I 

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 familyfriendly 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. 

SA ́NCHEZ 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, inschool and afterschool assistance, family care assistance, 

and encouraging the establishment of family-friendly 

workplaces.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Family and Workplace Balancing Act of 2004’’ or ‘‘Bal4 ancing Act of 2004’’. 

5 (b) TABLE OF CONTENTS.—The table of contents of 

6 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. 
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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. 
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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.

1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) Currently in two-thirds of married families 

4 with children in the United States, both parents 

5 work full-time. Seventy-one percent of mothers with 

6 children under age 18 work full-time, and another 

7 29 percent work part-time. 

8 (2) The National Study of the Changing Work9 force found that 70 percent of employed parents in10 dicated that they don’t have enough time with their 

11 children. 

12 (3)(A) A survey conducted by the Boys and 

13 Girls Clubs of America found that more than half of 

14 the respondents indicated that they had little or no 

15 time to spend in physical activities with their chil16 dren. 

17 (B) Parents in 3,500,000 households, rep18 resenting 7,000,000 children, spend an hour or less 

19 a week doing physical activities with their children.
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1 (C) The primary obstacle cited by the parents 

2 to engaging in physical activities with their children 

3 was their work schedules. 

4 (4) Nearly two-thirds of employees who need to 

5 take family or medical leave do not take such leave 

6 because they cannot afford to forgo the pay. 

7 (5) Nearly every industrialized nation other 

8 than the United States, and most developing na9 tions, provides parents with paid leave for infant 

10 care. 

11 (6) In the United States, more than half of all 

12 mothers of children under the age of one now work. 

13 Yet parents of infants and toddlers face acute prob14 lems finding child care, and child care that is avail15 able is often of mediocre quality. 

16 (7) The cost of child care averages $4,000 to 

17 $6,000 per year in the United States, and families 

18 with younger children or with more than one child 

19 face even greater costs. For example, the average 

20 annual cost of child care for a 4-year-old in an 

21 urban area center is more than the average annual 

22 cost of public college tuition in all but one State. 

23 (8) The average annual child care teacher sal24 ary is $15,430, a wage so low that many programs 

25 find it extremely challenging to recruit fully qualified 
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1 teachers and to retain them. High turnover rates 

2 make it more difficult to provide quality and con3 tinuity of care. 

4 (9) Only 12 percent of eligible children receive 

5 child care assistance through the Child Care Devel6 opment Block Grant, and only about 3 out of 5 eligi7 ble preschoolers are able to participate in the Head 

8 Start program. 

9 (10) Among needy students, school nutrition 

10 programs often provide the primary opportunity for 

11 consumption of nutritionally valuable foods. 

12 (11) Breakfast is a critical meal for children 

13 and provides the nutrition necessary to optimize 

14 their learning capacities. 

15 (12) According to the Bureau of the Census, 

16 nearly 7,000,000 children in the United States are 

17 left alone after school each week without adult su18 pervision or structured activities of any kind. 

19 (13) Violent juvenile crime peaks between the 

20 hours of 3:00 p.m. and 7:00 p.m. and teens are 

21 more likely to be victims of serious violent crime in 

22 the hour after school lets out than any other time 

23 of the day. 
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1 (14) The Nation’s communities can benefit 

2 from teleworking, which give workers more time to 

3 spend at home with their families. 

4 (15) Companies with telework programs have 

5 found that telework can boost employee productivity 

6 5 percent to 20 percent, thereby saving businesses 

7 valuable resources and time. 

8 (16) More United States families are working 

9 more hours than ever. In 2000, the average Amer10 ican worker worked 36 hours more, almost a full 

11 week, than in 1990. A recent AFL–CIO poll found 

12 that nearly three-quarters of working adults indi13 cated that they have little or no control over their 

14 work schedules. 

15 (17) The AFL–CIO’s ‘‘Ask a Working Woman’’ 

16 survey for 2002 reported that 63 percent of working 

17 women work more than 40 hours a week, 30 percent 

18 of working women work 20 to 39 hours a week, and 

19 7 percent of working women work less than 20 

20 hours a week. 
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1 TITLE I—PAID LEAVE FOR NEW 

2 PARENTS AND FAMILY AND 

3 MEDICAL LEAVE ENHANCE4 MENT ACT OF 2003

5 Subtitle A—Paid Leave for New 

6 Parents

7 SEC. 101. SHORT TITLE. 

8 This subtitle may be cited as the ‘‘Family Income To 

9 Respond to Significant Transitions Act’’.

10 SEC. 102. PURPOSE. 

11 The purpose of this subtitle is to establish a program 

12 that supports the efforts of States and political subdivi13 sions to provide partial or full wage replacement, often re14 ferred to as FIRST insurance, to new parents so that the 

15 new parents are able to spend time with a new infant or 

16 newly adopted child, and to other employees. 

17 SEC. 103. DEFINITIONS. 

18 In this subtitle: 

19 (1) EMPLOYER; SON OR DAUGHTER; STATE.—

20 The terms ‘‘employer’’, ‘‘son or daughter’’, and 

21 ‘‘State’’ have the meanings given the terms in sec22 tion 101 of the Family and Medical Leave Act of 

23 1993 (29 U.S.C. 2611). 
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1 (2) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Labor, acting after consultation 

3 with the Secretary of Health and Human Services. 

4 SEC. 104. GRANTS. 

5 (a) GRANTS.—

6 (1) IN GENERAL.—The Secretary shall make 

7 grants to eligible entities to pay for the Federal 

8 share of the cost of carrying out projects that assist 

9 families by providing, through various mechanisms, 

10 wage replacement for eligible individuals who are re11 sponding to—

12 (A) caregiving needs resulting from the 

13 birth or adoption of a son or daughter; or 

14 (B) other family caregiving needs. 

15 (2) PERIODS.—The Secretary shall make the 

16 grants for periods of 5 years.

17 (b) ELIGIBLE ENTITIES.—To be eligible to receive a 

18 grant under this section, an entity shall be a State or polit19 ical subdivision of a State. 

20 (c) USE OF FUNDS.—

21 (1) IN GENERAL.—An entity that receives a 

22 grant under this section may use the funds made 

23 available through the grant to provide partial or full 

24 wage replacement as described in subsection (a) to 

25 eligible individuals—
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1 (A) directly; 

2 (B) through an insurance program, such 

3 as a State temporary disability insurance pro4 gram or the State unemployment compensation 

5 benefit program; 

6 (C) through a private disability or other 

7 insurance plan, or another mechanism provided 

8 by a private employer; or 

9 (D) through another mechanism. 

10 (2) PERIOD.—In carrying out a project under 

11 this section, the entity shall provide partial or full 

12 wage replacement to eligible individuals for not less 

13 than 6 weeks during a period of leave, or an absence 

14 from employment, described in subsection (d)(2), 

15 during any 12-month period. Wage replacement 

16 available to an individual under this paragraph shall 

17 be in addition to any compensation from annual or 

18 sick leave that the individual may elect to use during 

19 a period of leave, or an absence from employment, 

20 described in subsection (d)(2), during any 12-month 

21 period. 

22 (3) ADMINISTRATIVE COSTS.—No entity may 

23 use more than 10 percent of the total funds made 

24 available through the grant during the 5-year period 
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1 of the grant to pay for the administrative costs re2 lating to a project described in subsection (a). 

3 (d) ELIGIBLE INDIVIDUALS.—To be eligible to re4 ceive wage replacement under subsection (a), an individual 

5 shall—

6 (1) meet such eligibility criteria as the eligible 

7 entity providing the wage replacement may specify 

8 in an application described in subsection (e); and 

9 (2) be—

10 (A) an individual who is taking leave, 

11 under the Family and Medical Leave Act of 

12 1993 (29 U.S.C. 2601 et seq.), other Federal, 

13 State, or local law, or a private plan, for a rea14 son described in subparagraph (A) or (B) of 

15 section 102(a)(1) of the Family and Medical 

16 Leave Act of 1993 (29 U.S.C. 2612(a)(1)); 

17 (B) at the option of the eligible entity, an 

18 individual who—

19 (i) is taking leave, under that Act, 

20 other Federal, State, or local law, or a pri21 vate plan, for a reason described in sub22 paragraph (C), (D), (E), or (F) of section 

23 102(a)(1) of the Family and Medical 

24 Leave Act of 1993 (29 U.S.C. 2612(a)(1)); 

25 or 
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1 (ii) leaves employment, and has an ab2 sence from employment, because the indi3 vidual has elected to care for a son or 

4 daughter under age 1; or 

5 (C) at the option of the eligible entity, an 

6 individual who has an absence from employ7 ment and has other characteristics specified by 

8 the eligible entity in an application described in 

9 subsection (e). 

10 (e) APPLICATION.—To be eligible to receive a grant 

11 under this section, an entity shall submit an application 

12 to the Secretary, at such time, in such manner, and con13 taining such information as the Secretary may require, in14 cluding, at a minimum—

15 (1) a description of the wage replacement pro16 gram; 

17 (2)(A) information on the number and type of 

18 families to be covered by the project, and the extent 

19 of such coverage in the area served under the grant; 

20 and 

21 (B) information on any criteria or characteris22 tics that the entity will use to determine whether an 

23 individual is eligible for wage replacement under 

24 subsection (a), as described in paragraphs (1) and 

25 (2)(C) of subsection (d); 
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1 (3) if the project will expand on State and pri2 vate systems of wage replacement for eligible indi3 viduals, information on the manner in which the 

4 project will expand on the systems; and 

5 (4) information demonstrating the manner in 

6 which the wage replacement assistance provided 

7 through the project will assist families in which an 

8 individual takes leave or is absent from employment 

9 as described in subsection (d)(2). 

10 (f) SELECTION CRITERIA.—In selecting entities to re11 ceive grants for projects under this section, the Secretary 

12 shall—

13 (1) take into consideration—

14 (A) the scope of the proposed projects; 

15 (B) the cost-effectiveness, feasibility, and 

16 financial soundness of the proposed projects;

17 (C) the extent to which the proposed 

18 projects would expand access to wage replace19 ment in response to family caregiving needs, 

20 particularly for low-wage employees, in the area 

21 served by the grant; and 

22 (D) the benefits that would be offered to 

23 families and children through the proposed 

24 projects; and 
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1 (2) to the extent feasible, select entities pro2 posing projects that utilize diverse mechanisms, in3 cluding expansion of State unemployment compensa4 tion benefit programs, and establishment or expan5 sion of State temporary disability insurance pro6 grams, to provide the wage replacement. 

