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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3780 Introduced in House (IH)]

108th CONGRESS
  2d Session
                                H. R. 3780

   To improve the lives of working families by providing family and 
     medical need assistance, child care assistance, in-school and 
  afterschool assistance, family care assistance, and encouraging the 
              establishment of family-friendly workplaces.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 2004

    Ms. Woolsey (for herself, Mrs. Jones of Ohio, Ms. DeLauro, Mr. 
 Kucinich, Ms. Millender-McDonald, Mr. Serrano, Ms. Lee, Mr. Conyers, 
 Mr. Frank of Massachusetts, Mrs. Napolitano, Mr. Lampson, Mr. Towns, 
   Mr. Ballance, Ms. Corrine Brown of Florida, Mr. George Miller of 
   California, Mr. Lantos, Ms. Kilpatrick, Mr. Payne, Ms. Carson of 
Indiana, Mr. Owens, and Ms. Linda T. Sanchez of California) introduced 
 the following bill; which was referred to the Committee on Education 
     and the Workforce, and in addition to the Committees on House 
Administration, Government Reform, and Financial Services, for a period 
    to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
   To improve the lives of working families by providing family and 
     medical need assistance, child care assistance, in-school and 
  afterschool assistance, family care assistance, and encouraging the 
              establishment of family-friendly workplaces.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Family and 
Workplace Balancing Act of 2004'' or ``Balancing Act of 2004''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
   TITLE I--PAID LEAVE FOR NEW PARENTS AND FAMILY AND MEDICAL LEAVE 
                        ENHANCEMENT ACT OF 2003

                 Subtitle A--Paid Leave for New Parents

Sec. 101. Short title.
Sec. 102. Purpose.
Sec. 103. Definitions.
Sec. 104. Grants.
Sec. 105. Notification.
Sec. 106. Report.
Sec. 107. Authorization of appropriations.
Sec. 108. Technical and conforming amendments.
      Subtitle B--Family and Medical Leave Enhancement Act of 2003

Sec. 111. Short title.
Sec. 112. Additional leave for parental involvement.
Sec. 113. Parental involvement leave for civil servants.
Sec. 114. Clarification of leave entitlement.
Sec. 115. Definition of grandchild.
             TITLE II--CHILD CARE EXPANSION AND IMPROVEMENT

                  Subtitle A--Care for Young Children

Sec. 201. Expanding child care for young children.
  Subtitle B--Improving Child Care Quality Through Teacher Incentives

Sec. 221. Purpose.
Sec. 222. Definitions.
Sec. 223. Funds for child care provider development and retention 
                            grants, scholarships, and health benefits 
                            coverage.
Sec. 224. Allotments to States.
Sec. 225. Application and plan.
Sec. 226. Child care provider development and retention grant program.
Sec. 227. Child care provider scholarship program.
Sec. 228. Child care provider health benefits coverage.
Sec. 229. Annual report.
Sec. 230. Evaluation of health benefits programs by Secretary.
Sec. 231. Authorization of appropriations.
  Subtitle C--Child Care Construction and Renovation Incentive Grants

Sec. 241. Short title.
Sec. 242. Use of community development block grants to establish child 
                            care facilities.
Sec. 243. Insurance for mortgages on new and rehabilitated child care 
                            facilities.
Sec. 244. Insurance for mortgages for acquisition or refinancing debt 
                            of existing child care facilities.
Sec. 245. Study of availability of secondary markets for mortgages on 
                            child care facilities.
Sec. 246. Technical and financial assistance grants.
        Subtitle D--Business Child Care Incentive Grant Program

Sec. 251. Business child care incentive grant program.
      TITLE III--PRE-SCHOOL, IN-SCHOOL, AND AFTERSCHOOL ASSISTANCE

               Subtitle A--Universal Prekindergarten Act

Sec. 301. Short title.
Sec. 302. Findings and purpose.
Sec. 303. Prekindergarten grant program authorization.
Sec. 304. State requirements.
Sec. 305. Local requirements.
Sec. 306. Professional development set-aside.
Sec. 307. Reporting.
Sec. 308. Federal funds supplementary.
Sec. 309. Definitions.
Sec. 310. Authorization of appropriations.
          Subtitle B--Universal Free School Breakfast Program

Sec. 311. Universal free school breakfast program.
  Subtitle C--Nutritional Improvement for Children Served Under Child 
                           Nutrition Programs

Sec. 321. Nutritional improvement for children served under child 
                            nutrition programs.
             Subtitle D--Child and Adult Care Food Program

Sec. 331. Reimbursements for afterschool dinners.
Sec. 332. Eligibility of private child care centers.
           Subtitle E--Afterschool Education Enhancement Act

Sec. 341. Short title.
Sec. 342. Amendments regarding 21st century community learning centers.
             TITLE IV--IMPROVING THE WORKPLACE FOR FAMILIES

          Subtitle A--Part-Time and Temporary Workers Benefits

Sec. 401. Treatment of employees working at less than full-time under 
                            participation, vesting, and accrual rules 
                            governing pension plans.
Sec. 402. Treatment of employees working at less than full-time under 
                            group health plans.
Sec. 403. Expansion of definition of employee to include certain 
                            individuals whose services are leased or 
                            contracted for.
Sec. 404. Effective dates.
            Subtitle B--United States Business Telework Act

Sec. 411. Short title.
Sec. 412. Telework pilot program.
Sec. 413. Report to Congress.
Sec. 414. Definition.
Sec. 415. Termination.
Sec. 416. Authorization of appropriations.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Currently in two-thirds of married families with 
        children in the United States, both parents work full-time. 
        Seventy-one percent of mothers with children under age 18 work 
        full-time, and another 29 percent work part-time.
            (2) The National Study of the Changing Workforce found that 
        70 percent of employed parents indicated that they don't have 
        enough time with their children.
            (3)(A) A survey conducted by the Boys and Girls Clubs of 
        America found that more than half of the respondents indicated 
        that they had little or no time to spend in physical activities 
        with their children.
            (B) Parents in 3,500,000 households, representing 7,000,000 
        children, spend an hour or less a week doing physical 
        activities with their children.
            (C) The primary obstacle cited by the parents to engaging 
        in physical activities with their children was their work 
        schedules.
            (4) Nearly two-thirds of employees who need to take family 
        or medical leave do not take such leave because they cannot 
        afford to forgo the pay.
            (5) Nearly every industrialized nation other than the 
        United States, and most developing nations, provides parents 
        with paid leave for infant care.
            (6) In the United States, more than half of all mothers of 
        children under the age of one now work. Yet parents of infants 
        and toddlers face acute problems finding child care, and child 
        care that is available is often of mediocre quality.
            (7) The cost of child care averages $4,000 to $6,000 per 
        year in the United States, and families with younger children 
        or with more than one child face even greater costs. For 
        example, the average annual cost of child care for a 4-year-old 
        in an urban area center is more than the average annual cost of 
        public college tuition in all but one State.
            (8) The average annual child care teacher salary is 
        $15,430, a wage so low that many programs find it extremely 
        challenging to recruit fully qualified teachers and to retain 
        them. High turnover rates make it more difficult to provide 
        quality and continuity of care.
            (9) Only 12 percent of eligible children receive child care 
        assistance through the Child Care Development Block Grant, and 
        only about 3 out of 5 eligible preschoolers are able to 
        participate in the Head Start program.
            (10) Among needy students, school nutrition programs often 
        provide the primary opportunity for consumption of 
        nutritionally valuable foods.
            (11) Breakfast is a critical meal for children and provides 
        the nutrition necessary to optimize their learning capacities.
            (12) According to the Bureau of the Census, nearly 
        7,000,000 children in the United States are left alone after 
        school each week without adult supervision or structured 
        activities of any kind.
            (13) Violent juvenile crime peaks between the hours of 3:00 
        p.m. and 7:00 p.m. and teens are more likely to be victims of 
        serious violent crime in the hour after school lets out than 
        any other time of the day.
            (14) The Nation's communities can benefit from teleworking, 
        which give workers more time to spend at home with their 
        families.
            (15) Companies with telework programs have found that 
        telework can boost employee productivity 5 percent to 20 
        percent, thereby saving businesses valuable resources and time.
            (16) More United States families are working more hours 
        than ever. In 2000, the average American worker worked 36 hours 
        more, almost a full week, than in 1990. A recent AFL-CIO poll 
        found that nearly three-quarters of working adults indicated 
        that they have little or no control over their work schedules.
            (17) The AFL-CIO's ``Ask a Working Woman'' survey for 2002 
        reported that 63 percent of working women work more than 40 
        hours a week, 30 percent of working women work 20 to 39 hours a 
        week, and 7 percent of working women work less than 20 hours a 
        week.

   TITLE I--PAID LEAVE FOR NEW PARENTS AND FAMILY AND MEDICAL LEAVE 
                        ENHANCEMENT ACT OF 2003

                 Subtitle A--Paid Leave for New Parents

SEC. 101. SHORT TITLE.

    This subtitle may be cited as the ``Family Income To Respond to 
Significant Transitions Act''.

SEC. 102. PURPOSE.

    The purpose of this subtitle is to establish a program that 
supports the efforts of States and political subdivisions to provide 
partial or full wage replacement, often referred to as FIRST insurance, 
to new parents so that the new parents are able to spend time with a 
new infant or newly adopted child, and to other employees.

SEC. 103. DEFINITIONS.

    In this subtitle:
            (1) Employer; son or daughter; state.--The terms 
        ``employer'', ``son or daughter'', and ``State'' have the 
        meanings given the terms in section 101 of the Family and 
        Medical Leave Act of 1993 (29 U.S.C. 2611).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor, acting after consultation with the Secretary of 
        Health and Human Services.

SEC. 104. GRANTS.

    (a) Grants.--
            (1) In general.--The Secretary shall make grants to 
        eligible entities to pay for the Federal share of the cost of 
        carrying out projects that assist families by providing, 
        through various mechanisms, wage replacement for eligible 
        individuals who are responding to--
                    (A) caregiving needs resulting from the birth or 
                adoption of a son or daughter; or
                    (B) other family caregiving needs.
            (2) Periods.--The Secretary shall make the grants for 
        periods of 5 years.
    (b) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity shall be a State or political subdivision of a 
State.
    (c) Use of Funds.--
            (1) In general.--An entity that receives a grant under this 
        section may use the funds made available through the grant to 
        provide partial or full wage replacement as described in 
        subsection (a) to eligible individuals--
                    (A) directly;
                    (B) through an insurance program, such as a State 
                temporary disability insurance program or the State 
                unemployment compensation benefit program;
                    (C) through a private disability or other insurance 
                plan, or another mechanism provided by a private 
                employer; or
                    (D) through another mechanism.
            (2) Period.--In carrying out a project under this section, 
        the entity shall provide partial or full wage replacement to 
        eligible individuals for not less than 6 weeks during a period 
        of leave, or an absence from employment, described in 
        subsection (d)(2), during any 12-month period. Wage replacement 
        available to an individual under this paragraph shall be in 
        addition to any compensation from annual or sick leave that the 
        individual may elect to use during a period of leave, or an 
        absence from employment, described in subsection (d)(2), during 
        any 12-month period.
            (3) Administrative costs.--No entity may use more than 10 
        percent of the total funds made available through the grant 
        during the 5-year period of the grant to pay for the 
        administrative costs relating to a project described in 
        subsection (a).
    (d) Eligible Individuals.--To be eligible to receive wage 
replacement under subsection (a), an individual shall--
            (1) meet such eligibility criteria as the eligible entity 
        providing the wage replacement may specify in an application 
        described in subsection (e); and
            (2) be--
                    (A) an individual who is taking leave, under the 
                Family and Medical Leave Act of 1993 (29 U.S.C. 2601 et 
                seq.), other Federal, State, or local law, or a private 
                plan, for a reason described in subparagraph (A) or (B) 
                of section 102(a)(1) of the Family and Medical Leave 
                Act of 1993 (29 U.S.C. 2612(a)(1));
                    (B) at the option of the eligible entity, an 
                individual who--
                            (i) is taking leave, under that Act, other 
                        Federal, State, or local law, or a private 
                        plan, for a reason described in subparagraph 
                        (C), (D), (E), or (F) of section 102(a)(1) of 
                        the Family and Medical Leave Act of 1993 (29 
                        U.S.C. 2612(a)(1)); or
                            (ii) leaves employment, and has an absence 
                        from employment, because the individual has 
                        elected to care for a son or daughter under age 
                        1; or
                    (C) at the option of the eligible entity, an 
                individual who has an absence from employment and has 
                other characteristics specified by the eligible entity 
                in an application described in subsection (e).
    (e) Application.--To be eligible to receive a grant under this 
section, an entity shall submit an application to the Secretary, at 
such time, in such manner, and containing such information as the 
Secretary may require, including, at a minimum--
            (1) a description of the wage replacement program;
            (2)(A) information on the number and type of families to be 
        covered by the project, and the extent of such coverage in the 
        area served under the grant; and
            (B) information on any criteria or characteristics that the 
        entity will use to determine whether an individual is eligible 
        for wage replacement under subsection (a), as described in 
        paragraphs (1) and (2)(C) of subsection (d);
            (3) if the project will expand on State and private systems 
        of wage replacement for eligible individuals, information on 
        the manner in which the project will expand on the systems; and
            (4) information demonstrating the manner in which the wage 
        replacement assistance provided through the project will assist 
        families in which an individual takes leave or is absent from 
        employment as described in subsection (d)(2).
    (f) Selection Criteria.--In selecting entities to receive grants 
for projects under this section, the Secretary shall--
            (1) take into consideration--
                    (A) the scope of the proposed projects;
                    (B) the cost-effectiveness, feasibility, and 
                financial soundness of the proposed projects;
                    (C) the extent to which the proposed projects would 
                expand access to wage replacement in response to family 
                caregiving needs, particularly for low-wage employees, 
                in the area served by the grant; and
                    (D) the benefits that would be offered to families 
                and children through the proposed projects; and
            (2) to the extent feasible, select entities proposing 
        projects that utilize diverse mechanisms, including expansion 
        of State unemployment compensation benefit programs, and 
        establishment or expansion of State temporary disability 
        insurance programs, to provide the wage replacement.
    (g) Federal Share.--
            (1) In general.--The Federal share of the cost described in 
        subsection (a) shall be--
                    (A) 50 percent for the first year of the grant 
                period;
                    (B) 40 percent for the second year of that period;
                    (C) 30 percent for the third year of that period; 
                and
                    (D) 20 percent for each subsequent year.
            (2) Non-federal share.--The non-Federal share of the cost 
        may be in cash or in kind, fairly evaluated, including plant, 
        equipment, and services and may be provided from State, local, 
        or private sources, or Federal sources other than this 
        subtitle.
    (h) Supplement Not Supplant.--Funds appropriated pursuant to the 
authority of this subtitle shall be used to supplement and not supplant 
other Federal, State, and local public funds and private funds expended 
to provide wage replacement.
    (i) Effect on Existing Rights.--Nothing in this subtitle shall be 
construed to supersede, preempt, or otherwise infringe on the 
provisions of any collective bargaining agreement or any employment 
benefit program or plan that provides greater rights to employees than 
the rights established under this subtitle.

