
d. In aggregate, the total tax contribution of all participating corporations shall not exceed $24,000,000 the first State fiscal year, $48,000,000 the second State fiscal year, $72,000,000 the third State fiscal year, $96,000,000 the fourth State fiscal year, and $120,000,000 the fifth State fiscal year. If the sum of the amount of tax credits authorized pursuant to this section in a State fiscal year exceeds the aggregate annual limits established pursuant to this subsection, tax credits shall be allowed in the order that contributions are made until the limit is reached.
e. As used in this section, "preschool program" means full-day preschool for all three- and four-year old pupils in district factor group A and B school districts and district factor group CD school districts with a concentration of at-risk pupils equal to or greater than 40% and for at-risk three- and four-year old pupils in all other districts. A preschool program shall meet the quality standards established by the Commissioner of Education pursuant to section 12 of P.L.2007, c.260 (C.18A:7F-54).
4. a. There is hereby established in the Department of Education a separate fund entitled the "Preschool For All Fund." The fund shall be maintained separate and apart from any other funds. The fund shall be credited with contributions made by taxpayers pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill). All interest or other income or earnings derived from the investment or reinvestment of moneys in the fund shall be credited to the fund. The moneys in the fund are specifically dedicated to provide aid to certain districts which are required to provide a preschool program pursuant to the provisions section 12 of P.L.2007, c.260 (C.18A:7F-54).
b. As used in this act, "preschool program" means full-day preschool for all three- and four-year old pupils in district factor group A and B school districts and district factor group CD school districts with a concentration of at-risk pupils equal to or greater than 40% and for at-risk three- and four-year old pupils in all other districts. A preschool program shall meet the quality standards established by the Commissioner of Education pursuant to section 12 of P.L.2007, c.260 (C.18A:7F-54).
5. a. The Commissioner of Education shall establish a competitive Preschool For All Grant Program to provide eligible school districts with funding to create or expand full-day preschool programs for three- and four-year old children residing in the district. A district which is required to provide preschool pursuant to section 12 of P.L.2007, c.260 (C.18A:7F-54), other than a district which received preschool education aid in the 2008-2009 school year pursuant to the provisions of paragraph (1) of subsection a. or paragraph (4) of subsection c. of section 12 of P.L.2007, c.260 (C.18A:7F-54), shall be eligible to receive a grant.
b. In the first year of the program, the commissioner shall develop an application process to determine which eligible districts will receive a grant. The application shall include, but not be limited to, the following information:
(1) an estimate of the number of eligible three- and four-year old children, other than preschool disabled children, residing in the district;
(2) an estimate of the number of children, other than preschool disabled children, who will be served in the district's preschool program in each year of the five-year program in an in-district preschool program, a program operated by a licensed child care provider, or a Head Start Program; and
(3) a projected budget that does not exceed the estimated number of children to be served in an in-district preschool program, a program operated by a licensed child care provider, or a Head Start Program multiplied by the corresponding per pupil amount established pursuant to the provisions of subsection d. of section 12 of P.L.2007, c.260 (C.18A:7F-54).
c. The commissioner shall award a grant to an eligible district based on the district's demonstrated capacity to achieve full implementation of the preschool program, as defined pursuant to subsection b. of section 12 of P.L.2007, c.260 (C.18A:7F-54), by the fifth year of the program. A district grant award shall be calculated based on the projected enrollment, as approved by the commissioner, the provider of the preschool program, and the per pupil preschool education aid amounts established pursuant to subsection d. of section 12 of P.L.2007, c.260 (C.18A:7F-54). A district that is awarded a grant in the first year of the preschool education grant program shall continue to receive a grant in each subsequent year of the program.
d. Notwithstanding the provisions of section 12 of P.L.2007, c.260 (C.18A:7F-54), a district which receives a grant pursuant to this section shall not receive preschool education aid.
6. The State Board of Education shall adopt regulations in accordance with the provisions of the "Administrative Procedures Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to implement the provisions of sections 4 and 5 of this act.
7. This act shall take effect immediately.
STATEMENT
This bill establishes a competitive grant program to provide for the expansion of full-day preschool programs for three- and four-year old children. Under the provisions of the "School Funding Reform Act of 2008" (SFRA), P.L.2007, c.260, districts classified in District Factor Groups (DFG) A and B, and districts classified in DFG CD having a low-income concentration of 40 percent or more, were required to begin offering preschool opportunities to all three- and four-year old resident children and to have the program fully implemented by the 2013-2014 school year. This is referred to as universal preschool. All other school districts would be required to offer similar preschool opportunities to their low-income three- and four-year old children. However, State appropriations were not available to fund the required expansion and the preschool opportunities were not extended to these children.
Under the bill, in the first year of the program, school districts that were required to provide preschool opportunities would be allowed to apply for a Preschool For All Grant; districts receiving a grant in the first year would continue to receive funding in subsequent years. The commissioner would select grant recipients based on the districts' demonstrated ability to fully implement its preschool program, defined in SFRA as serving 90 percent of eligible children, within the five years of the program.
The grants will be funded through a program that will provide a tax credit to corporations making contributions to the Preschool For All Fund. Under the program, a tax credit will be equal to 100% of the contribution a corporation makes to the fund. While there is no limit on the amount that can be contributed for credit, a corporation may not apply the credits to reduce its tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162; and the total tax credit of all participating corporations is capped at $24,000,000 the first State fiscal year, $48,000,000 the second State fiscal year, $72,000,000 the third State fiscal year, $96,000,000 the fourth State fiscal year, and $120,000,000 the fifth State fiscal year. If the sum of the amount of tax credits authorized in a State fiscal year exceeds the aggregate annual limits, tax credits will be allowed in the order that contributions are made until the limit is reached.