7 (g) FEDERAL SHARE.—

8 (1) IN GENERAL.—The Federal share of the 

9 cost described in subsection (a) shall be—

10 (A) 50 percent for the first year of the 

11 grant period; 

12 (B) 40 percent for the second year of that 

13 period; 

14 (C) 30 percent for the third year of that 

15 period; and 

16 (D) 20 percent for each subsequent year. 

17 (2) NON-FEDERAL SHARE.—The non-Federal 

18 share of the cost may be in cash or in kind, fairly 

19 evaluated, including plant, equipment, and services 

20 and may be provided from State, local, or private 

21 sources, or Federal sources other than this subtitle. 

22 (h) SUPPLEMENT NOT SUPPLANT.—Funds appro23 priated pursuant to the authority of this subtitle shall be 

24 used to supplement and not supplant other Federal, State,
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1 and local public funds and private funds expended to pro2 vide wage replacement. 

3 (i) EFFECT ON EXISTING RIGHTS.—Nothing in this 

4 subtitle shall be construed to supersede, preempt, or other5 wise infringe on the provisions of any collective bargaining 

6 agreement or any employment benefit program or plan 

7 that provides greater rights to employees than the rights 

8 established under this subtitle. 

9 SEC. 105. NOTIFICATION. 

10 An eligible entity that provides partial or full wage 

11 replacement to an eligible individual under this subtitle 

12 shall notify (in a form and manner prescribed by the Sec13 retary)—

14 (1) the employer of the individual of the 

15 amount of the wage replacement provided; and 

16 (2) the individual and the employer of the indi17 vidual that the employer shall count an appropriate 

18 period of leave, calculated under section 102(g) of 

19 the Family and Medical Leave Act of 1993 (29 

20 U.S.C. 2612(g)), as added by section 108, against 

21 the total amount of leave (if any) to which the em22 ployee is entitled under section 102(a)(1) of that Act 

23 (29 U.S.C. 2612(a)(1)). 
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1 SEC. 106. REPORT. 

2 Not later than 3 years after the beginning of the 

3 grant period for the first grant made under section 104, 

4 and annually thereafter, the Secretary shall prepare and 

5 submit to Congress a report that contains a description 

6 and evaluation of the program under this subtitle for the 

7 preceding year. 

8 SEC. 107. AUTHORIZATION OF APPROPRIATIONS. 

9 There are authorized to be appropriated to carry out 

10 this subtitle $400,000,000 for fiscal year 2004 and such 

11 sums as may be necessary for each subsequent fiscal year. 

12 SEC. 108. TECHNICAL AND CONFORMING AMENDMENTS. 

13 (a) IN GENERAL.—Section 102 of the Family and 

14 Medical Leave Act of 1993 (29 U.S.C. 2612) is amended 

15 by adding at the end the following: 

16 ‘‘(g) RELATIONSHIP TO FIRST INSURANCE.—

17 ‘‘(1) FULL WAGE REPLACEMENT.—If an eligible 

18 entity provides full wage replacement to an employee 

19 for a period under title I of the Family and Work20 place Balancing Act of 2003, the employee’s em21 ployer shall count an amount of leave, equal to that 

22 period, against the total amount of leave (if any) to 

23 which the employee is entitled under subsection 

24 (a)(1). 

25 ‘‘(2) PARTIAL WAGE REPLACEMENT.—If an eli26 gible entity provides partial wage replacement to an 
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1 employee for a period under title I of the Family 

2 and Workplace Balancing Act of 2003, the employ3 ee’s employer shall—

4 ‘‘(A) total the amount of partial wage re5 placement provided for that period; 

6 ‘‘(B) convert the total into a corresponding 

7 amount of full wage replacement provided for a 

8 proportionately reduced period; and 

9 ‘‘(C) count an amount of leave, equal to 

10 the period described in subparagraph (B), 

11 against the total amount of leave (if any) to 

12 which the employee is entitled under subsection 

13 (a)(1).’’. 

14 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

15 Section 102(d)(2) of the Family and Medical Leave Act 

16 of 1993 (29 U.S.C. 2612(d)(2)) is amended by striking 

17 ‘‘for leave’’ and inserting ‘‘for any unpaid leave’’. 

18 Subtitle B—Family and Medical 

19 Leave Enhancement Act of 2003

20 SEC. 111. SHORT TITLE. 

21 This subtitle may be cited as the ‘‘Family and Med22 ical Leave Enhancement Act of 2003’’. 
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1 SEC. 112. ADDITIONAL LEAVE FOR PARENTAL INVOLVE2 MENT. 

3 (a) LEAVE REQUIREMENT.—Section 102(a) of the 

4 Family and Medical Leave Act of 1993 (29 U.S.C. 

5 2612(a)) is amended by adding at the end the following: 

6 ‘‘(3) ENTITLEMENT TO ADDITIONAL LEAVE FOR

7 PARENTAL INVOLVEMENT.—

8 ‘‘(A) IN GENERAL.—Subject to section 

9 103(f), in addition to leave available under 

10 paragraph (1), an eligible employee shall be en11 titled to a total of 4 hours of leave during any 

12 30-day period, and a total of 24 hours of leave 

13 during any 12-month period to participate in or 

14 attend an activity that—

15 ‘‘(i) is sponsored by a school or com16 munity organization; and 

17 ‘‘(ii) relates to a program of the 

18 school or organization that is attended by 

19 a son or daughter or a grandchild of the 

20 employee. 

21 ‘‘(B) DEFINITIONS.—As used in this para22 graph: 

23 ‘‘(i) SCHOOL.—The term ‘school’ 

24 means an elementary school or secondary 

25 school (as such terms are defined in the 

26 Elementary and Secondary Education Act 
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1 of 1965 (20 U.S.C. 6301 et seq.)), a Head 

2 Start program assisted under the Head 

3 Start Act (42 U.S.C. 9831 et seq.), and a 

4 child care facility licensed under State law. 

5 ‘‘(ii) COMMUNITY ORGANIZATION.—

6 The term ‘community organization’ means 

7 a private nonprofit organization that is 

8 representative of a community or a signifi9 cant segment of a community and provides 

10 activities for individuals described in sub11 paragraph (A) or (B) of section 101(12), 

12 such as a scouting or sports organiza13 tion.’’. 

14 (b) SCHEDULE.—Section 102(b)(1) of such Act (29 

15 U.S.C. 2612(b)(1)) is amended by inserting after the sec16 ond sentence the following: ‘‘Leave under subsection 

17 (a)(3)(A) may be taken intermittently or on a reduced 

18 leave schedule.’’. 

19 (c) SUBSTITUTION OF PAID LEAVE.—Section 

20 102(d)(2)(A) of such Act (29 U.S.C. 2612(d)(2)(A)) is 

21 amended—

22 (1) by striking ‘‘under’’ and inserting the fol23 lowing: ‘‘under—

24 ‘‘(i)’’; and
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1 (2) inserting before the period at the end the 

2 following: ‘‘; or 

3 ‘‘(ii) subsection (a)(3)(A) for any part 

4 of the 24-hour period of such leave under 

5 such subsection’’. 

6 (d) NOTICE.—Section 102(e)(1) of such Act (29 

7 U.S.C. 2612(e)(1)) is amended by adding at the end the 

8 following: ‘‘In any case in which an employee requests 

9 leave under subsection (a)(3)(A), the employee shall pro10 vide the employer with not less than 7 days’ notice, before 

11 the date the leave is to begin, of the employee’s intention 

12 to take leave under such subsection.’’. 

13 (e) CERTIFICATION.—Section 103 of such Act (29 

14 U.S.C. 2613) is amended by adding at the end the fol15 lowing: 

16 ‘‘(f) CERTIFICATION FOR PARENTAL INVOLVEMENT

17 LEAVE.—An employer may require that a request for 

18 leave under section 102(a)(3)(A) be supported by a certifi19 cation issued at such time and in such manner as the Sec20 retary may by regulation prescribe.’’. 

21 SEC. 113. PARENTAL INVOLVEMENT LEAVE FOR CIVIL 

22 SERVANTS. 

23 (a) LEAVE REQUIREMENT.—Section 6382(a) of title 

24 5, United States Code, is amended by adding at the end 

25 the following: 
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1 ‘‘(3)(A) Subject to section 6383(f), in addition to 

2 leave available under paragraph (1), an employee shall be 

3 entitled to a total of 4 hours of leave during any 30-day 

4 period, and a total of 24 hours of leave during any 12-

5 month period to participate in or attend an activity that—

6 ‘‘(i) is sponsored by a school or community or7 ganization; and 

8 ‘‘(ii) relates to a program of the school or orga9 nization that is attended by a son or daughter or a 

10 grandchild of the employee. 

11 ‘‘(B) For the purpose of this paragraph: 

12 ‘‘(i) The term ‘school’ means an elementary 

13 school or secondary school (as such terms are de14 fined in the Elementary and Secondary Education 

15 Act of 1965 (20 U.S.C. 6301 et seq.)), a Head Start 

16 program assisted under the Head Start Act (42 

17 U.S.C. 9831 et seq.), and a child care facility li18 censed under State law. 

19 ‘‘(ii) The term ‘community organization’ means 

20 a private nonprofit organization that is representa21 tive of a community or a significant segment of a 

22 community and provides activities for individuals de23 scribed in subparagraph (A) or (B) of section 

24 6381(6), such as a scouting or sports organization.’’. 
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1 (b) SCHEDULE.—Section 6382(b)(1) of such title is 

2 amended by inserting after the second sentence the fol3 lowing: ‘‘Leave under subsection (a)(3)(A) may be taken 

4 intermittently or on a reduced leave schedule.’’. 