SEC. 105. NOTIFICATION.

    An eligible entity that provides partial or full wage replacement 
to an eligible individual under this subtitle shall notify (in a form 
and manner prescribed by the Secretary)--
            (1) the employer of the individual of the amount of the 
        wage replacement provided; and
            (2) the individual and the employer of the individual that 
        the employer shall count an appropriate period of leave, 
        calculated under section 102(g) of the Family and Medical Leave 
        Act of 1993 (29 U.S.C. 2612(g)), as added by section 108, 
        against the total amount of leave (if any) to which the 
        employee is entitled under section 102(a)(1) of that Act (29 
        U.S.C. 2612(a)(1)).

SEC. 106. REPORT.

    Not later than 3 years after the beginning of the grant period for 
the first grant made under section 104, and annually thereafter, the 
Secretary shall prepare and submit to Congress a report that contains a 
description and evaluation of the program under this subtitle for the 
preceding year.

SEC. 107. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this subtitle 
$400,000,000 for fiscal year 2004 and such sums as may be necessary for 
each subsequent fiscal year.

SEC. 108. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) In General.--Section 102 of the Family and Medical Leave Act of 
1993 (29 U.S.C. 2612) is amended by adding at the end the following:
    ``(g) Relationship to First Insurance.--
            ``(1) Full wage replacement.--If an eligible entity 
        provides full wage replacement to an employee for a period 
        under title I of the Family and Workplace Balancing Act of 
        2003, the employee's employer shall count an amount of leave, 
        equal to that period, against the total amount of leave (if 
        any) to which the employee is entitled under subsection (a)(1).
            ``(2) Partial wage replacement.--If an eligible entity 
        provides partial wage replacement to an employee for a period 
        under title I of the Family and Workplace Balancing Act of 
        2003, the employee's employer shall--
                    ``(A) total the amount of partial wage replacement 
                provided for that period;
                    ``(B) convert the total into a corresponding amount 
                of full wage replacement provided for a proportionately 
                reduced period; and
                    ``(C) count an amount of leave, equal to the period 
                described in subparagraph (B), against the total amount 
                of leave (if any) to which the employee is entitled 
                under subsection (a)(1).''.
    (b) Technical and Conforming Amendments.--Section 102(d)(2) of the 
Family and Medical Leave Act of 1993 (29 U.S.C. 2612(d)(2)) is amended 
by striking ``for leave'' and inserting ``for any unpaid leave''.

      Subtitle B--Family and Medical Leave Enhancement Act of 2003

SEC. 111. SHORT TITLE.

    This subtitle may be cited as the ``Family and Medical Leave 
Enhancement Act of 2003''.

SEC. 112. ADDITIONAL LEAVE FOR PARENTAL INVOLVEMENT.

    (a) Leave Requirement.--Section 102(a) of the Family and Medical 
Leave Act of 1993 (29 U.S.C. 2612(a)) is amended by adding at the end 
the following:
            ``(3) Entitlement to additional leave for parental 
        involvement.--
                    ``(A) In general.--Subject to section 103(f), in 
                addition to leave available under paragraph (1), an 
                eligible employee shall be entitled to a total of 4 
                hours of leave during any 30-day period, and a total of 
                24 hours of leave during any 12-month period to 
                participate in or attend an activity that--
                            ``(i) is sponsored by a school or community 
                        organization; and
                            ``(ii) relates to a program of the school 
                        or organization that is attended by a son or 
                        daughter or a grandchild of the employee.
                    ``(B) Definitions.--As used in this paragraph:
                            ``(i) School.--The term `school' means an 
                        elementary school or secondary school (as such 
                        terms are defined in the Elementary and 
                        Secondary Education Act of 1965 (20 U.S.C. 6301 
                        et seq.)), a Head Start program assisted under 
                        the Head Start Act (42 U.S.C. 9831 et seq.), 
                        and a child care facility licensed under State 
                        law.
                            ``(ii) Community organization.--The term 
                        `community organization' means a private 
                        nonprofit organization that is representative 
                        of a community or a significant segment of a 
                        community and provides activities for 
                        individuals described in subparagraph (A) or 
                        (B) of section 101(12), such as a scouting or 
                        sports organization.''.
    (b) Schedule.--Section 102(b)(1) of such Act (29 U.S.C. 2612(b)(1)) 
is amended by inserting after the second sentence the following: 
``Leave under subsection (a)(3)(A) may be taken intermittently or on a 
reduced leave schedule.''.
    (c) Substitution of Paid Leave.--Section 102(d)(2)(A) of such Act 
(29 U.S.C. 2612(d)(2)(A)) is amended--
            (1) by striking ``under'' and inserting the following: 
        ``under--
                            ``(i)''; and
            (2) inserting before the period at the end the following: 
        ``; or
                            ``(ii) subsection (a)(3)(A) for any part of 
                        the 24-hour period of such leave under such 
                        subsection''.
    (d) Notice.--Section 102(e)(1) of such Act (29 U.S.C. 2612(e)(1)) 
is amended by adding at the end the following: ``In any case in which 
an employee requests leave under subsection (a)(3)(A), the employee 
shall provide the employer with not less than 7 days' notice, before 
the date the leave is to begin, of the employee's intention to take 
leave under such subsection.''.
    (e) Certification.--Section 103 of such Act (29 U.S.C. 2613) is 
amended by adding at the end the following:
    ``(f) Certification for Parental Involvement Leave.--An employer 
may require that a request for leave under section 102(a)(3)(A) be 
supported by a certification issued at such time and in such manner as 
the Secretary may by regulation prescribe.''.

SEC. 113. PARENTAL INVOLVEMENT LEAVE FOR CIVIL SERVANTS.

    (a) Leave Requirement.--Section 6382(a) of title 5, United States 
Code, is amended by adding at the end the following:
    ``(3)(A) Subject to section 6383(f), in addition to leave available 
under paragraph (1), an employee shall be entitled to a total of 4 
hours of leave during any 30-day period, and a total of 24 hours of 
leave during any 12-month period to participate in or attend an 
activity that--
            ``(i) is sponsored by a school or community organization; 
        and
            ``(ii) relates to a program of the school or organization 
        that is attended by a son or daughter or a grandchild of the 
        employee.
    ``(B) For the purpose of this paragraph:
            ``(i) The term `school' means an elementary school or 
        secondary school (as such terms are defined in the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.)), 
        a Head Start program assisted under the Head Start Act (42 
        U.S.C. 9831 et seq.), and a child care facility licensed under 
        State law.
            ``(ii) The term `community organization' means a private 
        nonprofit organization that is representative of a community or 
        a significant segment of a community and provides activities 
        for individuals described in subparagraph (A) or (B) of section 
        6381(6), such as a scouting or sports organization.''.
    (b) Schedule.--Section 6382(b)(1) of such title is amended by 
inserting after the second sentence the following: ``Leave under 
subsection (a)(3)(A) may be taken intermittently or on a reduced leave 
schedule.''.
    (c) Substitution of Paid Leave.--Section 6382(d) of such title is 
amended by inserting before ``, except'' the following: ``, or for 
leave provided under subsection (a)(3)(A) any of the employee's accrued 
or accumulated annual leave under subchapter I for any part of the 24-
hour period of such leave under such subsection''.
    (d) Notice.--Section 6382(e)(1) of such title is amended by adding 
at the end the following: ``In any case in which an employee requests 
leave under subsection (a)(3)(A), the employee shall provide the 
employing agency with not less than 7 days' notice, before the date the 
leave is to begin, of the employee's intention to take leave under such 
subsection.''.
    (e) Certification.--Section 6383 of such title is amended by adding 
at the end the following:
    ``(f) An employing agency may require that a request for leave 
under section 6382(a)(3)(A) be supported by a certification issued at 
such time and in such manner as the Office of Personnel Management may 
by regulation prescribe.''.

SEC. 114. CLARIFICATION OF LEAVE ENTITLEMENT.

    Section 102(a)(1) of the Family and Medical Leave Act of 1993 (29 
U.S.C. 2612(a)(1)) and section 6382(a)(1) of title 5, United States 
Code, are each amended by adding at the end the following:
                    ``(E) In order to meet routine family medical 
                needs, including transportation of a son or daughter or 
                a grandchild for medical and dental appointments for 
                annual checkups and vaccinations.
                    ``(F) In order to meet the routine medical care 
                needs of elderly individuals who are related to the 
                eligible employee, including visits to nursing homes 
                and group homes.''.

SEC. 115. DEFINITION OF GRANDCHILD.

    (a) Non-Civil-Service Employees.--Section 101 of the Family and 
Medical Leave Act (29 U.S.C. 2611) is amended by adding at the end the 
following new paragraph:
            ``(14) Grandchild.--The term `grandchild' means a son or 
        daughter of an employee's child.''.
    (b) Civil Service Employees.--Section 6381 of title 5, United 
States Code, is amended--
            (1) in paragraph (5)(B), by striking ``and'' at the end;
            (2) in paragraph (6)(B), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(7) the term `grandchild' means a son or daughter of an 
        employee's child.''.

             TITLE II--CHILD CARE EXPANSION AND IMPROVEMENT

                  Subtitle A--Care for Young Children

SEC. 201. EXPANDING CHILD CARE FOR YOUNG CHILDREN.

    (a) Goals.--Section 658A(b) of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9801 note) is amended--
            (1) in paragraph (4), by striking ``and'';
            (2) in paragraph (5), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(6) to assist States in improving child care services for 
        young children.''.
    (b) Authorization of Appropriations.--Section 658B of the Child 
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858) is 
amended--
            (1) by striking ``There'' and inserting ``(a) In General.--
        There''; and
    (2) by adding at the end the following:
    ``(b) Child Care Activities for Young Children.--In addition to 
amounts appropriated under subsection (a), there is authorized to be 
appropriated to carry out child care activities for young children 
under this subchapter $500,000,000 for each of the fiscal years 2004, 
2005, and 2006.''.
    (c) Child Care Activities for Young Children.--The Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9801 et seq.) is amended 
by inserting after section 658G the following:

``SEC. 658H. CHILD CARE ACTIVITIES FOR YOUNG CHILDREN.

    ``Child care activities for young children for which funds under 
this subchapter may be used include activities that are designed to 
accomplish the following:
            ``(1) Increase the availability of child care services for 
        young children with disabilities.
            ``(2) Provide support services for networks of family child 
        care providers.
            ``(3) Provide or support programs that provide training, 
        services, materials, equipment, or other support to caregivers, 
        eligible child care providers, and family child care providers 
        that provide child care to young children. Such support may 
        include the purchase of equipment such as cribs and high 
        chairs.
            ``(4) Provide funds to increase compensation offered and 
        provide bonuses to caregivers, eligible child care providers, 
        and family child care providers who provide child care to 
        children under the age of 3 years, especially those caregivers 
        and providers who have formal education in early childhood 
        development.
            ``(5) Provide and support networks between health care 
        providers and caregivers, eligible child care providers, and 
        family child care providers that provide child care to young 
        children.
            ``(6) Provide child care services for young children who 
        are enrolled in Head Start programs under the Head Start Act 
        (42 U.S.C. 9831 et seq.).''.
    (d) Definitions.--Section 658P of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858n) is amended by adding at the 
end the following:
            ``(15) Young children.--The term `young children' means 
        eligible children who are less than 3 years of age.''.

  Subtitle B--Improving Child Care Quality Through Teacher Incentives

SEC. 221. PURPOSE.

    The purposes of this subtitle are--
            (1) to establish the Child Care Provider Development and 
        Retention Grant Program, the Child Care Provider Scholarship 
        Program, and a program of child care provider health benefits 
        coverage; and
            (2) to help children receive the high quality child care 
        and early education the children need for positive cognitive 
        and social development, by rewarding and promoting the 
        retention of committed, qualified child care providers and by 
        providing financial assistance to improve the educational 
        qualifications of child care providers.

SEC. 222. DEFINITIONS.

    In this subtitle:
            (1) Child care provider.--The term ``child care provider'' 
        means an individual who provides a service directly to a child 
        on a person-to-person basis for compensation for--
                    (A) a center-based child care provider that is 
                licensed or regulated under State or local law and that 
                satisfies the State and local requirements applicable 
                to the child care services provided;
                    (B) a licensed or regulated family child care 
                provider that satisfies the State and local 
                requirements applicable to the child care services 
                provided; or
                    (C) an out-of-school time program that is licensed 
                or regulated under State or local law and that 
                satisfies the State and local requirements applicable 
                to the child care services provided.
            (2) Family child care provider.--The term ``family child 
        care provider'' has the meaning given such term in section 658P 
        of the Child Care and Development Block Grant Act of 1990 (42 
        U.S.C. 9858n).
            (3) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given such term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (4) Lead agency.--The term ``lead agency'' means the agency 
        designated under section 658D of the Child Care and Development 
        Block Grant Act of 1990 (42 U.S.C. 9858b).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (6) State.--The term ``State'' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands of the United States, Guam, American 
        Samoa, or the Commonwealth of the Northern Mariana Islands.
            (7) Tribal organization.--The term ``tribal organization'' 
        has the meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).

SEC. 223. FUNDS FOR CHILD CARE PROVIDER DEVELOPMENT AND RETENTION 
              GRANTS, SCHOLARSHIPS, AND HEALTH BENEFITS COVERAGE.

    (a) In General.--From amounts appropriated to carry out this 
subtitle, the Secretary may allot and distribute funds to eligible 
States, and make payments to Indian tribes and tribal organizations, to 
pay for the Federal share of the cost of carrying out activities under 
sections 226, 227, and 228 for eligible child care providers.
    (b) Allotments.--The funds shall be allotted and distributed, and 
the payments shall be made, by the Secretary in accordance with section 
224, and expended by the States (directly, or at the option of the 
States, through units of general purpose local government), and by 
Indian tribes and tribal organizations, in accordance with this 
subtitle.

SEC. 224. ALLOTMENTS TO STATES.

