House Bill No. 6867 establishes the Universal Preschool Endowment (UPE) to provide funding for preschool programs aimed at children aged three to five, particularly those not eligible for kindergarten. The bill mandates the transfer of unappropriated surpluses from the General Fund into the UPE, allowing up to $300 million for the fiscal year ending June 30, 2025, and the entire surplus in subsequent years, unless the Budget Reserve Fund falls below a specified threshold. The state treasurer will oversee the endowment, ensuring that its funds are managed separately from state property and are not subject to state claims. The bill also includes provisions that limit expenditures from the endowment to no more than 10% of its balance in any fiscal year, with a specific allowance of $30 million for FY 2026.

Furthermore, the bill modifies existing regulations regarding the investment of endowment assets, prohibiting the treasurer from requiring investments in government obligations or other funds under his administration. Instead, the endowment's assets must be continuously invested in alignment with its objectives until utilized by the Office of Early Childhood (OEC) commissioner. The legislation also ensures that the treasurer's investment practices for the endowment are subject to the same oversight as other funds managed by the treasurer, such as the Teachers’ Pension Fund. The bill is supported by related legislation aimed at enhancing early childhood care and education funding, reflecting a strong legislative commitment to improving preschool access and quality.

Statutes affected:
Governor's Bill: 3-13c
ED Joint Favorable Change of Reference: 3-13c
APP Joint Favorable: 3-13c
File No. 858: 3-13c