5 (c) SUBSTITUTION OF PAID LEAVE.—Section 

6 6382(d) of such title is amended by inserting before ‘‘, 

7 except’’ the following: ‘‘, or for leave provided under sub8 section (a)(3)(A) any of the employee’s accrued or accu9 mulated annual leave under subchapter I for any part of 

10 the 24-hour period of such leave under such subsection’’. 

11 (d) NOTICE.—Section 6382(e)(1) of such title is 

12 amended by adding at the end the following: ‘‘In any case 

13 in which an employee requests leave under subsection 

14 (a)(3)(A), the employee shall provide the employing agen15 cy with not less than 7 days’ notice, before the date the 

16 leave is to begin, of the employee’s intention to take leave 

17 under such subsection.’’. 

18 (e) CERTIFICATION.—Section 6383 of such title is 

19 amended by adding at the end the following: 

20 ‘‘(f) An employing agency may require that a request 

21 for leave under section 6382(a)(3)(A) be supported by a 

22 certification issued at such time and in such manner as 

23 the Office of Personnel Management may by regulation 

24 prescribe.’’. 
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1 SEC. 114. CLARIFICATION OF LEAVE ENTITLEMENT. 

2 Section 102(a)(1) of the Family and Medical Leave 

3 Act of 1993 (29 U.S.C. 2612(a)(1)) and section 

4 6382(a)(1) of title 5, United States Code, are each amend5 ed by adding at the end the following: 

6 ‘‘(E) In order to meet routine family med7 ical needs, including transportation of a son or 

8 daughter or a grandchild for medical and dental 

9 appointments for annual checkups and vaccina10 tions. 

11 ‘‘(F) In order to meet the routine medical 

12 care needs of elderly individuals who are related 

13 to the eligible employee, including visits to 

14 nursing homes and group homes.’’. 

15 SEC. 115. DEFINITION OF GRANDCHILD. 

16 (a) NON-CIVIL-SERVICE EMPLOYEES.—Section 101 

17 of the Family and Medical Leave Act (29 U.S.C. 2611) 

18 is amended by adding at the end the following new para19 graph: 

20 ‘‘(14) GRANDCHILD.—The term ‘grandchild’ 

21 means a son or daughter of an employee’s child.’’. 

22 (b) CIVIL SERVICE EMPLOYEES.—Section 6381 of 

23 title 5, United States Code, is amended—

24 (1) in paragraph (5)(B), by striking ‘‘and’’ at 

25 the end; 
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1 (2) in paragraph (6)(B), by striking the period 

2 at the end and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following new 

4 paragraph: 

5 ‘‘(7) the term ‘grandchild’ means a son or 

6 daughter of an employee’s child.’’. 

7 TITLE II—CHILD CARE 

8 EXPANSION AND IMPROVEMENT 

9 Subtitle A—Care for Young 

10 Children 

11 SEC. 201. EXPANDING CHILD CARE FOR YOUNG CHILDREN. 

12 (a) GOALS.—Section 658A(b) of the Child Care and 

13 Development Block Grant Act of 1990 (42 U.S.C. 9801 

14 note) is amended— 

15 (1) in paragraph (4), by striking ‘‘and’’; 

16 (2) in paragraph (5), by striking the period and 

17 inserting ‘‘; and’’; and 

18 (3) by adding at the end the following: 

19 ‘‘(6) to assist States in improving child care 

20 services for young children.’’. 

21 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

22 658B of the Child Care and Development Block Grant Act 

23 of 1990 (42 U.S.C. 9858) is amended—

24 (1) by striking ‘‘There’’ and inserting ‘‘(a) IN

25 GENERAL.—There’’; and
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•HR 3780 IH 

1 (2) by adding at the end the following: 

2 ‘‘(b) CHILD CARE ACTIVITIES FOR YOUNG CHIL3 DREN.—In addition to amounts appropriated under sub4 section (a), there is authorized to be appropriated to carry 

5 out child care activities for young children under this sub6 chapter $500,000,000 for each of the fiscal years 2004, 

7 2005, and 2006.’’. 

8 (c) CHILD CARE ACTIVITIES FOR YOUNG CHIL9 DREN.—The Child Care and Development Block Grant 

10 Act of 1990 (42 U.S.C. 9801 et seq.) is amended by in11 serting after section 658G the following: 

12 ‘‘SEC. 658H. CHILD CARE ACTIVITIES FOR YOUNG CHIL13 DREN. 

14 ‘‘Child care activities for young children for which 

15 funds under this subchapter may be used include activities 

16 that are designed to accomplish the following: 

17 ‘‘(1) Increase the availability of child care serv18 ices for young children with disabilities. 

19 ‘‘(2) Provide support services for networks of 

20 family child care providers. 

21 ‘‘(3) Provide or support programs that provide 

22 training, services, materials, equipment, or other 

23 support to caregivers, eligible child care providers, 

24 and family child care providers that provide child 

25 care to young children. Such support may include 
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•HR 3780 IH 

1 the purchase of equipment such as cribs and high 

2 chairs. 

3 ‘‘(4) Provide funds to increase compensation of4 fered and provide bonuses to caregivers, eligible 

5 child care providers, and family child care providers 

6 who provide child care to children under the age of 

7 3 years, especially those caregivers and providers 

8 who have formal education in early childhood devel9 opment. 

10 ‘‘(5) Provide and support networks between 

11 health care providers and caregivers, eligible child 

12 care providers, and family child care providers that 

13 provide child care to young children. 

14 ‘‘(6) Provide child care services for young chil15 dren who are enrolled in Head Start programs under 

16 the Head Start Act (42 U.S.C. 9831 et seq.).’’. 

17 (d) DEFINITIONS.—Section 658P of the Child Care 

18 and Development Block Grant Act of 1990 (42 U.S.C. 

19 9858n) is amended by adding at the end the following: 

20 ‘‘(15) YOUNG CHILDREN.—The term ‘young 

21 children’ means eligible children who are less than 3 

22 years of age.’’. 
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•HR 3780 IH 

1 Subtitle B—Improving Child Care 

2 Quality Through Teacher Incen3 tives 

4 SEC. 221. PURPOSE. 

5 The purposes of this subtitle are—

6 (1) to establish the Child Care Provider Devel7 opment and Retention Grant Program, the Child 

8 Care Provider Scholarship Program, and a program 

9 of child care provider health benefits coverage; and 

10 (2) to help children receive the high quality 

11 child care and early education the children need for 

12 positive cognitive and social development, by reward13 ing and promoting the retention of committed, quali14 fied child care providers and by providing financial 

15 assistance to improve the educational qualifications 

16 of child care providers. 

17 SEC. 222. DEFINITIONS. 

18 In this subtitle: 

19 (1) CHILD CARE PROVIDER.—The term ‘‘child 

20 care provider’’ means an individual who provides a 

21 service directly to a child on a person-to-person basis 

22 for compensation for—

23 (A) a center-based child care provider that 

24 is licensed or regulated under State or local law 

25 and that satisfies the State and local require-
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•HR 3780 IH 

1 ments applicable to the child care services pro2 vided; 

3 (B) a licensed or regulated family child 

4 care provider that satisfies the State and local 

5 requirements applicable to the child care serv6 ices provided; or 

7 (C) an out-of-school time program that is 

8 licensed or regulated under State or local law 

9 and that satisfies the State and local require10 ments applicable to the child care services pro11 vided. 

12 (2) FAMILY CHILD CARE PROVIDER.—The term 

13 ‘‘family child care provider’’ has the meaning given 

14 such term in section 658P of the Child Care and 

15 Development Block Grant Act of 1990 (42 U.S.C. 

16 9858n). 

17 (3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

18 has the meaning given such term in section 4 of the 

19 Indian Self-Determination and Education Assistance 

20 Act (25 U.S.C. 450b). 

21 (4) LEAD AGENCY.—The term ‘‘lead agency’’ 

22 means the agency designated under section 658D of 

23 the Child Care and Development Block Grant Act of 

24 1990 (42 U.S.C. 9858b). 
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•HR 3780 IH 

1 (5) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Health and Human Services. 

3 (6) STATE.—The term ‘‘State’’ means any of 

4 the several States, the District of Columbia, the 

5 Commonwealth of Puerto Rico, the Virgin Islands of 

6 the United States, Guam, American Samoa, or the 

7 Commonwealth of the Northern Mariana Islands. 

8 (7) TRIBAL ORGANIZATION.—The term ‘‘tribal 

9 organization’’ has the meaning given the term in 

10 section 4 of the Indian Self-Determination and Edu11 cation Assistance Act (25 U.S.C. 450b). 

12 SEC. 223. FUNDS FOR CHILD CARE PROVIDER DEVELOP13 MENT AND RETENTION GRANTS, SCHOLAR14 SHIPS, AND HEALTH BENEFITS COVERAGE. 

15 (a) IN GENERAL.—From amounts appropriated to 

16 carry out this subtitle, the Secretary may allot and dis17 tribute funds to eligible States, and make payments to In18 dian tribes and tribal organizations, to pay for the Federal 

19 share of the cost of carrying out activities under sections 

20 226, 227, and 228 for eligible child care providers. 

21 (b) ALLOTMENTS.—The funds shall be allotted and 

22 distributed, and the payments shall be made, by the Sec23 retary in accordance with section 224, and expended by 

24 the States (directly, or at the option of the States, through 

25 units of general purpose local government), and by Indian
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•HR 3780 IH 

1 tribes and tribal organizations, in accordance with this 

2 subtitle. 

3 SEC. 224. ALLOTMENTS TO STATES. 

4 (a) AMOUNTS RESERVED.—

5 (1) TERRITORIES AND POSSESSIONS.—The Secretary shall reserve not more than 1 6 ⁄2 of 1 percent 

7 of the funds appropriated under section 231(a), and 

not more than 1 8 ⁄2 of 1 percent of the funds appro9 priated under section 232(b), for any fiscal year for 

10 payments to the Virgin Islands of the United States, 

11 Guam, American Samoa, and the Commonwealth of 

12 the Northern Mariana Islands, to be allotted in ac13 cordance with their respective needs. 