    (a) Amounts Reserved.--
            (1) Territories and possessions.--The Secretary shall 
        reserve not more than \1/2\ of 1 percent of the funds 
        appropriated under section 231(a), and not more than \1/2\ of 1 
        percent of the funds appropriated under section 232(b), for any 
        fiscal year for payments to the Virgin Islands of the United 
        States, Guam, American Samoa, and the Commonwealth of the 
        Northern Mariana Islands, to be allotted in accordance with 
        their respective needs.
            (2) Indian tribes and tribal organizations.--The Secretary 
        shall reserve not more than 3 percent of the funds appropriated 
        under section 231(a), and not more than 3 percent of the funds 
        appropriated under section 231(b), for any fiscal year for 
        payments to Indian tribes and tribal organizations with 
        applications approved under subsection (c).
    (b) Allotments to Remaining States.--
            (1) General authority.--From the funds appropriated under 
        section 231(a) for any fiscal year and remaining after the 
        reservations made under subsection (a), and from the funds 
        appropriated under section 231(b) for any fiscal year and 
        remaining after the reservations made under subsection (a), the 
        Secretary shall allot to each State an amount equal to the sum 
        of--
                    (A) an amount that bears the same ratio to 50 
                percent of the appropriate remainder as the product of 
                the young child factor of the State and the allotment 
                percentage of the State bears to the sum of the 
                corresponding products for all States; and
                    (B) an amount that bears the same ratio to 50 
                percent of such remainder as the product of the school 
                lunch factor of the State and the allotment percentage 
                of the State bears to the sum of the corresponding 
                products for all States.
            (2) Young child factor.--In this subsection, the term 
        ``young child factor'' means the ratio of the number of 
        children under 5 years of age in the State to the number of 
        such children in all the States, as determined according to the 
        most recent annual estimates of population in the States, as 
        provided by the Bureau of the Census.
            (3) School lunch factor.--In this subsection, the term 
        ``school lunch factor'' means the ratio of the number of 
        children who are receiving free or reduced price lunches under 
        the school lunch program established under the Richard B. 
        Russell National School Lunch Act (42 U.S.C. 1751 et seq.) in 
        the State to the number of such children in all the States, as 
        determined annually by the Department of Agriculture.
            (4) Allotment percentage.--
                    (A) In general.--Except as provided in subparagraph 
                (B), for purposes of this subsection, the allotment 
                percentage for a State shall be determined by dividing 
                the per capita income of all individuals in the United 
                States, by the per capita income of all individuals in 
                the State.
                    (B) Limitations.--For purposes of this subsection, 
                if an allotment percentage determined under 
                subparagraph (A)--
                            (i) is more than 1.2 percent, the allotment 
                        percentage of that State shall be considered to 
                        be 1.2 percent; and
                            (ii) is less than 0.8 percent, the 
                        allotment percentage of the State shall be 
                        considered to be 0.8 percent.
                    (C) Per capita income.--For purposes of 
                subparagraph (A), per capita income shall be--
                            (i) determined at 2-year intervals;
                            (ii) applied for the 2-year period 
                        beginning on October 1 of the first fiscal year 
                        beginning after the date such determination is 
                        made; and
                            (iii) equal to the average of the annual 
                        per capita incomes for the most recent period 
                        of 3 consecutive years for which satisfactory 
                        data are available from the Department of 
                        Commerce at the time such determination is 
                        made.
    (c) Payments to Indian Tribes and Tribal Organizations.--
            (1) Reservation of funds.--From amounts reserved under 
        subsection (a)(2), the Secretary may make grants to or enter 
        into contracts with Indian tribes and tribal organizations that 
        submit applications under this subsection, to plan and carry 
        out programs and activities--
                    (A) to encourage child care providers to improve 
                their qualifications;
                    (B) to retain qualified child care providers in the 
                child care field; and
                    (C) to provide health benefits coverage for child 
                care providers.
            (2) Applications and requirements.--To be eligible to 
        receive a grant or contract under this subsection, an Indian 
        tribe or tribal organization shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require. The application shall 
        provide that the applicant--
                    (A) will coordinate the programs and activities 
                involved, to the maximum extent practicable, with the 
                lead agency in each State in which the applicant will 
                carry out such programs and activities; and
                    (B) will make such reports on, and conduct such 
                audits of the funds made available through the grant or 
                contract for, programs and activities under this 
                subtitle as the Secretary may require.
    (d) Data and Information.--The Secretary shall obtain from each 
appropriate Federal agency, the most recent data and information 
necessary to determine the allotments provided for in subsection (b).
    (e) Reallotments.--
            (1) In general.--Any portion of an allotment under 
        subsection (b) to a State for a fiscal year that the Secretary 
        determines will not be distributed to the State for such fiscal 
        year shall be reallotted by the Secretary to other States in 
        proportion to the original corresponding allotments made under 
        such subsection to such States for such fiscal year.
            (2) Limitations.--
                    (A) Reduction.--The amount of any reallotment to 
                which a State is entitled under this subsection shall 
                be reduced to the extent that such amount exceeds the 
                amount that the Secretary estimates will be distributed 
                to the State to carry out corresponding activities 
                under this subtitle.
                    (B) Reallotments.--The amount of such reduction 
                shall be reallotted to States for which no reduction in 
                a corresponding allotment, or in a corresponding 
                reallotment, is required by this subsection, in 
                proportion to the original corresponding allotments 
                made under subsection (b) to such States for such 
                fiscal year.
            (3) Amounts reallotted.--For purposes of this subtitle 
        (other than this subsection and subsection (b)), any amount 
        reallotted to a State under this subsection shall be considered 
        to be part of the corresponding allotment made under subsection 
        (b) to the State.
            (4) Indian tribes or tribal organizations.--Any portion of 
        a grant or contract made to an Indian tribe or tribal 
        organization under subsection (c) that the Secretary determines 
        is not being used in a manner consistent with the provisions of 
        this subtitle in the period for which the grant or contract is 
        made available, shall be used by the Secretary to make payments 
        to other tribes or organizations that have submitted 
        applications under subsection (c) in accordance with their 
        respective needs.
    (f) Cost-Sharing.--
            (1) Child care provider development and retention grants 
        and scholarships.--
                    (A) Federal share.--The Federal share of the cost 
                of carrying out activities under sections 226 and 227, 
                with funds allotted under this section and distributed 
by the Secretary to a State, shall be--
                            (i) not more than 90 percent of the cost of 
                        each grant made under such sections, in the 
                        first fiscal year for which the State receives 
                        such funds;
                            (ii) not more than 85 percent of the cost 
                        of each grant made under such sections, in the 
                        second fiscal year for which the State receives 
                        such funds;
                            (iii) not more than 80 percent of the cost 
                        of each grant made under such sections, in the 
                        third fiscal year for which the State receives 
                        such funds; and
                            (iv) not more than 75 percent of the cost 
                        of each grant made under such sections, in any 
                        subsequent fiscal year for which the State 
                        receives such funds.
                    (B) Non-federal share.--
                            (i) In general.--The State may provide the 
                        non-Federal share of the cost in cash or in the 
                        form of an in-kind contribution, fairly 
                        evaluated by the Secretary.
                            (ii) In-kind contribution.--In this 
                        subparagraph, the term ``in-kind contribution'' 
                        means payment of the costs of participation of 
                        eligible child care providers in health 
                        insurance programs or retirement programs.
            (2) Child care provider health benefits coverage.--
                    (A) Federal share.--The Federal share of the cost 
                of carrying out activities under section 228, with 
                funds allotted under this section and distributed by 
                the Secretary to a State, shall be not more than 50 
                percent of such cost.
                    (B) Non-federal share.--The State may provide the 
                non-Federal share of the cost in cash or in kind, 
                fairly evaluated by the Secretary, including plant, 
                equipment, or services. The State shall provide the 
                non-Federal share directly or through donations from 
                public or private entities. Amounts provided by the 
                Federal Government, or services assisted or subsidized 
                to any significant extent by the Federal Government, 
                may not be included in determining the amount of such 
                share.
    (g) Availability of Allotted Funds Distributed to States.--Of the 
funds allotted under this section for activities described in sections 
226 and 227 and distributed by the Secretary to a State for a fiscal 
year--
            (1) not less than 67.5 percent shall be available to the 
        State for grants under section 226;
            (2) not less than 22.5 percent shall be available to the 
        State for grants under section 227; and
            (3) not more than 10 percent shall be available to pay 
        administrative costs incurred by the State to carry out 
        activities described in sections 226 and 227.
    (h) Definition.--For the purposes of subsections (a) through (e), 
the term ``State'' includes only the 50 States, the District of 
Columbia, and the Commonwealth of Puerto Rico.

SEC. 225. APPLICATION AND PLAN.

    (a) Application.--To be eligible to receive a distribution of funds 
allotted under section 224, a State shall submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require by rule and shall include in 
such application--
            (1) a State plan that satisfies the requirements of 
        subsection (b); and
            (2) assurances of compliance satisfactory to the Secretary 
        with respect to the requirements of section 228.
    (b) Requirements of Plan.--
            (1) Lead agency.--The State plan shall identify the lead 
        agency to make grants under this subtitle for the State.
            (2) Recruitment and retention of child care providers.--The 
        State plan shall describe how the lead agency will encourage 
        both the recruitment of qualified child care providers who are 
        new to the child care field and the retention of qualified 
        child care providers who have a demonstrated commitment to the 
        child care field.
            (3) Notification of availability of grants and benefits.--
        The State plan shall describe how the lead agency will identify 
        all eligible child care providers in the State and notify the 
        providers of the availability of grants and benefits under this 
        subtitle.
            (4) Distribution of grants.--The State plan shall describe 
        how the lead agency will make grants under sections 226 and 227 
        to eligible child care providers in selected geographical areas 
        in the State in compliance with the following requirements:
                    (A) Selection of geographical areas.--For the 
                purpose of making such grants for a fiscal year, the 
                State shall--
                            (i) select a variety of geographical areas, 
                        determined by the State, that, collectively--
                                    (I) include urban areas, suburban 
                                areas, and rural areas; and
                                    (II) are areas whose residents have 
                                diverse income levels; and
                            (ii) give special consideration to 
                        geographical areas selected under this 
                        subparagraph for the preceding fiscal year.
                    (B) Selection of child care providers to receive 
                grants.--In making grants under section 226, the State 
                may make grants only to eligible child care providers 
                in geographical areas selected under subparagraph (A), 
                but may give special consideration in such areas to 
                eligible child care providers--
                            (i) who have attained a higher relevant 
                        educational credential;
                            (ii) who provide a specific kind of child 
                        care services;
                            (iii) who provide child care services to 
                        populations who meet specific economic 
                        characteristics; or
                            (iv) who meet such other criteria as the 
                        State may establish.
                    (C) Limitation.--The State shall describe how the 
                State will ensure that grants made under section 226 to 
                child care providers will not be used to offset 
                reductions in the compensation of such providers.
                    (D) Reporting requirement.--With respect to each 
                particular geographical area selected under 
                subparagraph (A), the State shall provide an assurance 
                that the State will, for each fiscal year for which 
                such State receives a grant under section 226--
                            (i) include in the report required by 
                        section 229, detailed information regarding--
                                    (I) the continuity of employment of 
                                the grant recipients as child care 
                                providers with the same employer;
                                    (II) with respect to each employer 
                                that employed such a grant recipient, 
                                whether such employer was accredited by 
                                a recognized national or State 
                                accrediting body during the period of 
                                employment; and
                                    (III) to the extent practicable and 
                                available to the State, the rate and 
                                frequency of employment turnover of 
                                qualified child care providers 
                                throughout such area,
                        during the 2-year period ending on the deadline 
                        for submission of applications for grants under 
                        section 226 for that fiscal year; and
                            (ii) provide a follow-up report, not later 
                        than 90 days after the end of the succeeding 
                        fiscal year that includes information 
                        regarding--
                                    (I) the continuity of employment of 
                                the grant recipients as child care 
                                providers with the same employer;
                                    (II) with respect to each employer 
                                that employed such a grant recipient, 
                                whether such employer was accredited by 
                                a recognized national or State 
                                accrediting body during the period of 
                                employment; and
                                    (III) to the extent practicable and 
                                available to the State, detailed 
                                information regarding the rate and 
                                frequency of employment turnover of 
                                qualified child care providers 
                                throughout such area,
                        during the 1-year period beginning on the date 
                        on which the grant to the State was made under 
                        section 226.
            (5) Child care provider development and retention grant 
        program.--The State plan shall describe how the lead agency 
        will determine the amounts of grants to be made under section 
        226 in accordance with the following requirements:
                    (A) Sufficient amounts.--The State shall 
                demonstrate that the amounts of individual grants to be 
                made under section 226 will be sufficient--
                            (i) to encourage child care providers to 
                        improve their qualifications; and
                            (ii) to retain qualified child care 
                        providers in the child care field.
                    (B) Amounts to credentialed providers.--Such grants 
                made to eligible child care providers who have a child 
                development associate credential (or equivalent) and 
                who are employed full-time to provide child care 
                services shall be in an amount that is not less than 
                $1,000 per year.
                    (C) Amounts to providers with higher levels of 
                education.--The State shall make such grants in amounts 
                greater than $1,000 per year to eligible child care 
                providers who have higher levels of education than the 
                education required for a credential such as a child 
                development associate credential (or equivalent), 
                according to the following requirements:
                            (i) Providers with baccalaureate degrees in 
                        relevant fields.--An eligible child care 
                        provider who has a baccalaureate degree in the 
                        area of child development or early child 
                        education shall receive a grant under section 
                        226 in an amount that is not less than twice 
                        the amount of the grant that is made under 
                        section 226 to an eligible child care provider 
                        who has an associate of the arts degree in the 
                        area of child development or early child 
                        education.
                            (ii) Providers with associate degrees.--An 
                        eligible child care provider who has an 
                        associate of the arts degree in the area of 
                        child development or early child education 
                        shall receive a grant under section 226 in an 
                        amount that is not less than 150 percent of the 
                        amount of the grant that is made under section 
                        226 to an eligible child care provider who has 
                        a child development associate credential (or 
                        equivalent) and is employed full-time to 
                        provide child care services.
                            (iii) Other providers with baccalaureate 
                        degrees.--
                                    (I) In general.--Except as provided 
                                in subclause (II), an eligible child 
                                care provider who has a baccalaureate 
                                degree in a field other than child 
                                development or early child education 
                                shall receive a grant under section 226 
                                in an amount equal to the amount of the 
                                grant that is made under section 226 to 
                                an eligible child care provider who has 
                                an associate of the arts degree in the 
area of child development or early child education.
                                    (II) Exception.--If an eligible 
                                child care provider who has such a 
                                baccalaureate degree obtains additional 
                                educational training in the area of 
                                child development or early child 
                                education, as specified by the State, 
                                such provider shall receive a grant 
                                under section 226 in an amount equal to 
                                the amount of the grant that is made 
                                under section 226 to an eligible child 
                                care provider who has a baccalaureate 
                                degree specified in clause (i).
                    (D) Amounts to full-time providers.--The State 
                shall make a grant under section 226 to an eligible 
                child care provider who works full-time in a greater 
                amount than the amount of the grant that is made under 
                section 226 to an eligible child care provider who 
                works part-time, based on the State definitions of 
                full-time and part-time work.
                    (E) Amounts to experienced providers.--The State 
                shall make grants under section 226 in progressively 
                larger amounts to eligible child care providers to 
                reflect the number of years worked as child care 
                providers.
            (6) Distribution of child care provider scholarships.--The 
        State plan shall describe how the lead agency will make grants 
        for scholarships in compliance with section 227 and shall 
        specify the types of educational and training programs for 
        which the scholarship grants made under such section may be 
        used, including only programs that--
                    (A) are administered by institutions of higher 
                education that are eligible to participate in student 
                financial assistance programs under title IV of the 
                Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); 
                and
                    (B) lead to a State or nationally recognized 
                credential in the area of child development or early 
                child education, an associate of the arts degree in the 
                area of child development or early child education, or 
                a baccalaureate degree in the area of child development 
                or early child education.
            (7) Employer contribution.--The State plan shall describe 
        how the lead agency will encourage employers of child care 
        providers to contribute to the attainment of education goals by 
        eligible child care providers who receive grants under section 
        227.
            (8) Supplementation.--The State plan shall provide 
        assurances that amounts received by the State to carry out 
        sections 226, 227, and 228 will be used only to supplement, and 
        not to supplant, Federal, State, and local funds otherwise 
        available to support existing services and activities (as of 
        the date the amounts are used) that--
                    (A) encourage child care providers to improve their 
                qualifications and that promote the retention of 
                qualified child care providers in the child care field; 
                or
                    (B) provide health benefits coverage for child care 
                providers.

