1. There is hereby created in the state treasury the “Early Childhood Development, Education and Care Fund” which is created to give parents meaningful choices and assistance in choosing the child-care and education arrangements that are appropriate for their family. All interest received on the fund shall be credited to the fund. Notwithstanding the provisions of section 33.080, moneys in the fund at the end of any biennium shall not be transferred to the credit of the general revenue fund. Any moneys deposited in such fund shall be used to support programs that prepare children prior to the age in which they are eligible to enroll in kindergarten under section 160.053 to enter school ready to learn. All moneys deposited in the early childhood development, education and care fund shall be annually appropriated for voluntary early childhood development, education and care programs serving children in every region of the state not yet enrolled in kindergarten. For fiscal year 2013 and each subsequent fiscal year, at least thirty-five million dollars of the funds received from the master settlement agreement, as defined in section 196.1000, shall be deposited in the early childhood development, education and care fund.

2. No less than sixty percent of moneys deposited in the early childhood development, education and care fund shall be appropriated as provided in this subsection to the department of elementary and secondary education and to the department of social services to provide early childhood development, education and care programs through competitive grants to, or contracts with, governmental or private agencies. Eighty percent of such moneys under the provisions of this subsection and additional moneys as appropriated by the general assembly shall be appropriated to the department of elementary and secondary education and twenty percent of such moneys under the provisions of this subsection shall be appropriated to the department of social services. The departments shall provide public notice and information about the grant process to potential applicants:

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(1) Grants or contracts may be provided for:

(a) Start-up funds for necessary materials, supplies, equipment and facilities; and

(b) Ongoing costs associated with the implementation of a sliding parental fee schedule based on income;

(2) Grant and contract applications shall, at a minimum, include:

(a) A funding plan which demonstrates funding from a variety of sources including parental fees;

(b) A child development, education and care plan that is appropriate to meet the needs of children;

(c) The identity of any partner agencies or contractual service providers;

(d) Documentation of community input into program development;

(e) Demonstration of financial and programmatic accountability on an annual basis;

(f) Commitment to state licensure within one year of the initial grant, if funding comes from the appropriation to the department of elementary and secondary education and commitment to compliance with the requirements of the department of social services, if funding comes from the department of social services; and

(g) With respect to applications by public schools, the establishment of a parent advisory committee within each public school program;

(3) In awarding grants and contracts under this subdivision, the departments may give preference to programs which:

(a) Are new or expanding programs which increase capacity;

(b) Target geographic areas of high need, namely where the ratio of program slots to children under the age of six in the area is less than the same ratio statewide;

(c) Are programs designed for special needs children;

(d) Are programs that offer services during nontraditional hours and weekends; or

(e) Are programs that serve a high concentration of low-income families.

3. No less than ten percent of moneys deposited in the early childhood development, education and care fund shall be appropriated to the department of social services to provide early childhood development, education and care programs through child development, education and care certificates to families whose income does not exceed one hundred eighty-five percent of the federal poverty level in the manner pursuant to 42 U.S.C. § 9858c(c)(2)(A) and 42 U.S.C. § 9858n(2) for the purpose of funding early childhood development, education and care programs as approved by the department of social services. At a minimum, the certificate shall be of a value per child which is commensurate with the per-child payment under paragraph (b) of subdivision (1) of subsection 2 of this section pertaining to the grants or contracts. On February first of each year the department shall certify the total amount of child development, education and care certificates applied for and the unused balance of the funds shall be released to be used for supplementing the competitive grants and contracts program authorized under subsection 2 of this section.

4. No less than ten percent of moneys deposited in the early childhood development, education and care fund shall be appropriated to the department of social services to increase reimbursements to child-care facilities for low-income children that are accredited by a recognized, early childhood accrediting organization.

5. No less than ten percent of the funds deposited in the early childhood development, education and care fund shall be appropriated to the department of social services to provide assistance to eligible parents whose family income does not exceed one hundred eighty-five percent of the federal poverty level who wish to care for their children under three years of age in the home, to enable such parent to take advantage of early childhood development, education and care programs for such parent’s child or children. At a minimum, the certificate shall be of a value per child which is commensurate with the per-child payment under paragraph (b) of subdivision (1) of subsection 2 of this section pertaining to the grants or contracts. The department of social services shall provide assistance to these parents in the effective use of early childhood development, education and care tools and methods.

6. In setting the value of parental certificates under subsection 3 of this section and payments under subsection 5 of this section, the department of social services may increase the value based on the following:

(1) The adult caretaker of the children successfully participates in the parents as teachers program under the provisions of sections 178.691 to 178.699, a training program provided by the department on early childhood development, education and care, the home-based Head Start program as defined in 42 U.S.C. § 9832 or a similar program approved by the department;

(2) The adult caretaker consents to and clears a child abuse or neglect screening; and

(3) The degree of economic need of the family.

7. The department of elementary and secondary education and the department of social services each shall by rule promulgated under chapter 536 establish guidelines for the implementation of the early childhood development, education and care programs as provided in subsections 2 to 6 of this section.

8. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2010, shall be invalid and void.