14 (2) INDIAN TRIBES AND TRIBAL ORGANIZA15 TIONS.—The Secretary shall reserve not more than 

16 3 percent of the funds appropriated under section 

17 231(a), and not more than 3 percent of the funds 

18 appropriated under section 231(b), for any fiscal 

19 year for payments to Indian tribes and tribal organi20 zations with applications approved under subsection 

21 (c). 

22 (b) ALLOTMENTS TO REMAINING STATES.—

23 (1) GENERAL AUTHORITY.—From the funds 

24 appropriated under section 231(a) for any fiscal year 

25 and remaining after the reservations made under 
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•HR 3780 IH 

1 subsection (a), and from the funds appropriated 

2 under section 231(b) for any fiscal year and remain3 ing after the reservations made under subsection (a), 

4 the Secretary shall allot to each State an amount 

5 equal to the sum of—

6 (A) an amount that bears the same ratio 

7 to 50 percent of the appropriate remainder as 

8 the product of the young child factor of the 

9 State and the allotment percentage of the State 

10 bears to the sum of the corresponding products 

11 for all States; and 

12 (B) an amount that bears the same ratio 

13 to 50 percent of such remainder as the product 

14 of the school lunch factor of the State and the 

15 allotment percentage of the State bears to the 

16 sum of the corresponding products for all 

17 States. 

18 (2) YOUNG CHILD FACTOR.—In this subsection, 

19 the term ‘‘young child factor’’ means the ratio of the 

20 number of children under 5 years of age in the State 

21 to the number of such children in all the States, as 

22 determined according to the most recent annual esti23 mates of population in the States, as provided by the 

24 Bureau of the Census. 
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•HR 3780 IH 

1 (3) SCHOOL LUNCH FACTOR.—In this sub2 section, the term ‘‘school lunch factor’’ means the 

3 ratio of the number of children who are receiving 

4 free or reduced price lunches under the school lunch 

5 program established under the Richard B. Russell 

6 National School Lunch Act (42 U.S.C. 1751 et seq.) 

7 in the State to the number of such children in all 

8 the States, as determined annually by the Depart9 ment of Agriculture. 

10 (4) ALLOTMENT PERCENTAGE.—

11 (A) IN GENERAL.—Except as provided in 

12 subparagraph (B), for purposes of this sub13 section, the allotment percentage for a State 

14 shall be determined by dividing the per capita 

15 income of all individuals in the United States, 

16 by the per capita income of all individuals in 

17 the State. 

18 (B) LIMITATIONS.—For purposes of this 

19 subsection, if an allotment percentage deter20 mined under subparagraph (A)—

21 (i) is more than 1.2 percent, the allot22 ment percentage of that State shall be con23 sidered to be 1.2 percent; and 
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•HR 3780 IH 

1 (ii) is less than 0.8 percent, the allot2 ment percentage of the State shall be con3 sidered to be 0.8 percent. 

4 (C) PER CAPITA INCOME.—For purposes 

5 of subparagraph (A), per capita income shall 

6 be—

7 (i) determined at 2-year intervals; 

8 (ii) applied for the 2-year period be9 ginning on October 1 of the first fiscal 

10 year beginning after the date such deter11 mination is made; and 

12 (iii) equal to the average of the an13 nual per capita incomes for the most re14 cent period of 3 consecutive years for 

15 which satisfactory data are available from 

16 the Department of Commerce at the time 

17 such determination is made. 

18 (c) PAYMENTS TO INDIAN TRIBES AND TRIBAL OR19 GANIZATIONS.—

20 (1) RESERVATION OF FUNDS.—From amounts 

21 reserved under subsection (a)(2), the Secretary may 

22 make grants to or enter into contracts with Indian 

23 tribes and tribal organizations that submit applica24 tions under this subsection, to plan and carry out 

25 programs and activities—
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•HR 3780 IH 

1 (A) to encourage child care providers to 

2 improve their qualifications; 

3 (B) to retain qualified child care providers 

4 in the child care field; and 

5 (C) to provide health benefits coverage for 

6 child care providers. 

7 (2) APPLICATIONS AND REQUIREMENTS.—To 

8 be eligible to receive a grant or contract under this 

9 subsection, an Indian tribe or tribal organization 

10 shall submit an application to the Secretary at such 

11 time, in such manner, and containing such informa12 tion as the Secretary may require. The application 

13 shall provide that the applicant—

14 (A) will coordinate the programs and ac15 tivities involved, to the maximum extent prac16 ticable, with the lead agency in each State in 

17 which the applicant will carry out such pro18 grams and activities; and 

19 (B) will make such reports on, and conduct 

20 such audits of the funds made available through 

21 the grant or contract for, programs and activi22 ties under this subtitle as the Secretary may re23 quire. 

24 (d) DATA AND INFORMATION.—The Secretary shall 

25 obtain from each appropriate Federal agency, the most re-
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•HR 3780 IH 

1 cent data and information necessary to determine the al2 lotments provided for in subsection (b). 

3 (e) REALLOTMENTS.—

4 (1) IN GENERAL.—Any portion of an allotment 

5 under subsection (b) to a State for a fiscal year that 

6 the Secretary determines will not be distributed to 

7 the State for such fiscal year shall be reallotted by 

8 the Secretary to other States in proportion to the 

9 original corresponding allotments made under such 

10 subsection to such States for such fiscal year. 

11 (2) LIMITATIONS.—

12 (A) REDUCTION.—The amount of any re13 allotment to which a State is entitled under this 

14 subsection shall be reduced to the extent that 

15 such amount exceeds the amount that the Sec16 retary estimates will be distributed to the State 

17 to carry out corresponding activities under this 

18 subtitle. 

19 (B) REALLOTMENTS.—The amount of 

20 such reduction shall be reallotted to States for 

21 which no reduction in a corresponding allot22 ment, or in a corresponding reallotment, is re23 quired by this subsection, in proportion to the 

24 original corresponding allotments made under 
36

•HR 3780 IH 

1 subsection (b) to such States for such fiscal 

2 year. 

3 (3) AMOUNTS REALLOTTED.—For purposes of 

4 this subtitle (other than this subsection and sub5 section (b)), any amount reallotted to a State under 

6 this subsection shall be considered to be part of the 

7 corresponding allotment made under subsection (b) 

8 to the State. 

9 (4) INDIAN TRIBES OR TRIBAL ORGANIZA10 TIONS.—Any portion of a grant or contract made to 

11 an Indian tribe or tribal organization under sub12 section (c) that the Secretary determines is not 

13 being used in a manner consistent with the provi14 sions of this subtitle in the period for which the 

15 grant or contract is made available, shall be used by 

16 the Secretary to make payments to other tribes or 

17 organizations that have submitted applications under 

18 subsection (c) in accordance with their respective 

19 needs. 

20 (f) COST-SHARING.—

21 (1) CHILD CARE PROVIDER DEVELOPMENT AND

22 RETENTION GRANTS AND SCHOLARSHIPS.—

23 (A) FEDERAL SHARE.—The Federal share 

24 of the cost of carrying out activities under sec25 tions 226 and 227, with funds allotted under
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•HR 3780 IH 

1 this section and distributed by the Secretary to 

2 a State, shall be—

3 (i) not more than 90 percent of the 

4 cost of each grant made under such sec5 tions, in the first fiscal year for which the 

6 State receives such funds; 

7 (ii) not more than 85 percent of the 

8 cost of each grant made under such sec9 tions, in the second fiscal year for which 

10 the State receives such funds; 

11 (iii) not more than 80 percent of the 

12 cost of each grant made under such sec13 tions, in the third fiscal year for which the 

14 State receives such funds; and 

15 (iv) not more than 75 percent of the 

16 cost of each grant made under such sec17 tions, in any subsequent fiscal year for 

18 which the State receives such funds. 

19 (B) NON-FEDERAL SHARE.—

20 (i) IN GENERAL.—The State may pro21 vide the non-Federal share of the cost in 

22 cash or in the form of an in-kind contribu23 tion, fairly evaluated by the Secretary. 

24 (ii) IN-KIND CONTRIBUTION.—In this 

25 subparagraph, the term ‘‘in-kind contribu-
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•HR 3780 IH 

1 tion’’ means payment of the costs of par2 ticipation of eligible child care providers in 

3 health insurance programs or retirement 

4 programs. 

5 (2) CHILD CARE PROVIDER HEALTH BENEFITS

6 COVERAGE.—

7 (A) FEDERAL SHARE.—The Federal share 

8 of the cost of carrying out activities under sec9 tion 228, with funds allotted under this section 

10 and distributed by the Secretary to a State, 

11 shall be not more than 50 percent of such cost. 

12 (B) NON-FEDERAL SHARE.—The State 

13 may provide the non-Federal share of the cost 

14 in cash or in kind, fairly evaluated by the Sec15 retary, including plant, equipment, or services. 

16 The State shall provide the non-Federal share 

17 directly or through donations from public or 

18 private entities. Amounts provided by the Fed19 eral Government, or services assisted or sub20 sidized to any significant extent by the Federal 

21 Government, may not be included in deter22 mining the amount of such share. 

23 (g) AVAILABILITY OF ALLOTTED FUNDS DISTRIB24 UTED TO STATES.—Of the funds allotted under this sec-
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•HR 3780 IH 

1 tion for activities described in sections 226 and 227 and 

2 distributed by the Secretary to a State for a fiscal year—

3 (1) not less than 67.5 percent shall be available 

4 to the State for grants under section 226; 

5 (2) not less than 22.5 percent shall be available 

6 to the State for grants under section 227; and 

7 (3) not more than 10 percent shall be available 

8 to pay administrative costs incurred by the State to 

9 carry out activities described in sections 226 and 

10 227. 

11 (h) DEFINITION.—For the purposes of subsections 

12 (a) through (e), the term ‘‘State’’ includes only the 50 

13 States, the District of Columbia, and the Commonwealth 

14 of Puerto Rico. 

15 SEC. 225. APPLICATION AND PLAN. 

16 (a) APPLICATION.—To be eligible to receive a dis17 tribution of funds allotted under section 224, a State shall 

18 submit to the Secretary an application at such time, in 

19 such manner, and containing such information as the Sec20 retary may require by rule and shall include in such appli21 cation—

22 (1) a State plan that satisfies the requirements 

23 of subsection (b); and 
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•HR 3780 IH 

1 (2) assurances of compliance satisfactory to the 

2 Secretary with respect to the requirements of section 

3 228. 