SEC. 226. CHILD CARE PROVIDER DEVELOPMENT AND RETENTION GRANT PROGRAM.

    (a) In General.--A State that receives funds allotted under section 
224 and made available to carry out this section shall expend such 
funds to pay for the Federal share of the cost of making grants to 
eligible child care providers in accordance with this section, to 
improve the qualifications and promote the retention of qualified child 
care providers.
    (b) Eligibility To Receive Grants.--To be eligible to receive a 
grant under this section, a child care provider shall--
            (1) have a child development associate credential (or 
        equivalent), an associate of the arts degree in the area of 
        child development or early child education, a baccalaureate 
        degree in the area of child development or early child 
        education, or a baccalaureate degree in an unrelated field; and
            (2) be employed as a child care provider for not less than 
        1 calendar year, or (if the provider is employed on the date of 
        the eligibility determination in a child care program that 
        operates for less than a full calendar year) the program 
        equivalent of 1 calendar year, ending on the date of the 
        application for such grant, except that not more than 3 months 
        of education related to child development or to early child 
        education obtained during the corresponding calendar year may 
        be treated as employment that satisfies the requirements of 
        this paragraph.
    (c) Preservation of Eligibility.--A State shall not take into 
consideration whether a child care provider is receiving, may receive, 
or may be eligible to receive any funds or benefits under any other 
provision of this subtitle for purposes of selecting eligible child 
care providers to receive grants under this section.

SEC. 227. CHILD CARE PROVIDER SCHOLARSHIP PROGRAM.

    (a) In General.--A State that receives funds allotted under section 
224 and made available to carry out this section shall expend such 
funds to pay for the Federal share of the cost of making scholarship 
grants to eligible child care providers in accordance with this 
section, to improve their educational qualifications to provide child 
care services.
    (b) Eligibility Requirement for Scholarship Grants.--To be eligible 
to receive a scholarship grant under this section, a child care 
provider shall be employed as a child care provider for not less than 1 
calendar year, or (if the provider is employed on the date of the 
eligibility determination in a child care program that operates for 
less than a full calendar year) the program equivalent of 1 calendar 
year, ending on the date of the application for such grant.
    (c) Selection of Grantees.--For purposes of selecting eligible 
child care providers to receive scholarship grants under this section 
and determining the amounts of such grants, a State shall not--
            (1) take into consideration whether a child care provider 
        is receiving, may receive, or may be eligible to receive any 
funds or benefits under any other provision of this subtitle, or under 
any other Federal or State law that provides funds for educational 
purposes; or
            (2) consider as resources of such provider any funds such 
        provider is receiving, may receive, or may be eligible to 
        receive under any other provision of this subtitle, under any 
        other Federal or State law that provides funds for educational 
        purposes, or from a private entity.
    (d) Cost-Sharing Required.--The amount of a scholarship grant made 
under this section to an eligible child care provider shall be less 
than the cost of the educational or training program for which such 
grant is made.
    (e) Annual Maximum Scholarship Grant Amount.--The maximum aggregate 
dollar amount of a scholarship grant made by a State to an eligible 
child care provider under this section in a fiscal year shall be 
$1,500.

SEC. 228. CHILD CARE PROVIDER HEALTH BENEFITS COVERAGE.

    (a) Short Title.--This section may be cited as the ``Healthy Early 
Education Workforce Grant Program Act''.
    (b) Definition.--In this section, the terms ``dependent'', 
``domestic partner'', and ``spouse'', used with respect to a State, 
have the meanings given the terms by the State.
    (c) General Authority.--A State that receives funds allotted under 
section 224 and made available to carry out this section shall expend 
such funds to pay for the Federal share of the cost of providing access 
to affordable health benefits coverage for--
            (1) eligible child care providers; and
            (2) at the discretion of the State involved, the spouses, 
        domestic partners, and dependents of such providers.
    (d) Permissible Activities.--In carrying out subsection (c), the 
State may expend such funds for any of the following:
            (1) To reimburse an employer of an eligible child care 
        provider, or the provider, for the employer's or provider's 
        share (or a portion of the share) of the premiums or other 
        costs for coverage under group or individual health plans.
            (2) To offset the cost of enrolling eligible child care 
        providers in public health benefits plans, such as the medicaid 
        program under title XIX of the Social Security Act (42 U.S.C. 
        1396 et seq.), the State children's health insurance program 
        under title XXI of such Act (42 U.S.C. 1397aa et seq.), or 
        public employee health benefit plans.
            (3) To otherwise subsidize the cost of health benefits 
        coverage for eligible child care providers.
    (e) Eligibility Criteria for Health Benefits Coverage.--The State 
may establish criteria to limit the child care providers who may 
receive benefits through the allotment.
    (f) Selection of Grantees.--For purposes of selecting eligible 
child care providers to receive benefits under this section for a 
fiscal year, a State shall give--
            (1) highest priority to--
                    (A) providers that meet any applicable criteria 
                established in accordance with subsection (e) and 
                received such assistance during the previous fiscal 
                year; and
                    (B) at the State's discretion, the spouses, 
                domestic partners, and dependents of such providers; 
                and
            (2) second highest priority to--
                    (A) providers that meet any applicable criteria 
                established in accordance with subsection (e) and are 
                accredited by the National Association for the 
                Education of Young Children or the National Association 
                for Family Child Care; and
                    (B) at the State's discretion, the spouses, 
                domestic partners, and dependents of such providers.

SEC. 229. ANNUAL REPORT.

    A State that receives funds appropriated to carry out this subtitle 
for a fiscal year shall submit to the Secretary, not later than 90 days 
after the end of such fiscal year, a report--
            (1) specifying the uses for which the State expended such 
        funds, and the aggregate amount of funds (including State 
        funds) expended for each of such uses;
            (2) containing available data relating to grants made and 
        benefits provided with such funds, including--
                    (A) the number of eligible child care providers who 
                received such grants and benefits;
                    (B) the amounts of such grants and benefits;
                    (C) any other information that describes or 
                evaluates the effectiveness of this subtitle;
                    (D) the particular geographical areas selected 
                under section 225 for the purpose of making such 
                grants;
                    (E) with respect to grants made under section 226--
                            (i) the number of years grant recipients 
                        have been employed as child care providers;
                            (ii) the level of training and education of 
                        grant recipients;
                            (iii) to the extent practicable and 
                        available to the State, detailed information 
                        regarding the salaries and other compensation 
                        received by grant recipients to provide child 
                        care services before, during, and after 
                        receiving such grants;
                            (iv) the number of children who received 
                        child care services provided by grant 
                        recipients;
                            (v) information on family demographics of 
                        such children;
                            (vi) the types of settings described in 
                        subparagraphs (A), (B), and (C) of section 
                        222(1) in which grant recipients are employed; 
                        and
                            (vii) the ages of the children who received 
                        child care services provided by grant 
                        recipients;
                    (F) with respect to grants made under section 227--
                            (i) the number of years grant recipients 
                        have been employed as child care providers;
                            (ii) the level of training and education of 
                        grant recipients;
                            (iii) to the extent practicable and 
                        available to the State, detailed information 
                        regarding the salaries and other compensation 
                        received by grant recipients to provide child 
                        care services before, during, and after 
                        receiving such grants;
                            (iv) the types of settings described in 
                        subparagraphs (A), (B), and (C) of section 
                        222(1) in which grant recipients are employed;
                            (v) the ages of the children who received 
                        child care services provided by grant 
                        recipients;
                            (vi) the number of course credits or 
                        credentials obtained by grant recipients; and
                            (vii) the amount of time taken for 
                        completion of the educational and training 
                        programs for which such grants were made; and
                    (G) such other information as the Secretary may 
                require by rule.

SEC. 230. EVALUATION OF HEALTH BENEFITS PROGRAMS BY SECRETARY.

    (a) Evaluation.--The Secretary shall conduct an evaluation of 
several State programs carried out with grants made under section 228, 
representing various approaches to raising the rate of child care 
providers with health benefits coverage.
    (b) Assessment of Impacts.--In evaluating State programs under 
subsection (a), the Secretary may consider any information appropriate 
to measure the success of the programs, and shall assess the impact of 
the programs on the following:
            (1) The rate of child care providers with health benefits 
        coverage.
            (2) The take-up rate by eligible child care providers.
            (3) The turnover rate in the child care field.
            (4) The average wages paid to a child care provider.
    (c) Report.--Not later than 3 years after the date of enactment of 
this subtitle, the Secretary shall prepare and submit a report to 
Congress containing the results of the evaluation conducted under 
subsection (a), together with recommendations for strengthening 
programs carried out with grants made under section 228.

SEC. 231. AUTHORIZATION OF APPROPRIATIONS.

    (a) Child Care Provider Development, Retention, and Scholarships.--
There are authorized to be appropriated to carry out the activities 
described in sections 226 and 227 $500,000,000 for fiscal year 2004 and 
such sums as may be necessary for each of fiscal years 2005 through 
2008.
    (b) Child Care Provider Health Benefits Coverage.--There is 
authorized to be appropriated to carry out the activities described in 
section 228 $200,000,000 for fiscal year 2004 and such sums as may be 
necessary for each of fiscal years 2005 through 2008.

  Subtitle C--Child Care Construction and Renovation Incentive Grants

SEC. 241. SHORT TITLE.

    This subtitle may be cited as the ``Child Care Construction and 
Renovation Incentive Grants Act''.

SEC. 242. USE OF COMMUNITY DEVELOPMENT BLOCK GRANTS TO ESTABLISH CHILD 
              CARE FACILITIES.

    Section 105(a) of the Housing and Community Development Act of 1974 
(42 U.S.C. 5305(a)) is amended--
            (1) in paragraph (22), by striking ``and'' at the end;
            (2) in paragraph (23), by striking the period at the end 
        and inserting a semicolon;
            (3) in paragraph (25), by striking the period at the end 
        and inserting ``; and''; and
            (4) by adding at the end the following:
            ``(26) the construction and renovation of child care 
        facilities.''.

SEC. 243. INSURANCE FOR MORTGAGES ON NEW AND REHABILITATED CHILD CARE 
              FACILITIES.

    Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is 
amended by adding at the end the following:

``SEC. 257. MORTGAGE INSURANCE FOR CHILD CARE FACILITIES.

