(c) The department shall maintain a formula for distributing operational grants to early education and care providers, which shall give preference to providers that serve:

1. (i) high numbers of children receiving child care financial assistance or services from head start and early head start programs;

2. (ii) high numbers of high needs children; and (iii) unique populations or that otherwise advance the interests of the program as determined by the department. The formula shall consider:

   1. (i) licensed capacity and enrollment including the ages of the children enrolled and the ages of the children for whom the provider has capacity; provided, however, that enrollment shall be measured by the department using quarterly enrollment averages or if deemed appropriate by the department, enrollment averages less frequent than quarterly;
   2. (ii) costs associated with employee compensation, including salaries and benefits;
   3. (iii) the number of enrolled children receiving child care financial assistance, services from head start and early head start programs or scholarship assistance or other meaningful financial assistance from an early education and care provider;
   4. (iv) to the extent feasible, the demographics and income of families served, including the number of children enrolled and identified as high needs;
   5. (v) the cost of goods and services necessary for provider operations, including rent, utilities, maintenance and facility improvements;
   6. (vi) the cost of quality care methodology developed by the department and, until such time as the methodology is established, any available information regarding the cost of quality early education and care, including available credentialing frameworks and applicable salary guidelines;
   7. (vii) increasing the financial stability of providers in need;

   8. (viii) the business structure of providers; and (ix) any other factors impacting the cost of providing quality early education and care including, but not limited to, serving infants and toddlers, providing nonstandard hours of care and providing care in socially and economically disadvantaged and historically underrepresented communities with shortages of early education and care slots. A provider that is not an ''eligible organization'' as defined in section 18 and that, directly or through an affiliate, operates more than 10 center-based programs in the commonwealth shall not receive more than 1 per cent of annual program funds unless the provider is granted a waiver by the commissioner deeming such allocation of more than 1 per cent to be in the best interest of the commonwealth. The department shall incorporate geographic equity into the development of the distribution formula.

      Annually, the department shall review and update the operational grant formula to ensure equity and effectiveness in the financial sustainability of early education and care providers. Prior to the establishment or a revision of the operation grant formula, the department shall conduct a public hearing under chapter 30A and submit the proposed updates to the board for its approval.

      [Subsection (c1/2) effective until June 30, 2029. Repealed by 2024, 140, Sec. 261. See 2024, 140, Sec. 262.]