4 (b) REQUIREMENTS OF PLAN.—

5 (1) LEAD AGENCY.—The State plan shall iden6 tify the lead agency to make grants under this sub7 title for the State. 

8 (2) RECRUITMENT AND RETENTION OF CHILD

9 CARE PROVIDERS.—The State plan shall describe 

10 how the lead agency will encourage both the recruit11 ment of qualified child care providers who are new 

12 to the child care field and the retention of qualified 

13 child care providers who have a demonstrated com14 mitment to the child care field. 

15 (3) NOTIFICATION OF AVAILABILITY OF GRANTS

16 AND BENEFITS.—The State plan shall describe how 

17 the lead agency will identify all eligible child care 

18 providers in the State and notify the providers of the 

19 availability of grants and benefits under this sub20 title. 

21 (4) DISTRIBUTION OF GRANTS.—The State 

22 plan shall describe how the lead agency will make 

23 grants under sections 226 and 227 to eligible child 

24 care providers in selected geographical areas in the 

25 State in compliance with the following requirements: 
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•HR 3780 IH 

1 (A) SELECTION OF GEOGRAPHICAL

2 AREAS.—For the purpose of making such 

3 grants for a fiscal year, the State shall—

4 (i) select a variety of geographical 

5 areas, determined by the State, that, col6 lectively—

7 (I) include urban areas, suburban 

8 areas, and rural areas; and 

9 (II) are areas whose residents 

10 have diverse income levels; and 

11 (ii) give special consideration to geo12 graphical areas selected under this sub13 paragraph for the preceding fiscal year. 

14 (B) SELECTION OF CHILD CARE PRO15 VIDERS TO RECEIVE GRANTS.—In making 

16 grants under section 226, the State may make 

17 grants only to eligible child care providers in 

18 geographical areas selected under subparagraph 

19 (A), but may give special consideration in such 

20 areas to eligible child care providers—

21 (i) who have attained a higher rel22 evant educational credential; 

23 (ii) who provide a specific kind of 

24 child care services;
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•HR 3780 IH 

1 (iii) who provide child care services to 

2 populations who meet specific economic 

3 characteristics; or 

4 (iv) who meet such other criteria as 

5 the State may establish. 

6 (C) LIMITATION.—The State shall describe 

7 how the State will ensure that grants made 

8 under section 226 to child care providers will 

9 not be used to offset reductions in the com10 pensation of such providers. 

11 (D) REPORTING REQUIREMENT.—With re12 spect to each particular geographical area se13 lected under subparagraph (A), the State shall 

14 provide an assurance that the State will, for 

15 each fiscal year for which such State receives a 

16 grant under section 226—

17 (i) include in the report required by 

18 section 229, detailed information regard19 ing—

20 (I) the continuity of employment 

21 of the grant recipients as child care 

22 providers with the same employer; 

23 (II) with respect to each em24 ployer that employed such a grant re25 cipient, whether such employer was 
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•HR 3780 IH 

1 accredited by a recognized national or 

2 State accrediting body during the pe3 riod of employment; and 

4 (III) to the extent practicable 

5 and available to the State, the rate 

6 and frequency of employment turnover 

7 of qualified child care providers 

8 throughout such area, 

9 during the 2-year period ending on the 

10 deadline for submission of applications for 

11 grants under section 226 for that fiscal 

12 year; and 

13 (ii) provide a follow-up report, not 

14 later than 90 days after the end of the suc15 ceeding fiscal year that includes informa16 tion regarding—

17 (I) the continuity of employment 

18 of the grant recipients as child care 

19 providers with the same employer; 

20 (II) with respect to each em21 ployer that employed such a grant re22 cipient, whether such employer was 

23 accredited by a recognized national or 

24 State accrediting body during the pe25 riod of employment; and 
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•HR 3780 IH 

1 (III) to the extent practicable 

2 and available to the State, detailed in3 formation regarding the rate and fre4 quency of employment turnover of 

5 qualified child care providers through6 out such area, 

7 during the 1-year period beginning on the 

8 date on which the grant to the State was 

9 made under section 226. 

10 (5) CHILD CARE PROVIDER DEVELOPMENT AND

11 RETENTION GRANT PROGRAM.—The State plan shall 

12 describe how the lead agency will determine the 

13 amounts of grants to be made under section 226 in 

14 accordance with the following requirements: 

15 (A) SUFFICIENT AMOUNTS.—The State 

16 shall demonstrate that the amounts of indi17 vidual grants to be made under section 226 will 

18 be sufficient—

19 (i) to encourage child care providers 

20 to improve their qualifications; and 

21 (ii) to retain qualified child care pro22 viders in the child care field. 

23 (B) AMOUNTS TO CREDENTIALED PRO24 VIDERS.—Such grants made to eligible child 

25 care providers who have a child development as-
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•HR 3780 IH 

1 sociate credential (or equivalent) and who are 

2 employed full-time to provide child care services 

3 shall be in an amount that is not less than 

4 $1,000 per year. 

5 (C) AMOUNTS TO PROVIDERS WITH HIGH6 ER LEVELS OF EDUCATION.—The State shall 

7 make such grants in amounts greater than 

8 $1,000 per year to eligible child care providers 

9 who have higher levels of education than the 

10 education required for a credential such as a 

11 child development associate credential (or equiv12 alent), according to the following requirements: 

13 (i) PROVIDERS WITH BACCALAUREATE

14 DEGREES IN RELEVANT FIELDS.—An eligi15 ble child care provider who has a bacca16 laureate degree in the area of child devel17 opment or early child education shall re18 ceive a grant under section 226 in an 

19 amount that is not less than twice the 

20 amount of the grant that is made under 

21 section 226 to an eligible child care pro22 vider who has an associate of the arts de23 gree in the area of child development or 

24 early child education. 
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•HR 3780 IH 

1 (ii) PROVIDERS WITH ASSOCIATE DE2 GREES.—An eligible child care provider 

3 who has an associate of the arts degree in 

4 the area of child development or early child 

5 education shall receive a grant under sec6 tion 226 in an amount that is not less 

7 than 150 percent of the amount of the 

8 grant that is made under section 226 to an 

9 eligible child care provider who has a child 

10 development associate credential (or equiv11 alent) and is employed full-time to provide 

12 child care services. 

13 (iii) OTHER PROVIDERS WITH BACCA14 LAUREATE DEGREES.—

15 (I) IN GENERAL.—Except as pro16 vided in subclause (II), an eligible 

17 child care provider who has a bacca18 laureate degree in a field other than 

19 child development or early child edu20 cation shall receive a grant under sec21 tion 226 in an amount equal to the 

22 amount of the grant that is made 

23 under section 226 to an eligible child 

24 care provider who has an associate of
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•HR 3780 IH 

1 the arts degree in the area of child de2 velopment or early child education. 

3 (II) EXCEPTION.—If an eligible 

4 child care provider who has such a 

5 baccalaureate degree obtains addi6 tional educational training in the area 

7 of child development or early child 

8 education, as specified by the State, 

9 such provider shall receive a grant 

10 under section 226 in an amount equal 

11 to the amount of the grant that is 

12 made under section 226 to an eligible 

13 child care provider who has a bacca14 laureate degree specified in clause (i). 

15 (D) AMOUNTS TO FULL-TIME PRO16 VIDERS.—The State shall make a grant under 

17 section 226 to an eligible child care provider 

18 who works full-time in a greater amount than 

19 the amount of the grant that is made under 

20 section 226 to an eligible child care provider 

21 who works part-time, based on the State defini22 tions of full-time and part-time work. 

23 (E) AMOUNTS TO EXPERIENCED PRO24 VIDERS.—The State shall make grants under 

25 section 226 in progressively larger amounts to 
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•HR 3780 IH 

1 eligible child care providers to reflect the num2 ber of years worked as child care providers. 

3 (6) DISTRIBUTION OF CHILD CARE PROVIDER

4 SCHOLARSHIPS.—The State plan shall describe how 

5 the lead agency will make grants for scholarships in 

6 compliance with section 227 and shall specify the 

7 types of educational and training programs for 

8 which the scholarship grants made under such sec9 tion may be used, including only programs that—

10 (A) are administered by institutions of 

11 higher education that are eligible to participate 

12 in student financial assistance programs under 

13 title IV of the Higher Education Act of 1965 

14 (20 U.S.C. 1070 et seq.); and 

15 (B) lead to a State or nationally recog16 nized credential in the area of child develop17 ment or early child education, an associate of 

18 the arts degree in the area of child development 

19 or early child education, or a baccalaureate de20 gree in the area of child development or early 

21 child education. 

22 (7) EMPLOYER CONTRIBUTION.—The State 

23 plan shall describe how the lead agency will encour24 age employers of child care providers to contribute 
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•HR 3780 IH 

1 to the attainment of education goals by eligible child 

2 care providers who receive grants under section 227. 

3 (8) SUPPLEMENTATION.—The State plan shall 

4 provide assurances that amounts received by the 

5 State to carry out sections 226, 227, and 228 will 

6 be used only to supplement, and not to supplant, 

7 Federal, State, and local funds otherwise available to 

8 support existing services and activities (as of the 

9 date the amounts are used) that—

10 (A) encourage child care providers to im11 prove their qualifications and that promote the 

12 retention of qualified child care providers in the 

13 child care field; or 

14 (B) provide health benefits coverage for 

15 child care providers. 