    ``(a) Definitions.--In this section:
            ``(1) Child care facility.--The term `child care 
        facility'--
                    ``(A) means a public or private facility that--
                            ``(i) has as its purpose the care and 
                        development of--
                                    ``(I) children who are less than 16 
                                years of age; or
                                    ``(II) school-age children and 
                                youth during non-school hours; and
                            ``(ii) is operated in accordance with all 
                        applicable State and local laws and 
                        regulations; and
                    ``(B) does not include any facility for school-age 
                children that is primarily for use during normal school 
                hours.
            ``(2) Equipment.--The term `equipment' includes--
                    ``(A) machinery, utilities, and built-in equipment, 
                and any necessary enclosure or structure to house them; 
                and
                    ``(B) any other items necessary for the functioning 
                of a particular facility as a child care facility, 
including necessary furniture, books, and curricular and program 
materials.
            ``(3) First mortgage.--The term `first mortgage'--
                    ``(A) means such classes of first liens as are 
                commonly given to secure advances (including advances 
                during construction) on, or the unpaid purchase price 
                of, real estate under the laws of the State in which 
                the real estate is located, together with the credit 
                instrument or instruments (if any) secured thereby; and
                    ``(B) includes any mortgage in the form of 1 or 
                more trust mortgages or mortgage indentures or deeds of 
                trust, securing notes, bonds, or other credit 
                instruments, that, by the same instrument or by a 
                separate instrument, creates a security interest in 
                initial equipment, whether or not attached to the 
                realty.
            ``(4) Mortgage.--The term `mortgage' means a first mortgage 
        on real estate in fee simple, or on the interest of either the 
        lessor or lessee thereof under a lease having a period of not 
        less than 7 years to run beyond the maturity date of the 
        mortgage.
            ``(5) Mortgagor.--The term `mortgagor' has the meaning 
        given the term in section 207(a).
    ``(b) Insurance of Mortgages.--In order to facilitate the 
establishment and rehabilitation of child care facilities, the 
Secretary may--
            ``(1) insure a mortgage that is secured by a property or 
        project that is--
                    ``(A) a new child care facility, including a new 
                addition to an existing child care facility (regardless 
                of whether the existing facility is being 
                rehabilitated); or
                    ``(B) a substantially rehabilitated child care 
                facility, including equipment to be used in the 
                operation of the facility; and
            ``(2) make a commitment to insure any mortgage described in 
        paragraph (1) before the date of execution or disbursement of 
        the mortgage.
    ``(c) Terms and Conditions.--
            ``(1) Eligible child care facilities.--Each mortgage 
        insured under this section shall be secured by a child care 
        facility that the Secretary determines, during the 12-month 
        period preceding the date on which the commitment to insure the 
        mortgage is issued under this section, complies or will be in 
        compliance within 12 months, with any laws, standards, and 
        requirements applicable to child care facilities under the laws 
        of the State, municipality, or other unit of general local 
        government in which the facility is or is to be located.
            ``(2) Approved mortgagor.--
                    ``(A) In general.--Each mortgage insured under this 
                section shall be executed by a mortgagor approved by 
                the Secretary.
                    ``(B) Regulation.--The Secretary may--
                            ``(i) require an approved mortgagor who 
                        executes a mortgage under subparagraph (A) to 
                        be regulated with respect to charges and 
                        methods of financing and, if the mortgagor is a 
                        corporate entity, with respect to capital 
                        structure and rate of return; and
                            ``(ii) as an aid to the regulation of any 
                        mortgagor under clause (i), make such contracts 
                        with and acquire for not more than $100 such 
                        stock or interest in such mortgagor as the 
                        Secretary considers to be necessary.
                    ``(C) Stock or interest.--Any stock or interest 
                purchased under subparagraph (B)(ii) shall be--
                            ``(i) paid for out of the General Insurance 
                        Fund; and
                            ``(ii) redeemed by the mortgagor at par 
                        upon the termination of all obligations of the 
                        Secretary under the insurance.
            ``(3) Principal obligation.--Each mortgage insured under 
        this section shall involve a principal obligation in an amount 
        not to exceed 90 percent of the estimated value of the property 
        or project, or 95 percent of the estimated value of the 
        property or project in the case of a mortgagor that is a 
        private nonprofit corporation or association (as defined 
        pursuant to section 221(d)(3)), including--
                    ``(A) equipment to be used in the operation of the 
                facility when the proposed improvements are completed 
                and the equipment is installed; or
                    ``(B) a solar energy system (as defined in 
                subparagraph (3) of the last paragraph of section 2(a)) 
                or residential energy conservation measures (as defined 
                in subparagraphs (A) through (G) and (I) of section 
                210(11) of the National Energy Conservation Policy 
                Act), in cases in which the Secretary determines that 
                such measures are in addition to those required under 
the minimum property standards and will be cost-effective over the life 
of the measure.
            ``(4) Amortization and interest.--Each mortgage insured 
        under this section shall--
                    ``(A) provide for complete amortization by periodic 
                payments under such terms as the Secretary shall 
                prescribe;
                    ``(B) have a maturity date satisfactory to the 
                Secretary, but in no event longer than 25 years; and
                    ``(C) bear interest at such rate as may be agreed 
                upon by the mortgagor and the mortgagee, and the 
                Secretary shall not issue any regulations or establish 
                any terms or conditions that interfere with the ability 
                of the mortgagor and mortgagee to determine the 
                interest rate.
            ``(5) Release.--The Secretary may consent to the release of 
        a part or parts of the mortgaged property or project from the 
        lien of any mortgage insured under this section upon such terms 
        and conditions as the Secretary may prescribe.
            ``(6) Mortgage insurance terms.--Subsections (d), (e), (g), 
        (h), (i), (j), (k), (l), and (n) of section 207 apply to any 
        mortgage insured under this section, except that all references 
        in such subsections to section 207 shall be construed, for 
        purposes of mortgage insurance under this section, to refer to 
        this section.
    ``(d) Mortgage Insurance for Fire Safety Equipment Loans.--
            ``(1) Authority.--The Secretary may, upon such terms and 
        conditions as the Secretary may prescribe, make commitments to 
        insure and insure loans made by financial institutions or other 
        approved mortgagees to child care facilities to provide for the 
        purchase and installation of fire safety equipment necessary 
        for compliance with the 1967 edition of the Life Safety Code of 
        the National Fire Protection Association (or any subsequent 
        edition specified by the Secretary of Health and Human 
        Services).
            ``(2) Loan requirements.--To be eligible for insurance 
        under this subsection a loan shall--
                    ``(A) not exceed the estimate by the Secretary of 
                the reasonable cost of the equipment fully installed;
                    ``(B) bear interest at such rate as may be agreed 
                upon by the mortgagor and the mortgagee;
                    ``(C) have a maturity date satisfactory to the 
                Secretary;
                    ``(D) be made by a financial institution or other 
                mortgagee approved by the Secretary as eligible for 
                insurance under section 2 or a mortgagee approved under 
                section 203(b)(1);
                    ``(E) comply with other such terms, conditions, and 
                restrictions as the Secretary may prescribe; and
                    ``(F) be made with respect to a child care facility 
                that the Secretary determines, during the 12-month 
                period preceding the date on which the commitment to 
                insure the mortgage is issued under this subsection, 
                complies or will be in compliance within 12 months, 
                with any laws, standards, and requirements applicable 
                to child care facilities under the laws of the State, 
                municipality, or other unit of general local government 
                in which the facility is or is to be located.
            ``(3) Insurance requirements.--
                    ``(A) Section 2.--Subsections (c), (d), and (h) of 
                section 2 shall apply to any loan insured under this 
                subsection, except that all references in such 
                subsections to `this section' or `this title' shall be 
                construed, for purposes of this subsection, to refer to 
                this subsection.
                    ``(B) Section 220.--Paragraphs (5), (6), (7), (9), 
                and (10) of section 220(h) shall apply to any loan 
                insured under this subsection, except that all 
                references in such paragraphs to home improvement loans 
                shall be construed, for purposes of this subsection, to 
                refer to loans under this subsection.
    ``(e) Schedules and Deadlines.--The Secretary shall establish 
schedules and deadlines for the processing and approval (or provision 
of notice of disapproval) of applications for mortgage insurance under 
this section.
    ``(f) Limitation on Insurance Authority.--
            ``(1) Termination.--No mortgage may be insured under this 
        section or section 223(h) after September 30, 2007, except 
        pursuant to a commitment to insure issued on or before such 
        date.
            ``(2) Aggregate principal amount limitation.--
                    ``(A) In general.--The aggregate principal amount 
                of mortgages for which the Secretary enters into 
                commitments to insure under this section or section 
                223(h) on or before the date described in paragraph (1) 
                may not exceed $2,000,000,000.
                    ``(B) Report.--If, on the date described in 
                paragraph (1), the aggregate insurance authority 
                provided under this paragraph has not been fully used, 
                the Secretary of the Treasury shall submit to Congress 
                a report evaluating the need for continued mortgage 
                insurance under this section.
    ``(g) Nondiscrimination Requirement.--
            ``(1) In general.--A child care facility receiving 
        assistance under this title may not discriminate on the basis 
        of race, color, or national origin (to the extent provided in 
        title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
        seq.)), religion (subject to subparagraph (B)), national 
        origin, sex (to the extent provided in title IX of the 
        Education Amendments of 1972 (20 U.S.C. 1681 et seq.)), or 
        disability (to the extent provided in section 504 of the 
        Rehabilitation Act of 1973 (29 U.S.C. 794)), under any program 
        or activity receiving Federal financial assistance under this 
        title.
            ``(2) Facilities of religious organizations.--The 
        prohibition with respect to religion under paragraph (1) shall 
        not apply to a child care facility that is controlled by, or 
        that is closely identified with, the tenets of a particular 
        religious organization, if the application of this paragraph 
        would not be consistent with the religious tenets of such 
        organization.
    ``(h) Liability Insurance.--A child care provider operating a child 
care facility assisted under this section or section 223(h) shall 
obtain and maintain liability insurance in such amounts and subject to 
such requirements as the Secretary considers to be appropriate.
    ``(i) Small Purpose Loans.--
            ``(1) In general.--To the extent that amounts are made 
        available pursuant to subsection (l), the Secretary shall make 
        loans, directly or indirectly, to providers of child care 
        facilities for reconstruction or renovation of such facilities, 
        in accordance with this subsection.
            ``(2) Requirements.--A loan under this subsection--
                    ``(A) may be made only for a child care facility 
                that is financially and operationally viable, as 
                determined under standards established by the 
                Secretary;
                    ``(B) may not have a term to maturity exceeding 7 
                years;
                    ``(C) shall bear interest at a rate established by 
                the Secretary; and
                    ``(D) shall be subject to such other terms and 
                conditions as the Secretary may establish by 
                regulation.
            ``(3) Aggregate loan amount.--The aggregate amount of loans 
        under this subsection to a single provider may not exceed 
        $30,000.
    ``(j) Notification.--The Secretary shall take such actions as may 
be necessary to publicize the availability of the programs for mortgage 
insurance under this section and section 223(h), and the loan program 
under subsection (i) of this section, in a manner that ensures that 
information concerning such programs will be available to child care 
providers throughout the United States.
    ``(k) Regulations.--The Secretary shall--
            ``(1) issue any regulations necessary to carry out this 
        section; and
            ``(2) in carrying out paragraph (1), consult with the 
        Secretary of Health and Human Services with respect to any 
        aspects of the regulations regarding child care facilities.
    ``(l) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $30,000,000 for fiscal year 
2004, to remain available until expended, of which not more than 10 
percent may be used for loans under subsection (i).''.

SEC. 244. INSURANCE FOR MORTGAGES FOR ACQUISITION OR REFINANCING DEBT 
              OF EXISTING CHILD CARE FACILITIES.

    (a) In General.--Section 223 of the National Housing Act (12 U.S.C. 
1715n) is amended by adding at the end the following:
    ``(h) Mortgage Insurance for Purchase or Refinancing of Existing 
Child Care Facilities.--
            ``(1) Definitions.--In this subsection, the terms that are 
        defined in section 257(a) have the same meanings as in that 
        section.
            ``(2) Authority.--Notwithstanding any other provision of 
        this Act, the Secretary may insure under any section of this 
        title a mortgage executed in connection with--
                    ``(A) the purchase or refinancing of an existing 
                child care facility;
                    ``(B) the purchase of a structure to serve as a 
                child care facility; or
                    ``(C) the refinancing of existing debt of an 
                existing child care facility.
            ``(3) Purchase of existing facilities and structures.--In 
        the case of the purchase under this subsection of an existing 
        child care facility or purchase of an existing structure to 
        serve as such a facility, the Secretary shall prescribe any 
        terms and conditions that the Secretary considers necessary to 
        ensure that--
                    ``(A) the facility or structure purchased continues 
                to be used as a child care facility; and
                    ``(B) the facility complies with any laws, 
                standards, and requirements applicable to child care 
                facilities under the laws of the State, municipality, 
                or other unit of general local government in which the 
                facility is or is to be located.
            ``(4) Refinancing of existing facilities.--In the case of 
        refinancing of an existing child care facility, the Secretary 
        shall prescribe any terms and conditions that the Secretary 
        considers necessary to ensure that--
                    ``(A) the refinancing is used to lower the monthly 
                debt service costs (taking into account any fees or 
                charges connected with such refinancing) of the 
                existing facility;
                    ``(B) the proceeds of any refinancing will be 
                employed only to retire the existing indebtedness and 
                pay the necessary cost of refinancing on the existing 
                facility;
                    ``(C) the existing facility is economically viable; 
                and
                    ``(D) the facility receives a certification of 
                compliance under section 258(c).
            ``(5) Limitation on insurance authority.--The authority of 
        the Secretary to enter into commitments to insure mortgages 
        under this subsection is subject to section 257(f).''.

SEC. 245. STUDY OF AVAILABILITY OF SECONDARY MARKETS FOR MORTGAGES ON 
              CHILD CARE FACILITIES.

    (a) Study.--The Secretary of the Treasury shall conduct a study of 
the secondary mortgage markets to determine--
            (1) whether such a market exists for purchase of mortgages 
        eligible for insurance under sections 223(h) and 257 of the 
        National Housing Act (as added by this Act);
            (2) whether such a market would affect the availability of 
        credit available for development of child care facilities or 
        would lower development costs of such facilities; and
            (3) the extent to which such a market or other activities 
        to provide credit enhancement for loans for child care 
        facilities is needed to meet the demand for such facilities.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary of the Treasury shall submit to Congress a 
report regarding the results of the study conducted under this section.

SEC. 246. TECHNICAL AND FINANCIAL ASSISTANCE GRANTS.

    (a) Definitions.--In this section:
            (1) Child care facility.--The term ``child care facility'' 
        has the meaning given that term in section 257(a) of the 
        National Housing Act, as added by section 243.
            (2) Eligible intermediary.--The term ``eligible 
        intermediary'' means a private, nonprofit intermediary 
        organization that has demonstrated experience in--
                    (A) financing the construction and renovation of 
                physical facilities;
                    (B) providing technical and financial assistance to 
                child care providers or other similar entities;
                    (C) working with small businesses; and
                    (D) securing private sources for capital financing; 
                and
            (3) Eligible recipient.--The term ``eligible recipient'' 
        means any--
                    (A) existing or start-up center-based or home-based 
                child care provider; and
                    (B) organization in the process of establishing a 
                center-based or home-based child care program or 
                otherwise seeking to provide child care services.
            (4) Equipment.--The term ``equipment'' has the meaning 
        given that term in section 257(a) of the National Housing Act, 
        as added by section 243.
    (b) Grant Authority.--The Secretary of Housing and Urban 
Development, in consultation with the Secretary of Health and Human 
Services, may award grants on a competitive basis in accordance with 
this section to eligible intermediaries for use in accordance with 
subsections (e) and (f).
    (c) Applications.--To be eligible to receive a grant under this 
section an eligible intermediary shall submit to the Secretary an 
application, in such form and containing such information as the 
Secretary may require.
    (d) Priority.--In awarding grants under this section the Secretary 
shall give a priority to applicants under subsection (c) that serve 
low-income or rural areas.
    (e) Use of Funds.--
            (1) Revolving loan fund.--Each eligible intermediary that 
        receives a grant under this section shall deposit the grant 
        amount into a child care revolving loan fund established by the 
        eligible intermediary.
            (2) Payments from fund.--Subject to subsection (f), from 
        amounts deposited into the revolving loan fund under paragraph 
        (1), each eligible intermediary shall provide technical and 
        financial assistance (in the form of loans, grants, 
        investments, guarantees, interest subsidies, and other 
        appropriate forms of assistance) to eligible recipients for the 
        acquisition or improvement of child care facilities or 
        equipment.
            (3) Loan repayments and investment proceeds.--Any amount 
        received by an eligible intermediary from an eligible recipient 
        in the form of a loan repayment or investment proceeds shall be 
        deposited into the child care revolving fund of the eligible 
        intermediary for redistribution to other eligible recipients in 
        accordance with this section.
    (f) Allocation of Funds.--Of the amounts distributed from the 
revolving loan fund of an eligible intermediary under subsection (e)(2) 
in each fiscal year--
            (1) not less than 50 percent shall be used for the 
        renovation or construction of child care facilities or the 
        acquisition of equipment by eligible recipients, except that 
        the amount made available to any eligible recipient under this 
        paragraph may not exceed 40 percent of the total costs incurred 
        by the eligible recipient in connection with such renovation, 
        construction, or acquisition; and
            (2) the amount remaining after distribution under paragraph 
        (1), shall be used to provide direct assistance to eligible 
        recipients in obtaining public or private financing for the 
        renovation or construction of child care facilities and the 
        acquisition of equipment, including developing and implementing 
        financing resources, options, and plans for those recipients.
    (g) Davis Bacon Act.--Subchapter IV of chapter 31 of title 40, 
United States Code (popularly known as the Davis-Bacon Act) shall apply 
to actions taken under this Act.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 2004 through 2008.

        Subtitle D--Business Child Care Incentive Grant Program

SEC. 251. BUSINESS CHILD CARE INCENTIVE GRANT PROGRAM.

    (a) Establishment.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall establish a 
program to award grants to States, on a competitive basis, to assist 
States in providing funds to encourage the establishment and operation 
of employer operated child care programs.
    (b) Application.--To be eligible to receive a grant under this 
section, a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require, including an assurance that 
the funds required under subsection (e) will be provided.
    (c) Amount of Grant.--The Secretary shall determine the amount of a 
grant to a State under this section based on the population of children 
less than 5 years of age in the State as compared to the population of 
all States receiving grants under this section.
    (d) Use of Funds.--
            (1) In general.--A State shall use amounts provided under a 
        grant awarded under this section to provide assistance to 
        businesses located in the State to enable the businesses to 
        establish and operate child care programs. Such assistance may 
        include--
                    (A) technical assistance in the establishment of a 
                child care program;
                    (B) assistance for the startup costs related to a 
                child care program;
                    (C) assistance for the training of child care 
                providers;
                    (D) scholarships for low-income wage earners;
                    (E) the provision of services to care for sick 
                children or to provide care to school aged children;
                    (F) the entering into of contracts with local 
                resource and referral or local health departments;
                    (G) assistance for care for children with 
                disabilities; or
                    (H) assistance for any other activity determined 
                appropriate by the State.
            (2) Application.--To be eligible to receive assistance from 
        a State under this section, a business shall prepare and submit 
        to the State an application at such time, in such manner, and 
        containing such information as the State may require.
            (3) Preference.--
                    (A) In general.--In providing assistance under this 
                section, a State shall give priority to applicants that 
                desire to form a consortium to provide child care in a 
                geographic area within the State where such care is not 
                generally available or accessible.
                    (B) Consortium.--For purposes of subparagraph (A), 
                a consortium shall be made up of 2 or more entities 
                that may include businesses, nonprofit agencies or 
                organizations, local governments, or other appropriate 
                entities.
            (4) Limitation.--With respect to grant funds received under 
        this section, a State may not provide in excess of $100,000 in 
        assistance from such funds to any single applicant.
    (e) Matching Requirement.--To be eligible to receive a grant under 
this section a State shall provide assurances to the Secretary that, 
with respect to the costs to be incurred by an entity receiving 
assistance in carrying out activities under this section, the entity 
will make available (directly or through donations from public or 
private entities) non-Federal contributions to such costs in an amount 
equal to--
            (1) for the first fiscal year in which the entity receives 
        such assistance, not less than 50 percent of such costs ($1 for 
        each $1 of assistance provided to the entity under the grant);
            (2) for the second fiscal year in which the entity receives 
        such assistance, not less than 66\2/3\ percent of such costs 
        ($2 for each $1 of assistance provided to the entity under the 
        grant); and
            (3) for the third fiscal year in which the entity receives 
        such assistance, not less than 75 percent of such costs ($3 for 
        each $1 of assistance provided to the entity under the grant).
    (f) Requirements of Providers.--To be eligible to receive 
assistance under a grant awarded under this section a child care 
provider shall comply with all applicable State and local licensing and 
regulatory requirements and all applicable health and safety standards 
in effect in the State.
    (g) Administration.--
            (1) State responsibility.--A State shall have 
        responsibility for administering a grant awarded for the State 
        under this section and for monitoring entities that receive 
        assistance under such grant.
            (2) Audits.--A State shall require each entity receiving 
        assistance under the grant awarded under this section to 
        conduct an annual audit with respect to the activities of the 
        entity. Such audits shall be submitted to the State.
            (3) Misuse of funds.--
                    (A) Repayment.--If the State determines, through an 
                audit or otherwise, that an entity receiving assistance 
                under a grant awarded under this section has misused 
                the assistance, the State shall notify the Secretary of 
                the misuse. The Secretary, upon such a notification, 
                may seek from such an entity the repayment of an amount 
                equal to the amount of any such misused assistance plus 
                interest.
                    (B) Appeals process.--The Secretary shall by 
                regulation provide for an appeals process with respect 
                to repayments under this paragraph.
    (h) Reporting Requirements.--
            (1) 2-year study.--
                    (A) In general.--Not later than 2 years after the 
                date on which the Secretary first awards grants under 
this section, the Secretary shall conduct a study to determine--
                            (i) the capacity of entities to meet the 
                        child care needs of communities within States;
                            (ii) the kinds of partnerships that are 
                        being formed with respect to child care at the 
                        local level to carry out programs funded under 
                        this section; and
                            (iii) who is using the programs funded 
                        under this section and the income levels of 
                        such individuals.
                    (B) Report.--Not later than 28 months after the 
                date on which the Secretary first awards grants under 
                this section, the Secretary shall prepare and submit to 
                the appropriate committees of Congress a report on the 
                results of the study conducted in accordance with 
                subparagraph (A).
            (2) 4-year study.--
                    (A) In general.--Not later than 4 years after the 
                date on which the Secretary first awards grants under 
                this section, the Secretary shall conduct a study to 
                determine the number of child care facilities funded 
                through entities that received assistance through a 
                grant awarded under this section that remain in 
                operation and the extent to which such facilities are 
                meeting the child care needs of the individuals served 
                by such facilities.
                    (B) Report.--Not later than 52 months after the 
                date on which the Secretary first awards grants under 
                this section, the Secretary shall prepare and submit to 
                the appropriate committees of Congress a report on the 
                results of the study conducted in accordance with 
                subparagraph (A).
    (i) Definition.--In this section, the term ``business'' means an 
employer who employed an average of at least 2 employees on business 
days during the preceding calendar year.
    (j) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        carry out this section, $60,000,000 for the period of fiscal 
        years 2004 through 2006.
            (2) Evaluations and administration.--With respect to the 
        total amount appropriated for such period in accordance with 
        this subsection, not more than $5,000,000 of that amount may be 
        used for expenditures related to conducting evaluations 
        required under, and the administration of, this section.
    (k) Termination of Program.--The program established under 
subsection (a) shall terminate on September 30, 2007.

      TITLE III--PRE-SCHOOL, IN-SCHOOL, AND AFTERSCHOOL ASSISTANCE

               Subtitle A--Universal Prekindergarten Act

SEC. 301. SHORT TITLE.

     This subtitle may be cited as the ``Universal Prekindergarten 
Act''.

SEC. 302. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) High-quality prekindergarten programs help children to 
        succeed academically. Children who attended a high-quality 
        prekindergarten program have higher academic achievement, lower 
        rates of grade retention, are less likely to be placed in 
        special education, and graduate from high school at higher 
        rates than those who did not.
            (2) Early childhood education can reduce juvenile 
        delinquency rates. A 15-year study following 989 low-income 
        children who attended high-quality, comprehensive 
        prekindergarten found that they were 33 percent less likely to 
        be arrested, and 42 percent less likely to be arrested for a 
        violent crime, than children in the control group.
            (3) There is currently a drastic shortage of affordable, 
        quality early education programs that are accessible for 
        working families.
            (4) Full-day, full-calendar-year universal prekindergarten 
        programs would ensure all children 3, 4, and 5 years old have 
        access to school readiness programs and quality child care.
            (5) Research shows that investing in quality 
        prekindergarten programs will provide savings in the form of 
        reduced need for remedial education, decreased crime rates, 
        lower school dropout rates, and decreased welfare dependence.
    (b) Purpose.--The purpose of this subtitle is to ensure that all 
children 3, 4, and 5 years old have access to a high-quality full-day, 
full-calendar-year prekindergarten program by providing grants to 
States to assist in developing a universal prekindergarten program that 
is voluntary and free-of-charge.

SEC. 303. PREKINDERGARTEN GRANT PROGRAM AUTHORIZATION.

     The Secretary of Health and Human Services, in consultation with 
the Secretary of Education, shall provide grants to an agency 
designated by each State (hereafter in this subtitle referred to as the 
``designated State agency'') for the development of high-quality full-
day, full-calendar-year universal prekindergarten programs for all 
children 3, 4, and 5 years old in the State.

SEC. 304. STATE REQUIREMENTS.

    (a) State Matching Funds.--Federal funds made available to a 
designated State agency under this subtitle shall be matched at least 
20 percent by State funds.
    (b) State Application.--To be eligible to receive funds under this 
subtitle, a designated State agency shall submit an application at such 
time, in such manner, and containing such information as the Secretary 
of Health and Human Services may require. The application shall include 
the following:
            (1) How the designated State agency, in overseeing the 
        State's universal prekindergarten program, will coordinate with 
        other State agencies responsible for early childhood education 
        and health programs.
            (2) A State plan to establish and implement a statewide 
        universal prekindergarten program, in accordance with 
        subsection (c).
    (c) State Plan.--The State plan required under subsection (b)(2) 
shall include each of the following:
            (1) A description of the universal prekindergarten program 
        that will be established and how it will support children's 
        cognitive, social, emotional, and physical development.
            (2) A statement of the goals for universal prekindergarten 
        programs and how program outcomes will be measured.
            (3) A description of--
                    (A) how funding will be distributed to eligible 
                prekindergarten program providers based on the need for 
                early childhood education in each geographical area 
                served by such providers; and
                    (B) how the designated State agency will involve 
                representatives of early childhood program providers 
                (including child care providers, Head Start programs, 
                and State and local agencies) that sponsor programs 
                addressing children 3, 4, and 5 years old.
            (4) A description of how the designated State agency will 
        coordinate with existing State-funded prekindergarten programs, 
        federally funded programs (such as Head Start programs), public 
        school programs, and child care providers.
            (5) A description of how an eligible prekindergarten 
        program provider may apply to the designated State agency for 
        funding under this Act.
            (6) A plan to address the shortages of qualified early 
        childhood education teachers, including how to increase such 
        teachers' compensation to be comparable to that of public 
        school teachers.
            (7) How the designated State agency will provide ongoing 
        professional development opportunities to help increase the 
        number of teachers in early childhood programs who meet the 
        State's education or credential requirements for 
        prekindergarten teachers.
            (8) A plan to address how the universal prekindergarten 
        program will meet the needs of children with disabilities, 
        limited English proficiency, and other special needs.
            (9) A plan to provide transportation to children to and 
        from the universal prekindergarten program.
            (10) A description of how the State will provide the 20 
        percent match of Federal funds.
    (d) Administration.--A designated State agency may not use more 
than 5 percent of a grant under this subtitle for costs associated with 
State administration of the program under this subtitle.

SEC. 305. LOCAL REQUIREMENTS.

    (a) In General.--An eligible prekindergarten program provider 
receiving funding under this subtitle shall--
            (1) maintain a maximum class size of 20 children;
            (2) maintain a ratio of not more than 10 children for each 
        member of the teaching staff;
            (3)(A) ensure that all prekindergarten teachers meet the 
        requirements for teachers at a State-funded prekindergarten 
        program under an applicable State law; and
            (B) document that the State is demonstrating significant 
        progress in assisting prekindergarten teachers on working 
        toward a bachelor of arts degree with training in early 
        childhood development or early childhood education;
            (4)(A) be accredited by a national organization with 
        demonstrated experience in accrediting prekindergarten 
        programs; or
            (B) provide assurances that it shall obtain such 
        accreditation not later than 3 years after first receiving 
        funding under this subtitle; and
            (5) meet applicable State and local child care licensing 
        health and safety standards.
    (b) Local Application.--Eligible prekindergarten program providers 
desiring to receive funding under this subtitle shall submit an 
application to the designated State agency overseeing funds under this 
subtitle containing the following:
            (1) A description of the prekindergarten program.
            (2) A statement of the demonstrated need for a program, or 
        an enhanced or expanded program, in the area served by the 
        eligible prekindergarten program provider.
            (3) A description of the age-appropriate and 
        developmentally appropriate educational curriculum to be 
        provided that will help children be ready for school and assist 
        them in the transition to kindergarten.
            (4) A description of how the eligible prekindergarten 
        program provider will collaborate with existing community-based 
        child care providers and Head Start programs.
            (5) A description of how students and families will be 
        assisted in obtaining supportive services available in their 
        communities.
            (6) A plan to promote parental involvement in the 
        prekindergarten program.
            (7) A description of how teachers will receive ongoing 
        professional development in early childhood development and 
        education.
            (8) An assurance that prekindergarten programs receiving 
        funds under this subtitle provide the data required in section 
        7(c).

SEC. 306. PROFESSIONAL DEVELOPMENT SET-ASIDE.

    (a) In General.--A designated State agency may set aside up to 5 
percent of a grant under this subtitle for ongoing professional 
development activities for teachers and staff at prekindergarten 
programs that wish to participate in the universal prekindergarten 
grant program under this subtitle. A designated State agency using the 
set-aside for professional development must include in its application 
the following:
            (1) A description of how the designated State agency will 
        ensure that eligible prekindergarten program providers in a 
        range of settings (including child care providers, Head Start 
        programs, and schools) will participate in the professional 
        development programs.
            (2) An assurance that, in developing its application and in 
        carrying out its program, the professional development provider 
        has consulted, and will consult, with relevant agencies, early 
        childhood organizations, early childhood education experts, and 
        early childhood program providers.
            (3) A description of how the designated State agency will 
        ensure that the professional development is ongoing and 
        accessible to educators in all geographic areas of the State, 
        including by the use of advanced educational technologies.
            (4) A description of how the designated State agency will 
        ensure that such set-aside funds will be used to pay the cost 
        of additional education and training.
            (5) A description of how the designated State agency will 
        work with other agencies and institutions of higher education 
        to provide scholarships and other financial assistance to 
        prekindergarten staff.
            (6) A description of how the State educational agency will 
        provide a financial incentive, such as a financial stipend or a 
        bonus, to educators who participate in and complete such 
        professional development.
            (7) A description of how the professional development 
        activities will be carried out, including the following:
                    (A) How programs and educators will be selected to 
                participate.
                    (B) How professional development providers will be 
                selected, based on demonstrated experience in providing 
                research-based professional development to early 
                childhood educators.
                    (C) The types of research-based professional 
                development activities that will be carried out in all 
                domains of children's physical, cognitive, social, and 
                emotional development and on early childhood pedagogy.
                    (D) How the program will train early childhood 
                educators to meet the diverse educational needs of 
                children in the community, especially children who have 
                limited English proficiency, disabilities, and other 
                special needs.
                    (E) How the program will coordinate with and build 
                upon, but not supplant or duplicate, early childhood 
                education professional development activities that 
                exist in the community.
    (b) Uses of Funds.--Funds set aside under this section may be used 
for ongoing professional development--
            (1) to provide prekindergarten teachers and staff with the 
        knowledge and skills for the application of recent research on 
        child cognitive, social, emotional, and physical development, 
        including language and literacy development, and on early 
        childhood pedagogy;
            (2) to provide the cost of education needed to obtain a 
        credential or degree with specific training in early childhood 
        development or education;
            (3) to work with children who have limited English 
        proficiency, disabilities, and other special needs; and
            (4) to select and use developmentally appropriate screening 
        and diagnostic assessments to improve teaching and learning and 
        make appropriate referrals for services to support 
        prekindergarten children's development and learning.

SEC. 307. REPORTING.

    (a) Report by Secretary.--For each year in which funding is 
provided under this subtitle, the Secretary of Health and Human 
Services shall submit an annual report to the Congress on the 
implementation and effectiveness of the universal prekindergarten 
program under this subtitle.
    (b) Report by Designated State Agency.--Each designated State 
agency that provides grants to eligible prekindergarten program 
providers under this subtitle shall submit to the Secretary an annual 
report on the implementation and effectiveness of the programs in the 
State supported under this subtitle. Such report shall contain such 
additional information as the Secretary may reasonably require.
    (c) Report by Grant Recipient.--Each eligible prekindergarten 
program provider that receives a grant under this subtitle shall submit 
to the designated State agency an annual report that includes, with 
respect to the program supported by such grant, the following:
            (1) A description of the type of program and a statement of 
        the number and ages of children served by the program, as well 
        as the number and ages of children with a disability or a 
        native language other than English.
            (2) A description of the qualifications of the program 
        staff and the type of ongoing professional development provided 
        to such staff.
            (3) A statement of all sources of Federal, State, local, 
        and private funds received by the program.
            (4) A description of the curricula, materials, and 
        activities used by the program to support early childhood 
        development and learning.
            (5) Such other information as the designated State agency 
        may reasonably require.

SEC. 308. FEDERAL FUNDS SUPPLEMENTARY.