16 SEC. 226. CHILD CARE PROVIDER DEVELOPMENT AND RE17 TENTION GRANT PROGRAM. 

18 (a) IN GENERAL.—A State that receives funds allot19 ted under section 224 and made available to carry out this 

20 section shall expend such funds to pay for the Federal 

21 share of the cost of making grants to eligible child care 

22 providers in accordance with this section, to improve the 

23 qualifications and promote the retention of qualified child 

24 care providers. 
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•HR 3780 IH 

1 (b) ELIGIBILITY TO RECEIVE GRANTS.—To be eligi2 ble to receive a grant under this section, a child care pro3 vider shall—

4 (1) have a child development associate creden5 tial (or equivalent), an associate of the arts degree 

6 in the area of child development or early child edu7 cation, a baccalaureate degree in the area of child 

8 development or early child education, or a bacca9 laureate degree in an unrelated field; and 

10 (2) be employed as a child care provider for not 

11 less than 1 calendar year, or (if the provider is em12 ployed on the date of the eligibility determination in 

13 a child care program that operates for less than a 

14 full calendar year) the program equivalent of 1 cal15 endar year, ending on the date of the application for 

16 such grant, except that not more than 3 months of 

17 education related to child development or to early 

18 child education obtained during the corresponding 

19 calendar year may be treated as employment that 

20 satisfies the requirements of this paragraph. 

21 (c) PRESERVATION OF ELIGIBILITY.—A State shall 

22 not take into consideration whether a child care provider 

23 is receiving, may receive, or may be eligible to receive any 

24 funds or benefits under any other provision of this subtitle 
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•HR 3780 IH 

1 for purposes of selecting eligible child care providers to 

2 receive grants under this section. 

3 SEC. 227. CHILD CARE PROVIDER SCHOLARSHIP PROGRAM. 

4 (a) IN GENERAL.—A State that receives funds allot5 ted under section 224 and made available to carry out this 

6 section shall expend such funds to pay for the Federal 

7 share of the cost of making scholarship grants to eligible 

8 child care providers in accordance with this section, to im9 prove their educational qualifications to provide child care 

10 services. 

11 (b) ELIGIBILITY REQUIREMENT FOR SCHOLARSHIP

12 GRANTS.—To be eligible to receive a scholarship grant 

13 under this section, a child care provider shall be employed 

14 as a child care provider for not less than 1 calendar year, 

15 or (if the provider is employed on the date of the eligibility 

16 determination in a child care program that operates for 

17 less than a full calendar year) the program equivalent of 

18 1 calendar year, ending on the date of the application for 

19 such grant. 

20 (c) SELECTION OF GRANTEES.—For purposes of se21 lecting eligible child care providers to receive scholarship 

22 grants under this section and determining the amounts of 

23 such grants, a State shall not—

24 (1) take into consideration whether a child care 

25 provider is receiving, may receive, or may be eligible
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1 to receive any funds or benefits under any other pro2 vision of this subtitle, or under any other Federal 

3 or State law that provides funds for educational pur4 poses; or 

5 (2) consider as resources of such provider any 

6 funds such provider is receiving, may receive, or may 

7 be eligible to receive under any other provision of 

8 this subtitle, under any other Federal or State law 

9 that provides funds for educational purposes, or 

10 from a private entity. 

11 (d) COST-SHARING REQUIRED.—The amount of a 

12 scholarship grant made under this section to an eligible 

13 child care provider shall be less than the cost of the edu14 cational or training program for which such grant is made. 

15 (e) ANNUAL MAXIMUM SCHOLARSHIP GRANT

16 AMOUNT.—The maximum aggregate dollar amount of a 

17 scholarship grant made by a State to an eligible child care 

18 provider under this section in a fiscal year shall be $1,500. 

19 SEC. 228. CHILD CARE PROVIDER HEALTH BENEFITS COV20 ERAGE. 

21 (a) SHORT TITLE.—This section may be cited as the 

22 ‘‘Healthy Early Education Workforce Grant Program 

23 Act’’. 

24 (b) DEFINITION.—In this section, the terms ‘‘depend25 ent’’, ‘‘domestic partner’’, and ‘‘spouse’’, used with respect 
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1 to a State, have the meanings given the terms by the 

2 State. 

3 (c) GENERAL AUTHORITY.—A State that receives 

4 funds allotted under section 224 and made available to 

5 carry out this section shall expend such funds to pay for 

6 the Federal share of the cost of providing access to afford7 able health benefits coverage for—

8 (1) eligible child care providers; and 

9 (2) at the discretion of the State involved, the 

10 spouses, domestic partners, and dependents of such 

11 providers. 

12 (d) PERMISSIBLE ACTIVITIES.—In carrying out sub13 section (c), the State may expend such funds for any of 

14 the following: 

15 (1) To reimburse an employer of an eligible 

16 child care provider, or the provider, for the employ17 er’s or provider’s share (or a portion of the share) 

18 of the premiums or other costs for coverage under 

19 group or individual health plans. 

20 (2) To offset the cost of enrolling eligible child 

21 care providers in public health benefits plans, such 

22 as the medicaid program under title XIX of the So23 cial Security Act (42 U.S.C. 1396 et seq.), the State 

24 children’s health insurance program under title XXI 
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1 of such Act (42 U.S.C. 1397aa et seq.), or public 

2 employee health benefit plans. 

3 (3) To otherwise subsidize the cost of health 

4 benefits coverage for eligible child care providers. 

5 (e) ELIGIBILITY CRITERIA FOR HEALTH BENEFITS

6 COVERAGE.—The State may establish criteria to limit the 

7 child care providers who may receive benefits through the 

8 allotment. 

9 (f) SELECTION OF GRANTEES.—For purposes of se10 lecting eligible child care providers to receive benefits 

11 under this section for a fiscal year, a State shall give—

12 (1) highest priority to—

13 (A) providers that meet any applicable cri14 teria established in accordance with subsection 

15 (e) and received such assistance during the pre16 vious fiscal year; and 

17 (B) at the State’s discretion, the spouses, 

18 domestic partners, and dependents of such pro19 viders; and 

20 (2) second highest priority to—

21 (A) providers that meet any applicable cri22 teria established in accordance with subsection 

23 (e) and are accredited by the National Associa24 tion for the Education of Young Children or the 
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1 National Association for Family Child Care; 

2 and 

3 (B) at the State’s discretion, the spouses, 

4 domestic partners, and dependents of such pro5 viders. 

6 SEC. 229. ANNUAL REPORT. 

7 A State that receives funds appropriated to carry out 

8 this subtitle for a fiscal year shall submit to the Secretary, 

9 not later than 90 days after the end of such fiscal year, 

10 a report—

11 (1) specifying the uses for which the State ex12 pended such funds, and the aggregate amount of 

13 funds (including State funds) expended for each of 

14 such uses; 

15 (2) containing available data relating to grants 

16 made and benefits provided with such funds, includ17 ing—

18 (A) the number of eligible child care pro19 viders who received such grants and benefits; 

20 (B) the amounts of such grants and bene21 fits; 

22 (C) any other information that describes or 

23 evaluates the effectiveness of this subtitle; 
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1 (D) the particular geographical areas se2 lected under section 225 for the purpose of 

3 making such grants; 

4 (E) with respect to grants made under sec5 tion 226—

6 (i) the number of years grant recipi7 ents have been employed as child care pro8 viders; 

9 (ii) the level of training and education 

10 of grant recipients; 

11 (iii) to the extent practicable and 

12 available to the State, detailed information 

13 regarding the salaries and other compensa14 tion received by grant recipients to provide 

15 child care services before, during, and after 

16 receiving such grants; 

17 (iv) the number of children who re18 ceived child care services provided by grant 

19 recipients; 

20 (v) information on family demo21 graphics of such children; 

22 (vi) the types of settings described in 

23 subparagraphs (A), (B), and (C) of section 

24 222(1) in which grant recipients are em25 ployed; and
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1 (vii) the ages of the children who re2 ceived child care services provided by grant 

3 recipients; 

4 (F) with respect to grants made under sec5 tion 227—

6 (i) the number of years grant recipi7 ents have been employed as child care pro8 viders; 

9 (ii) the level of training and education 

10 of grant recipients; 

11 (iii) to the extent practicable and 

12 available to the State, detailed information 

13 regarding the salaries and other compensa14 tion received by grant recipients to provide 

15 child care services before, during, and after 

16 receiving such grants; 

17 (iv) the types of settings described in 

18 subparagraphs (A), (B), and (C) of section 

19 222(1) in which grant recipients are em20 ployed; 

21 (v) the ages of the children who re22 ceived child care services provided by grant 

23 recipients; 
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1 (vi) the number of course credits or 

2 credentials obtained by grant recipients; 

3 and 

4 (vii) the amount of time taken for 

5 completion of the educational and training 

6 programs for which such grants were 

7 made; and 

8 (G) such other information as the Sec9 retary may require by rule. 

10 SEC. 230. EVALUATION OF HEALTH BENEFITS PROGRAMS 

11 BY SECRETARY. 

12 (a) EVALUATION.—The Secretary shall conduct an 

13 evaluation of several State programs carried out with 

14 grants made under section 228, representing various ap15 proaches to raising the rate of child care providers with 

16 health benefits coverage. 

17 (b) ASSESSMENT OF IMPACTS.—In evaluating State 

18 programs under subsection (a), the Secretary may con19 sider any information appropriate to measure the success 

20 of the programs, and shall assess the impact of the pro21 grams on the following: 

22 (1) The rate of child care providers with health 

23 benefits coverage. 

24 (2) The take-up rate by eligible child care pro25 viders. 
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1 (3) The turnover rate in the child care field. 

2 (4) The average wages paid to a child care pro3 vider. 

4 (c) REPORT.—Not later than 3 years after the date 

5 of enactment of this subtitle, the Secretary shall prepare 

6 and submit a report to Congress containing the results 

7 of the evaluation conducted under subsection (a), together 

8 with recommendations for strengthening programs carried 

9 out with grants made under section 228. 

10 SEC. 231. AUTHORIZATION OF APPROPRIATIONS. 

11 (a) CHILD CARE PROVIDER DEVELOPMENT, RETEN12 TION, AND SCHOLARSHIPS.—There are authorized to be 

13 appropriated to carry out the activities described in sec14 tions 226 and 227 $500,000,000 for fiscal year 2004 and 

15 such sums as may be necessary for each of fiscal years 

16 2005 through 2008. 

17 (b) CHILD CARE PROVIDER HEALTH BENEFITS COV18 ERAGE.—There is authorized to be appropriated to carry 

19 out the activities described in section 228 $200,000,000 

20 for fiscal year 2004 and such sums as may be necessary 

21 for each of fiscal years 2005 through 2008. 
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1 Subtitle C—Child Care Construc2 tion and Renovation Incentive 

3 Grants 

4 SEC. 241. SHORT TITLE. 

5 This subtitle may be cited as the ‘‘Child Care Con6 struction and Renovation Incentive Grants Act’’. 

7 SEC. 242. USE OF COMMUNITY DEVELOPMENT BLOCK 

8 GRANTS TO ESTABLISH CHILD CARE FACILI9 TIES. 

10 Section 105(a) of the Housing and Community De11 velopment Act of 1974 (42 U.S.C. 5305(a)) is amended—

12 (1) in paragraph (22), by striking ‘‘and’’ at the 

13 end; 

14 (2) in paragraph (23), by striking the period at 

15 the end and inserting a semicolon; 

16 (3) in paragraph (25), by striking the period at 

17 the end and inserting ‘‘; and’’; and 

18 (4) by adding at the end the following: 

19 ‘‘(26) the construction and renovation of child 

20 care facilities.’’. 

21 SEC. 243. INSURANCE FOR MORTGAGES ON NEW AND RE22 HABILITATED CHILD CARE FACILITIES. 

23 Title II of the National Housing Act (12 U.S.C. 1707 

24 et seq.) is amended by adding at the end the following: 
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1 ‘‘SEC. 257. MORTGAGE INSURANCE FOR CHILD CARE FA2 CILITIES. 

3 ‘‘(a) DEFINITIONS.—In this section: 

4 ‘‘(1) CHILD CARE FACILITY.—The term ‘child 

5 care facility’— 

6 ‘‘(A) means a public or private facility 

7 that—

8 ‘‘(i) has as its purpose the care and 

9 development of— 

10 ‘‘(I) children who are less than 

11 16 years of age; or 

12 ‘‘(II) school-age children and 

13 youth during non-school hours; and 

14 ‘‘(ii) is operated in accordance with all 

15 applicable State and local laws and regula16 tions; and 

17 ‘‘(B) does not include any facility for 

18 school-age children that is primarily for use 

19 during normal school hours. 

20 ‘‘(2) EQUIPMENT.—The term ‘equipment’ in21 cludes— 

22 ‘‘(A) machinery, utilities, and built-in 

23 equipment, and any necessary enclosure or 

24 structure to house them; and 

25 ‘‘(B) any other items necessary for the 

26 functioning of a particular facility as a child
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1 care facility, including necessary furniture, 

2 books, and curricular and program materials. 

3 ‘‘(3) FIRST MORTGAGE.—The term ‘first mort4 gage’— 

5 ‘‘(A) means such classes of first liens as 

6 are commonly given to secure advances (includ7 ing advances during construction) on, or the 

8 unpaid purchase price of, real estate under the 

9 laws of the State in which the real estate is lo10 cated, together with the credit instrument or in11 struments (if any) secured thereby; and 

12 ‘‘(B) includes any mortgage in the form of 

13 1 or more trust mortgages or mortgage inden14 tures or deeds of trust, securing notes, bonds, 

15 or other credit instruments, that, by the same 

16 instrument or by a separate instrument, creates 

17 a security interest in initial equipment, whether 

18 or not attached to the realty. 

19 ‘‘(4) MORTGAGE.—The term ‘mortgage’ means 

20 a first mortgage on real estate in fee simple, or on 

21 the interest of either the lessor or lessee thereof 

22 under a lease having a period of not less than 7 

23 years to run beyond the maturity date of the mort24 gage. 
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1 ‘‘(5) MORTGAGOR.—The term ‘mortgagor’ has 

2 the meaning given the term in section 207(a). 

3 ‘‘(b) INSURANCE OF MORTGAGES.—In order to facili4 tate the establishment and rehabilitation of child care fa5 cilities, the Secretary may—

6 ‘‘(1) insure a mortgage that is secured by a 

7 property or project that is—

8 ‘‘(A) a new child care facility, including a 

9 new addition to an existing child care facility 

10 (regardless of whether the existing facility is 

11 being rehabilitated); or 

12 ‘‘(B) a substantially rehabilitated child 

13 care facility, including equipment to be used in 

14 the operation of the facility; and 

15 ‘‘(2) make a commitment to insure any mort16 gage described in paragraph (1) before the date of 

17 execution or disbursement of the mortgage. 

18 ‘‘(c) TERMS AND CONDITIONS.—

19 ‘‘(1) ELIGIBLE CHILD CARE FACILITIES.—Each 

20 mortgage insured under this section shall be secured 

21 by a child care facility that the Secretary deter22 mines, during the 12-month period preceding the 

23 date on which the commitment to insure the mort24 gage is issued under this section, complies or will be 

25 in compliance within 12 months, with any laws, 
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1 standards, and requirements applicable to child care 

2 facilities under the laws of the State, municipality, 

3 or other unit of general local government in which 

4 the facility is or is to be located. 

5 ‘‘(2) APPROVED MORTGAGOR.—

6 ‘‘(A) IN GENERAL.—Each mortgage in7 sured under this section shall be executed by a 

8 mortgagor approved by the Secretary. 

9 ‘‘(B) REGULATION.—The Secretary may—

10 ‘‘(i) require an approved mortgagor 

11 who executes a mortgage under subpara12 graph (A) to be regulated with respect to 

13 charges and methods of financing and, if 

14 the mortgagor is a corporate entity, with 

15 respect to capital structure and rate of re16 turn; and 

17 ‘‘(ii) as an aid to the regulation of any 

18 mortgagor under clause (i), make such 

19 contracts with and acquire for not more 

20 than $100 such stock or interest in such 

21 mortgagor as the Secretary considers to be 

22 necessary. 

23 ‘‘(C) STOCK OR INTEREST.—Any stock or 

24 interest purchased under subparagraph (B)(ii) 

25 shall be— 
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1 ‘‘(i) paid for out of the General Insur2 ance Fund; and 

3 ‘‘(ii) redeemed by the mortgagor at 

4 par upon the termination of all obligations 

5 of the Secretary under the insurance. 

6 ‘‘(3) PRINCIPAL OBLIGATION.—Each mortgage 

7 insured under this section shall involve a principal 

8 obligation in an amount not to exceed 90 percent of 

9 the estimated value of the property or project, or 95 

10 percent of the estimated value of the property or 

11 project in the case of a mortgagor that is a private 

12 nonprofit corporation or association (as defined pur13 suant to section 221(d)(3)), including—

14 ‘‘(A) equipment to be used in the operation 

15 of the facility when the proposed improvements 

16 are completed and the equipment is installed; or 

17 ‘‘(B) a solar energy system (as defined in 

18 subparagraph (3) of the last paragraph of sec19 tion 2(a)) or residential energy conservation 

20 measures (as defined in subparagraphs (A) 

21 through (G) and (I) of section 210(11) of the 

22 National Energy Conservation Policy Act), in 

23 cases in which the Secretary determines that 

24 such measures are in addition to those required
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1 under the minimum property standards and will 

2 be cost-effective over the life of the measure. 

3 ‘‘(4) AMORTIZATION AND INTEREST.—Each 

4 mortgage insured under this section shall—

5 ‘‘(A) provide for complete amortization by 

6 periodic payments under such terms as the Sec7 retary shall prescribe; 

8 ‘‘(B) have a maturity date satisfactory to 

9 the Secretary, but in no event longer than 25 

10 years; and 

11 ‘‘(C) bear interest at such rate as may be 

12 agreed upon by the mortgagor and the mort13 gagee, and the Secretary shall not issue any 

14 regulations or establish any terms or conditions 

15 that interfere with the ability of the mortgagor 

16 and mortgagee to determine the interest rate. 

17 ‘‘(5) RELEASE.—The Secretary may consent to 

18 the release of a part or parts of the mortgaged prop19 erty or project from the lien of any mortgage in20 sured under this section upon such terms and condi21 tions as the Secretary may prescribe. 

22 ‘‘(6) MORTGAGE INSURANCE TERMS.—Sub23 sections (d), (e), (g), (h), (i), (j), (k), (l), and (n) of 

24 section 207 apply to any mortgage insured under 

25 this section, except that all references in such sub-
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1 sections to section 207 shall be construed, for pur2 poses of mortgage insurance under this section, to 

3 refer to this section. 

4 ‘‘(d) MORTGAGE INSURANCE FOR FIRE SAFETY

5 EQUIPMENT LOANS.—

6 ‘‘(1) AUTHORITY.—The Secretary may, upon 

7 such terms and conditions as the Secretary may pre8 scribe, make commitments to insure and insure 

9 loans made by financial institutions or other ap10 proved mortgagees to child care facilities to provide 

11 for the purchase and installation of fire safety equip12 ment necessary for compliance with the 1967 edition 

13 of the Life Safety Code of the National Fire Protec14 tion Association (or any subsequent edition specified 

15 by the Secretary of Health and Human Services). 

16 ‘‘(2) LOAN REQUIREMENTS.—To be eligible for 

17 insurance under this subsection a loan shall— 

18 ‘‘(A) not exceed the estimate by the Sec19 retary of the reasonable cost of the equipment 

20 fully installed; 

21 ‘‘(B) bear interest at such rate as may be 

22 agreed upon by the mortgagor and the mort23 gagee; 

24 ‘‘(C) have a maturity date satisfactory to 

25 the Secretary; 
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1 ‘‘(D) be made by a financial institution or 

2 other mortgagee approved by the Secretary as 

3 eligible for insurance under section 2 or a mort4 gagee approved under section 203(b)(1); 

5 ‘‘(E) comply with other such terms, condi6 tions, and restrictions as the Secretary may 

7 prescribe; and 

8 ‘‘(F) be made with respect to a child care 

9 facility that the Secretary determines, during 

10 the 12-month period preceding the date on 

11 which the commitment to insure the mortgage 

12 is issued under this subsection, complies or will 

13 be in compliance within 12 months, with any 

14 laws, standards, and requirements applicable to 

15 child care facilities under the laws of the State, 

16 municipality, or other unit of general local gov17 ernment in which the facility is or is to be lo18 cated. 