     Funds made available under this subtitle may not be used to 
supplant other Federal, State, local, or private funds that would, in 
the absence of such Federal funds, be made available for the program 
assisted under this subtitle.

SEC. 309. DEFINITIONS.

     In this subtitle:
            (1) The term ``eligible prekindergarten program provider'' 
        means a prekindergarten program provider that is--
                    (A) a school;
                    (B) supported, sponsored, supervised, or carried 
                out by a local educational agency;
                    (C) a Head Start program; or
                    (D) a child care provider.
            (2) The term ``prekindergarten program'' means a program 
        serving children 3, 4, and 5 years old that supports children's 
        cognitive, social, emotional, and physical development and 
        helps prepare those children for the transition to 
        kindergarten.
            (3) The term ``local educational agency'' has the meaning 
        given that term in the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 6301 et seq.).
            (4) The term ``prekindergarten teacher'' means an 
        individual who has received, or is working toward, a bachelor 
        of arts degree in early childhood education.

SEC. 310. AUTHORIZATION OF APPROPRIATIONS.

     There are authorized to be appropriated to carry out this 
subtitle--
            (1) $10,000,000,000 for fiscal year 2003;
            (2) $20,000,000,000 for fiscal year 2004;
            (3) $30,000,000,000 for fiscal year 2005;
            (4) $40,000,000,000 for fiscal year 2006; and
            (5) $50,000,000,000 for fiscal year 2007.

          Subtitle B--Universal Free School Breakfast Program

SEC. 311. UNIVERSAL FREE SCHOOL BREAKFAST PROGRAM.

    (a) Free Breakfast and Universal Eligibility.--Section 4 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1773) is amended to read as 
follows:

``SEC. 4. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

    ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to enable the Secretary to 
carry out a program to assist States and the Department of Defense to 
initiate, maintain, or expand nonprofit breakfast programs to provide 
free breakfasts to school children without regard to family income in 
all schools which make application for participation and agree to carry 
out a nonprofit free breakfast program in accordance with this Act. 
Appropriations and expenditures for this Act shall be considered Health 
and Human Services functions for budget purposes rather than functions 
of Agriculture.
    ``(b) Apportionment to States.--
            ``(1)(A) In general.--The Secretary shall make breakfast 
        payments to each State educational agency each fiscal year, at 
        such times as the Secretary may determine, from the sums 
        appropriated for such purpose, in an amount equal to the 
        product obtained by multiplying--
                    ``(i) the number of breakfasts served free during 
                such fiscal year to children in schools in such States 
                which participate in the school breakfast program under 
                agreements with such State educational agency; by
                    ``(ii) the national breakfast payment as prescribed 
                in paragraph (2) of this subsection.
            ``(B) Agreements.--The agreements described in subparagraph 
        (A)(i) shall be permanent agreements that may be amended as 
        necessary. Nothing in the preceding sentence shall be construed 
        to limit the ability of the State educational agency to suspend 
        or terminate any such agreement in accordance with regulations 
        prescribed by the Secretary.
            ``(2) National breakfast payment.--The national payment for 
        each breakfast shall be $1.40 (as adjusted each July 1 pursuant 
        to section 11(a)(3)(B) of the Richard B. Russell National 
        School Lunch Act (42 U.S.C. 1759a(a)(3)(B)).
            ``(3) Limitation.--No breakfast payment may be made under 
        this subsection for any breakfast served by a school unless 
        such breakfast consists of a combination of foods which meet 
        the minimum nutritional requirements prescribed by the 
        Secretary under subsection (e) of this section.
            ``(4) Nutrition quality adjustment.--The Secretary shall 
        increase by 6 cents the annually adjusted payment for each 
        breakfast served under this Act and section 17 of the Richard 
        B. Russell National School Lunch Act. These funds shall be used 
        to assist States, to the extent feasible, in improving the 
        nutritional quality of the breakfasts.
            ``(5) Agricultural commodities.--Notwithstanding any other 
        provision of law, whenever stocks of agricultural commodities 
        are acquired by the Secretary or the Commodity Credit 
        Corporation and are not likely to be sold by the Secretary or 
        the Commodity Credit Corporation or otherwise used in programs 
        of commodity sale or distribution, the Secretary shall make 
        such commodities available to school food authorities and 
        eligible institutions serving breakfasts under this Act in a 
        quantity equal in value to not less than 3 cents for each 
        breakfast served under this Act.
            ``(6) Effect on expenditures.--Expenditures of funds from 
        State and local sources for the maintenance of the breakfast 
        program shall not be diminished as a result of funds or 
        commodities received under paragraph (4) or (5).
    ``(c) State Disbursement to Schools.--Funds paid to any State 
during any fiscal year for the purpose of this section shall be 
disbursed by the State educational agency, in accordance with such 
agreements approved by the Secretary as may be entered into by such 
State agency and the schools in the State, to those schools in the 
State which the State educational agency, determines are eligible to 
participate in the school breakfast program.
    ``(d) Participation by Schools.--
            ``(1) Requirements for participation.--To be eligible to 
        participate in the school breakfast program under this section, 
        a school food authority shall--
                    ``(A) agree to serve all breakfasts at no charge to 
                all students who wish to participate without regard to 
                family income in all participating schools; and
                    ``(B) meet all other requirements that the 
                Secretary may reasonably establish.
            ``(2) Start-up assistance.--The Secretary is authorized to 
        provide additional assistance to schools not participating in 
        the school breakfast program prior to the enactment of the 
        Family and Workplace Balancing Act of 2004 in order to assist 
such schools to begin participation in the school breakfast program 
under this section.
            ``(3) State educational agency assistance.--Each State 
        educational agency shall assist schools not participating in 
        the school breakfast program prior to the enactment of the 
        Family and Workplace Balancing Act of 2004 to enter into 
        agreements with such agencies in order to participate in the 
        school breakfast program under this section.
    ``(e) Nutritional and Other Program Requirements.--
            ``(1) Minimum nutritional requirements.--Breakfasts served 
        by schools participating in the school breakfast program under 
        this section shall consist of a combination of foods and shall 
        meet minimum nutritional requirements prescribed by the 
        Secretary on the basis of tested nutritional research, except 
        that the minimum nutritional requirements shall be measured by 
        not less than the weekly average of the nutrient content of 
        school breakfasts.
            ``(2) Technical assistance and training.--The Secretary 
        shall provide through State educational agencies technical 
        assistance and training, including technical assistance and 
        training in the preparation of foods high in complex 
        carbohydrates and lower-fat versions of foods commonly used in 
        the school breakfast program established under this section, to 
        schools participating in the school breakfast program to assist 
        the schools in complying with the nutritional requirements 
        prescribed by the Secretary pursuant to paragraph (1) and in 
        providing appropriate meals to children with medically 
        certified special dietary needs.
            ``(3) Option versus serve.--At the option of a local school 
        food authority, a student in a school under the authority that 
        participates in the school breakfast program under this Act may 
        be allowed to refuse not more than one item of a breakfast that 
        the student does not intend to consume. A refusal of an offered 
        food item shall not affect the amount of payments made under 
        this Act to a school for the breakfast.''.
    (b) Technical Amendments.--
            (1) Child nutrition act of 1966.--Section 20 of the Child 
        Nutrition Act of 1966 (42 U.S.C. 1789) is amended by striking 
        subsection (b) and redesignating subsections (c) through (e) as 
        subsections (b) through (d), respectively.
            (2) Richard b. russell national school lunch act.--The 
        Richard B. Russell National School Lunch Act is amended--
                    (A) in section 9(b)--
                            (i) in paragraph (2)(C)(ii), by striking 
                        ``or breakfasts''; and
                            (ii) in paragraph (6)(A), by striking ``and 
                        breakfast'';
                    (B) in section 11(a)(1)--
                            (i) in subparagraph (C), by striking ``or 
                        breakfasts'' each place it appears;
                            (ii) in subparagraph (C)(i)(I), by striking 
                        ``or in the case of a school'' and all that 
                        follows through ``4 successive school years'';
                            (iii) in subparagraph (D)(iii), by striking 
                        ``or for free and reduced price lunches and 
                        breakfasts'';
                            (iv) in subparagraph (D)(iv), by striking 
                        ``or school breakfast'';
                            (v) in subparagraph (E)(i)(I) by striking 
                        ``or in the case of a school'' and all that 
                        follows through ``4 successive school years''; 
                        and
                            (vi) in subparagraph (E)(i)(II)--
                                    (I) by striking ``or breakfasts'' 
                                both places it appears; and
                                    (II) by striking ``or school 
                                breakfast'';
                    (C) in section 11(a)(3)(A), by striking clause 
                (iii);
                    (D) in section 13(a)(1)(C), by striking ``or 
                breakfasts'';
                    (E) in section 17--
                            (i) in subsection (c), by striking 
                        paragraph (2), and redesignating paragraphs (3) 
                        through (6) as paragraphs (2) through (5), 
                        respectively; and
                            (ii) in subsection (f)(3)(E)(ii(I), by 
                        striking ``meals'' and inserting ``lunches''; 
                        and
                    (F) in section 18, by striking subsection (e) and 
                redesignating subsections (f) and (g) as subsections 
                (e) and (f), respectively.

  Subtitle C--Nutritional Improvement for Children Served Under Child 
                           Nutrition Programs

SEC. 321. NUTRITIONAL IMPROVEMENT FOR CHILDREN SERVED UNDER CHILD 
              NUTRITION PROGRAMS

    (a) In General.--Section 18 of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1769) is amended by adding at the end the 
following:
    ``(h) Healthy School Nutrition Environment Incentive Grants.--
            ``(1) In general.--The Secretary shall establish a program 
        under which the Secretary shall make competitive grants to 
        selected local educational agencies--
                    ``(A) to create healthy school nutrition 
                environments; and
                    ``(B) to assess the impact of the environments on 
                the health and well-being of children enrolled in the 
                schools.
            ``(2) Selection of schools.--In selecting local educational 
        agencies to receive incentive grants under this subsection, the 
        Secretary shall--
                    ``(A) ensure that not less than 75 percent of the 
                schools under the jurisdiction of the agencies selected 
                to participate in the program established under this 
                subsection are schools in which not less than 50 
                percent of the students enrolled in each school are 
                eligible for free or reduced price meals under this 
                Act;
                    ``(B) ensure that, of the agencies selected to 
                participate in the program, there is appropriate 
                representation of rural, urban, and suburban schools, 
                as determined by the Secretary;
                    ``(C) ensure that, of the agencies selected to 
                participate in the program, there is appropriate 
                representation of elementary, middle, and secondary 
                schools, as determined by the Secretary;
                    ``(D) ensure that agencies selected to receive a 
                grant under this subsection meet the requirements of 
                paragraph (3);
                    ``(E) give priority to agencies that develop 
                comprehensive plans that include the involvement of a 
                broad range of community stakeholders in achieving 
                healthy school nutrition environments;
                    ``(F) give priority to agencies that develop 
                comprehensive plans that include a strategy for 
                maintaining healthy school nutrition environments in 
                the years following the fiscal years for which the 
                agencies receive grants under this subsection;
                    ``(G) select only agencies that submit grant 
                applications by May 1, 2004; and
                    ``(H) make grant awards effective not later than 
                July 15, 2004.
            ``(3) Requirements.--
                    ``(A) Input.--Prior to the solicitation of 
                proposals for grants under this subsection, the 
                Secretary shall solicit input from appropriate 
                nutrition, health, and education organizations (such as 
                the American School Food Service Association, the 
                American Dietetic Association, and the National School 
                Boards Association) regarding the appropriate criteria 
                for a healthy school environment.
                    ``(B) Criteria for healthy school environments.--
                The Secretary shall, taking into account input received 
                under subparagraph (A), establish criteria for defining 
                a healthy school environment, including criteria that--
                            ``(i) provide program meals that meet 
                        nutritional standards for breakfasts and 
                        lunches established by the Secretary;
                            ``(ii) ensure that all food served 
                        (including food served in participating schools 
                        and service institutions in competition with 
                        the programs authorized under this Act and the 
                        Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
                        seq.)) on school grounds during regular school 
                        hours is consistent with the nutritional 
                        standards for breakfasts and lunches 
                        established by the Secretary;
                            ``(iii) promote the consumption of fruits 
                        and vegetables;
                            ``(iv) provide nutrition education to 
                        students and staff; and
                            ``(v) meet other criteria established by 
                        the Secretary.
                    ``(C) Plans.--To be eligible to receive a grant 
                under this subsection, a local educational agency shall 
                submit to the Secretary a healthy school nutrition 
                environment plan that describes the actions the schools 
                under the jurisdiction of such agency will take to meet 
                the criteria established under subparagraph (B).
            ``(4) Grants.--For each of fiscal years 2005 through 2008, 
        the Secretary shall make a grant to each agency selected under 
        paragraph (2).
            ``(5) Evaluations.--
                    ``(A) In general.--The Secretary, acting through 
                the Administrator of the Food and Nutrition Service, 
                shall conduct an evaluation of a representative sample 
                of schools that receive grants under this subsection.
                    ``(B) Content.--The evaluation shall measure, at a 
                minimum, the effects of a healthy school nutrition 
                environment on--
                            ``(i) overweight children and obesity;
                            ``(ii) dietary intake;
                            ``(iii) nutrition education and behavior;
                            ``(iv) the adequacy of time to eat;
                            ``(v) physical activities;
                            ``(vi) parental and student attitudes and 
                        participation; and
                            ``(vii) related funding issues, including 
                        the cost of maintaining a healthy school 
                        nutrition environment.
                    ``(C) Reports.--The Secretary shall submit to the 
                Committee on Education and the Workforce of the House 
of Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate--
                            ``(i) not later than December 31, 2005, an 
                        interim report on the activities of schools 
                        evaluated under this subsection; and
                            ``(ii) not later than December 31, 2007, a 
                        final report on the activities of schools 
                        evaluated under this subsection.
            ``(6) Funding.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary of Agriculture 
                to carry out this subsection--
                            ``(i) on October 1, 2003, $10,000,000; and
                            ``(ii) on October 1, 2004, and each October 
                        1 thereafter through October 1, 2006, 
                        $35,000,000.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                carry out this section the funds transferred under 
                subparagraph (A), without further appropriation.
                    ``(C) Availability of funds.--Funds transferred 
                under subparagraph (A) shall remain available until 
                expended.
                    ``(D) Evaluations.--Of the funds made available 
                under this paragraph, the Secretary shall use not more 
                than $5,000,000 to conduct evaluations under paragraph 
                (5).''.
    (b) Competitive Foods in Schools.--
            (1) In general.--Section 10 of the Child Nutrition Act of 
        1966 (42 U.S.C. 1779) is amended--
                    (A) in subsection (a), by striking ``, including'' 
                and all that follows through ``Lunch Act''; and
                    (B) by striking subsection (b) and inserting the 
                following:
    ``(b) Competitive Foods in Schools.--
            ``(1) In general.--The regulations under subsection (a) may 
        include provisions that regulate the service of food in 
        participating schools and service institutions in competition 
        with the programs authorized under this Act and the Richard B. 
        Russell National School Lunch Act (42 U.S.C. 1751 et seq.) 
        (referred to in this subsection as `competitive foods').
            ``(2) Regulations.--The regulations promulgated under 
        paragraph (1)--
                    ``(A) shall apply to all school grounds during the 
                duration of the school day;
                    ``(B) shall not supersede or otherwise affect State 
                and local regulations on competitive foods that, as 
                determined by the Secretary, conform to the nutritional 
                goals of the regulations promulgated by the Secretary;
                    ``(C) shall require that the proceeds from the sale 
                of competitive foods in schools be used for the benefit 
                of the schools or of organizations of students approved 
                by the schools, if those sales are allowed by the 
                regulations;
                    ``(D) shall take into account the differing needs 
                of--
                            ``(i) elementary schools;
                            ``(ii) middle schools and junior high 
                        schools; and
                            ``(iii) high schools; and
                    ``(E) shall implement the recommendations of the 
                Institute of Medicine made under paragraph (3).
            ``(3) Institute of medicine recommendations.--
                    ``(A) In general.--The Secretary of Agriculture 
                shall offer to enter into an agreement with the 
                Institute of Medicine of the National Academy of 
                Sciences under which the Institute of Medicine, based 
                on sound nutritional science, shall make 
                recommendations to the Secretary regarding the 
                regulation of competitive foods (as defined in section 
                10(b)(1) of the Child Nutrition Act of 1966 (as amended 
                by paragraph (1)(B))).
                    ``(B) Regulations.--Not later than 1 year after the 
                date of receipt of final recommendations from the 
                Institute of Medicine, the Secretary shall promulgate 
                regulations to carry out section 10(b) of the Child 
                Nutrition Act of 1966 (as amended by paragraph (1)(B)) 
                in accordance with the recommendations of the Institute 
                of Medicine.
                    ``(C) Report.--Not later than 1 year after the date 
                of receipt of final recommendations from the Institute 
                of Medicine, the Secretary shall submit to the 
                Committee on Education and the Workforce of the House 
                of Representatives and the Committee on Agriculture, 
                Nutrition, and Forestry of the Senate a report that 
                describes the actions of the Secretary under 
                subparagraph (B).''.

             Subtitle D--Child and Adult Care Food Program

SEC. 331. REIMBURSEMENTS FOR AFTERSCHOOL DINNERS.

    Section 17(r) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1766(r)) is amended by striking paragraph (5).

SEC. 332. ELIGIBILITY OF PRIVATE CHILD CARE CENTERS.

    Section 17(a)(2)(B)(i) is amended by striking ``during the period'' 
and all that follows through ``September 30, 2002''.

           Subtitle E--Afterschool Education Enhancement Act

SEC. 341. SHORT TITLE.

    This subtitle may be cited as the ``Afterschool Education 
Enhancement Act''.

SEC. 342. AMENDMENTS REGARDING 21ST CENTURY COMMUNITY LEARNING CENTERS.

    Part B of title IV of the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 7171 et seq.) is amended--
            (1) in subsection (a) of section 4203--
                    (A) by striking paragraph (3); and
                    (B) by redesignating paragraphs (4) through (14) as 
                paragraphs (3) through (13), respectively; and
            (2) in section 4204--
                    (A) in paragraph (2) of subsection (b)--
                            (i) by striking subparagraph (F); and
                            (ii) by redesignating subparagraphs (G) 
                        through (N) as subparagraphs (F) through (M), 
                        respectively; and
                    (B) by amending paragraph (1) of subsection (i) to 
                read as follows:
            ``(1) In general.--In awarding grants under this part, a 
        State educational agency shall give priority to applications 
        submitted jointly by eligible entities consisting of not less 
        than--
                    ``(A) 1 local educational agency receiving funds 
                under part A of title I; and
                    ``(B) 1 community-based organization or other 
                public or private entity.''.

             TITLE IV--IMPROVING THE WORKPLACE FOR FAMILIES

          Subtitle A--Part-Time and Temporary Workers Benefits

SEC. 401. TREATMENT OF EMPLOYEES WORKING AT LESS THAN FULL-TIME UNDER 
              PARTICIPATION, VESTING, AND ACCRUAL RULES GOVERNING 
              PENSION PLANS.

    (a) Participation Rules.--
            (1) In general.--Section 202(a)(3) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1052(a)(3)) 
        is amended by adding at the end the following new subparagraph:
    ``(E)(i) For purposes of this paragraph, in the case of any 
employee who, as of the beginning of the 12-month period referred to in 
subparagraph (A)--
                    ``(I) has customarily completed 500 or more hours 
                of service per year but less than 1,000 hours of 
                service per year, or
                    ``(II) is employed in a type of position in which 
                employment customarily constitutes 500 or more hours of 
                service per year but less than 1,000 hours of service 
                per year,
        completion of 500 hours of service within such 12-month period 
        shall be treated as completion of 1,000 hours of service.
    ``(ii) For purposes of this subparagraph, the extent to which 
employment in any type of position customarily constitutes less than 
1,000 hours of service per year shall be determined with respect to 
each pension plan in accordance with such regulations as the Secretary 
may prescribe providing for consideration of facts and circumstances 
peculiar to the work-force constituting the participants in such 
plan.''.
            (2) Conforming amendment.--Section 204(b)(1)(E) of such Act 
        (29 U.S.C. 1054(b)(1)(E)) is amended by striking ``section 
        202(a)(3)(A)'' and inserting ``subparagraphs (A) and (E) of 
        section 202(a)(3)''.
    (b) Vesting Rules.--
            (1) In general.--Section 203(b)(2) of such Act (29 U.S.C. 
        1053(b)(2)) is amended by adding at the end the following new 
        subparagraph:
    ``(E)(i) For purposes of this paragraph, in the case of any 
employee who, as of the beginning of the period designated by the plan 
pursuant to subparagraph (A)--
                    ``(I) has customarily completed 500 or more hours 
                of service per year but less than 1,000 hours of 
                service per year, or
                    ``(II) is employed in a type of position in which 
                employment customarily constitutes 500 or more hours of 
                service per year but less than 1,000 hours of service 
                per year,
        completion of 500 hours of service within such period shall be 
        treated as completion of 1,000 hours of service.
    ``(ii) For purposes of this subparagraph, the extent to which 
employment in any type of position customarily constitutes less than 
1,000 hours of service per year shall be determined with respect to 
each pension plan in accordance with such regulations as the Secretary 
may prescribe providing for consideration of facts and circumstances 
peculiar to the work-force constituting the participants in such 
plan.''.
            (2) 1-year breaks in service.--Section 203(b)(3) of such 
        Act (29 U.S.C. 1053(b)(3)) is amended by adding at the end the 
        following new subparagraph:
    ``(F)(i) For purposes of this paragraph, in the case of any 
employee who, as of the beginning of the period designated by the plan 
pursuant to subparagraph (A)--
            ``(I) has customarily completed 500 or more hours of 
        service per year but less than 1,000 hours of service per year, 
        or
            ``(II) is employed in a type of position in which 
        employment customarily constitutes 500 or more hours of service 
        per year but less than 1,000 hours of service per year,
completion of 250 hours of service within such period shall be treated 
as completion of 500 hours of service.
    ``(ii) For purposes of this subparagraph, the extent to which 
employment in any type of position customarily constitutes less than 
1,000 hours of service per year shall be determined with respect to 
each pension plan in accordance with such regulations as the Secretary 
may prescribe providing for consideration of facts and circumstances 
peculiar to the work-force constituting the participants in such 
plan.''.
    (c) Accrual Rules.--Section 204(b)(4)(C) of such Act (29 U.S.C. 
1054(b)(4)(C)) is amended--
            (1) by inserting ``(i)'' after ``(C)''; and
            (2) by adding at the end the following new clauses:
    ``(ii) For purposes of this subparagraph, in the case of any 
employee who, as of the beginning of the period designated by the plan 
pursuant to clause (i)--
            ``(I) has customarily completed 500 or more hours of 
        service per year but less than 1,000 hours of service per year, 
        or
            ``(II) is employed in a type of position in which 
        employment customarily constitutes 500 or more hours of service 
        per year but less than 1,000 hours of service per year,
completion of 500 hours of service within such period shall be treated 
as completion of 1,000 hours of service.
    ``(iii) For purposes of clause (ii), the extent to which employment 
in any type of position customarily constitutes less than 1,000 hours 
of service per year shall be determined with respect to each pension 
plan in accordance with such regulations as the Secretary may prescribe 
providing for consideration of facts and circumstances peculiar to the 
work-force constituting the participants in such plan.''.

SEC. 402. TREATMENT OF EMPLOYEES WORKING AT LESS THAN FULL-TIME UNDER 
              GROUP HEALTH PLANS.

    (a) In General.--Part 2 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended--
            (1) by redesignating section 211 (29 U.S.C. 1061) as 
        section 212; and
            (2) by inserting after section 210 (29 U.S.C. 1060) the 
        following new section:

``SEC. 211. TREATMENT OF PART-TIME WORKERS UNDER GROUP HEALTH PLANS.

    ``(a) In General.--A reduction in the employer-provided premium 
under a group health plan with respect to any employee for any period 
of coverage solely because the employee's customary employment is less 
than full-time may be provided under such plan only if the employee is 
described in subsection (b) and only to the extent permitted under 
subsection (c).
    ``(b) Reductions Applicable to Employees Working Less Than Full-
Time.--
            ``(1) In general.--An employee is described in this 
        subsection if such employee, as of the beginning of the period 
        of coverage referred to in subsection (a)--
                    ``(A) has customarily completed less than 30 hours 
                of service per week, or
                    ``(B) is employed in a type of position in which 
                employment customarily constitutes less than 30 hours 
                of service per week.
            ``(2) Regulations.--For purposes of paragraph (1), whether 
        employment in any type of position customarily constitutes less 
        than 30 hours of service per week shall be determined with 
        respect to each group health plan in accordance with such 
        regulations as the Secretary may prescribe providing for 
        consideration of facts and circumstances peculiar to the work-
        force constituting the participants in such plan.
    ``(c) Amount of Permissible Reduction.--The employer-provided 
premium under a group health plan with respect to any employee for any 
period of coverage, after the reduction permitted under subsection (a), 
shall not be less than a ratable portion of the employer-provided 
premium which would be provided under such plan for such period of 
coverage with respect to an employee who completes 30 hours of service 
per week.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Group health plan.--The term `group health plan' has 
        the meaning provided such term in section 607(1).
            ``(2) Employer-provided premium.--
                    ``(A) In general.--The term `employer-provided 
                premium' under a plan for any period of coverage means 
                the portion of the applicable premium under the plan 
                for such period of coverage which is attributable under 
                the plan to employer contributions.
                    ``(B) Applicable premium.--For purposes of 
                subparagraph (A), in determining the applicable premium 
                of a group health plan, principles similar to the 
                principles applicable under section 604 shall apply.''.
    (b) Conforming Amendments.--
            (1) Section 201(1) of such Act (29 U.S.C. 1051(1)) is 
        amended by inserting ``, except with respect to section 211'' 
        before the semicolon.
            (2) The table of contents in section 1 of such Act is 
        amended by striking the item relating to section 211 and 
        inserting the following new items:

``211. Treatment of part-time workers under group health plans.
``212. Effective date.''.

SEC. 403. EXPANSION OF DEFINITION OF EMPLOYEE TO INCLUDE CERTAIN 
              INDIVIDUALS WHOSE SERVICES ARE LEASED OR CONTRACTED FOR.

    Paragraph (6) of section 3 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(6)) is amended--
            (1) by inserting ``(A)'' after ``(6)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B) Such term includes, with respect to any employer, any person 
who is not an employee (within the meaning of subparagraph (A)) of such 
employer and who provides services to such employer, if--
            ``(i) such person has (pursuant to an agreement with such 
        employer or any other person) performed such services for such 
        employer (or for such employer and related persons (within the 
        meaning of section 144(a)(3) of the Internal Revenue Code of 
        1986)) for a period of at least 1 year (6 months in the case of 
        core health benefits) at the rate of at least 500 hours of 
        service per year, and
            ``(ii) such services are of a type historically performed, 
        in the business field of the employer, by employees (within the 
        meaning of subparagraph (A)).''.

SEC. 404. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this subtitle shall apply with respect to plan years 
beginning on or after January 1, 2004.
    (b) Special Rule for Collectively Bargained Plans.--In the case of 
a plan maintained pursuant to 1 or more collective bargaining 
agreements between employee representatives and 1 or more employers 
ratified on or before the date of the enactment of this Act, subsection 
(a) shall be applied to benefits pursuant to, and individuals covered 
by, any such agreement by substituting for ``January 1, 2004'' the date 
of the commencement of the first plan year beginning on or after the 
earlier of--
            (1) the later of--
                    (A) January 1, 2004, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 2006.
    (c) Plan Amendments.--If any amendment made by this subtitle 
requires an amendment to any plan, such plan amendment shall not be 
required to be made before the first plan year beginning on or after 
January 1, 2005, if--
            (1) during the period after such amendment made by this Act 
        takes effect and before such first plan year, the plan is 
        operated in accordance with the requirements of such amendment 
        made by this subtitle, and
            (2) such plan amendment applies retroactively to the period 
        after such amendment made by this subtitle takes effect and 
        such first plan year.
A plan shall not be treated as failing to provide definitely 
determinable benefits or contributions, or to be operated in accordance 
with the provisions of the plan, merely because it operates in 
accordance with this subsection.

            Subtitle B--United States Business Telework Act

SEC. 411. SHORT TITLE.

    This subtitle may be cited as the ``United States Business Telework 
Act''.

SEC. 412. TELEWORK PILOT PROGRAM.

    (a) Program.--In accordance with this subtitle, the Secretary of 
Labor shall conduct, in not more than 5 States, a pilot program to 
raise awareness about telework among employers and to encourage such 
employers to offer telework options to employees.
    (b) Permissible Activities.--In carrying out the pilot program, the 
Secretary is encouraged to--
            (1) produce educational materials and conduct presentations 
        designed to raise awareness of the benefits and the ease of 
        telework;
            (2) conduct outreach to businesses that are considering 
        offering telework options;
            (3) acquire telework technologies and equipment to be used 
        for demonstration purposes; and
            (4) ensure that expectant and new mothers who are employed 
        by businesses that participate in the pilot program are given 
        the option to telework during the 1-year period after the date 
        of birth.

SEC. 413. REPORT TO CONGRESS.

    Not later than 2 years after the first date on which funds are 
appropriated to carry out this subtitle, the Secretary shall transmit 
to the Congress a report containing the results of an evaluation of the 
pilot program and any recommendations as to whether the pilot program, 
with or without modification, should be expanded.

SEC. 414. DEFINITION.

    In this subtitle, the term ``telework'' means the performance of 
any portion of work functions by an employee outside the normal place 
of business under circumstances which reduce or eliminate the need to 
commute.

SEC. 415. TERMINATION.

    The pilot program shall terminate 2 years after the first date on 
which funds are appropriated to carry out this subtitle.

SEC. 416. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $5,000,000 to carry out this 
subtitle.
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