19 ‘‘(3) INSURANCE REQUIREMENTS.—

20 ‘‘(A) SECTION 2.—Subsections (c), (d), 

21 and (h) of section 2 shall apply to any loan in22 sured under this subsection, except that all ref23 erences in such subsections to ‘this section’ or 

24 ‘this title’ shall be construed, for purposes of 

25 this subsection, to refer to this subsection. 
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1 ‘‘(B) SECTION 220.—Paragraphs (5), (6), 

2 (7), (9), and (10) of section 220(h) shall apply 

3 to any loan insured under this subsection, ex4 cept that all references in such paragraphs to 

5 home improvement loans shall be construed, for 

6 purposes of this subsection, to refer to loans 

7 under this subsection. 

8 ‘‘(e) SCHEDULES AND DEADLINES.—The Secretary 

9 shall establish schedules and deadlines for the processing 

10 and approval (or provision of notice of disapproval) of ap11 plications for mortgage insurance under this section. 

12 ‘‘(f) LIMITATION ON INSURANCE AUTHORITY.—

13 ‘‘(1) TERMINATION.—No mortgage may be in14 sured under this section or section 223(h) after Sep15 tember 30, 2007, except pursuant to a commitment 

16 to insure issued on or before such date. 

17 ‘‘(2) AGGREGATE PRINCIPAL AMOUNT LIMITA18 TION.—

19 ‘‘(A) IN GENERAL.—The aggregate prin20 cipal amount of mortgages for which the Sec21 retary enters into commitments to insure under 

22 this section or section 223(h) on or before the 

23 date described in paragraph (1) may not exceed 

24 $2,000,000,000.
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1 ‘‘(B) REPORT.—If, on the date described 

2 in paragraph (1), the aggregate insurance au3 thority provided under this paragraph has not 

4 been fully used, the Secretary of the Treasury 

5 shall submit to Congress a report evaluating the 

6 need for continued mortgage insurance under 

7 this section. 

8 ‘‘(g) NONDISCRIMINATION REQUIREMENT.—

9 ‘‘(1) IN GENERAL.—A child care facility receiv10 ing assistance under this title may not discriminate 

11 on the basis of race, color, or national origin (to the 

12 extent provided in title VI of the Civil Rights Act of 

13 1964 (42 U.S.C. 2000d et seq.)), religion (subject to 

14 subparagraph (B)), national origin, sex (to the ex15 tent provided in title IX of the Education Amend16 ments of 1972 (20 U.S.C. 1681 et seq.)), or dis17 ability (to the extent provided in section 504 of the 

18 Rehabilitation Act of 1973 (29 U.S.C. 794)), under 

19 any program or activity receiving Federal financial 

20 assistance under this title. 

21 ‘‘(2) FACILITIES OF RELIGIOUS ORGANIZA22 TIONS.—The prohibition with respect to religion 

23 under paragraph (1) shall not apply to a child care 

24 facility that is controlled by, or that is closely identi25 fied with, the tenets of a particular religious organi-
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1 zation, if the application of this paragraph would not 

2 be consistent with the religious tenets of such orga3 nization. 

4 ‘‘(h) LIABILITY INSURANCE.—A child care provider 

5 operating a child care facility assisted under this section 

6 or section 223(h) shall obtain and maintain liability insur7 ance in such amounts and subject to such requirements 

8 as the Secretary considers to be appropriate. 

9 ‘‘(i) SMALL PURPOSE LOANS.—

10 ‘‘(1) IN GENERAL.—To the extent that amounts 

11 are made available pursuant to subsection (l), the 

12 Secretary shall make loans, directly or indirectly, to 

13 providers of child care facilities for reconstruction or 

14 renovation of such facilities, in accordance with this 

15 subsection. 

16 ‘‘(2) REQUIREMENTS.—A loan under this sub17 section—

18 ‘‘(A) may be made only for a child care fa19 cility that is financially and operationally viable, 

20 as determined under standards established by 

21 the Secretary; 

22 ‘‘(B) may not have a term to maturity ex23 ceeding 7 years; 

24 ‘‘(C) shall bear interest at a rate estab25 lished by the Secretary; and 
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1 ‘‘(D) shall be subject to such other terms 

2 and conditions as the Secretary may establish 

3 by regulation. 

4 ‘‘(3) AGGREGATE LOAN AMOUNT.—The aggre5 gate amount of loans under this subsection to a sin6 gle provider may not exceed $30,000. 

7 ‘‘(j) NOTIFICATION.—The Secretary shall take such 

8 actions as may be necessary to publicize the availability 

9 of the programs for mortgage insurance under this section 

10 and section 223(h), and the loan program under sub11 section (i) of this section, in a manner that ensures that 

12 information concerning such programs will be available to 

13 child care providers throughout the United States. 

14 ‘‘(k) REGULATIONS.—The Secretary shall—

15 ‘‘(1) issue any regulations necessary to carry 

16 out this section; and 

17 ‘‘(2) in carrying out paragraph (1), consult with 

18 the Secretary of Health and Human Services with 

19 respect to any aspects of the regulations regarding 

20 child care facilities. 

21 ‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—There is 

22 authorized to be appropriated to carry out this section 

23 $30,000,000 for fiscal year 2004, to remain available until 

24 expended, of which not more than 10 percent may be used 

25 for loans under subsection (i).’’. 
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1 SEC. 244. INSURANCE FOR MORTGAGES FOR ACQUISITION 

2 OR REFINANCING DEBT OF EXISTING CHILD 

3 CARE FACILITIES. 

4 (a) IN GENERAL.—Section 223 of the National 

5 Housing Act (12 U.S.C. 1715n) is amended by adding at 

6 the end the following: 

7 ‘‘(h) MORTGAGE INSURANCE FOR PURCHASE OR RE8 FINANCING OF EXISTING CHILD CARE FACILITIES.—

9 ‘‘(1) DEFINITIONS.—In this subsection, the 

10 terms that are defined in section 257(a) have the 

11 same meanings as in that section. 

12 ‘‘(2) AUTHORITY.—Notwithstanding any other 

13 provision of this Act, the Secretary may insure 

14 under any section of this title a mortgage executed 

15 in connection with— 

16 ‘‘(A) the purchase or refinancing of an ex17 isting child care facility; 

18 ‘‘(B) the purchase of a structure to serve 

19 as a child care facility; or 

20 ‘‘(C) the refinancing of existing debt of an 

21 existing child care facility. 

22 ‘‘(3) PURCHASE OF EXISTING FACILITIES AND

23 STRUCTURES.—In the case of the purchase under 

24 this subsection of an existing child care facility or 

25 purchase of an existing structure to serve as such a 

26 facility, the Secretary shall prescribe any terms and 
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1 conditions that the Secretary considers necessary to 

2 ensure that—

3 ‘‘(A) the facility or structure purchased 

4 continues to be used as a child care facility; and 

5 ‘‘(B) the facility complies with any laws, 

6 standards, and requirements applicable to child 

7 care facilities under the laws of the State, mu8 nicipality, or other unit of general local govern9 ment in which the facility is or is to be located. 

10 ‘‘(4) REFINANCING OF EXISTING FACILITIES.—

11 In the case of refinancing of an existing child care 

12 facility, the Secretary shall prescribe any terms and 

13 conditions that the Secretary considers necessary to 

14 ensure that—

15 ‘‘(A) the refinancing is used to lower the 

16 monthly debt service costs (taking into account 

17 any fees or charges connected with such refi18 nancing) of the existing facility; 

19 ‘‘(B) the proceeds of any refinancing will 

20 be employed only to retire the existing indebted21 ness and pay the necessary cost of refinancing 

22 on the existing facility; 

23 ‘‘(C) the existing facility is economically 

24 viable; and
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•HR 3780 IH 

1 ‘‘(D) the facility receives a certification of 

2 compliance under section 258(c). 

3 ‘‘(5) LIMITATION ON INSURANCE AUTHORITY.—

4 The authority of the Secretary to enter into commit5 ments to insure mortgages under this subsection is 

6 subject to section 257(f).’’. 

7 SEC. 245. STUDY OF AVAILABILITY OF SECONDARY MAR8 KETS FOR MORTGAGES ON CHILD CARE FA9 CILITIES. 

10 (a) STUDY.—The Secretary of the Treasury shall 

11 conduct a study of the secondary mortgage markets to de12 termine—

13 (1) whether such a market exists for purchase 

14 of mortgages eligible for insurance under sections 

15 223(h) and 257 of the National Housing Act (as 

16 added by this Act); 

17 (2) whether such a market would affect the 

18 availability of credit available for development of 

19 child care facilities or would lower development costs 

20 of such facilities; and 

21 (3) the extent to which such a market or other 

22 activities to provide credit enhancement for loans for 

23 child care facilities is needed to meet the demand for 

24 such facilities. 
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1 (b) REPORT.—Not later than 2 years after the date 

2 of enactment of this Act, the Secretary of the Treasury 

3 shall submit to Congress a report regarding the results 

4 of the study conducted under this section. 

5 SEC. 246. TECHNICAL AND FINANCIAL ASSISTANCE 

6 GRANTS. 

7 (a) DEFINITIONS.—In this section: 

8 (1) CHILD CARE FACILITY.—The term ‘‘child 

9 care facility’’ has the meaning given that term in 

10 section 257(a) of the National Housing Act, as 

11 added by section 243. 

12 (2) ELIGIBLE INTERMEDIARY.—The term ‘‘eli13 gible intermediary’’ means a private, nonprofit inter14 mediary organization that has demonstrated experi15 ence in—

16 (A) financing the construction and renova17 tion of physical facilities; 

18 (B) providing technical and financial as19 sistance to child care providers or other similar 

20 entities; 

21 (C) working with small businesses; and 

22 (D) securing private sources for capital fi23 nancing; and 

24 (3) ELIGIBLE RECIPIENT.—The term ‘‘eligible 

25 recipient’’ means any— 
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1 (A) existing or start-up center-based or 

2 home-based child care provider; and 

3 (B) organization in the process of estab4 lishing a center-based or home-based child care 

5 program or otherwise seeking to provide child 

6 care services. 

7 (4) EQUIPMENT.—The term ‘‘equipment’’ has 

8 the meaning given that term in section 257(a) of the 

9 National Housing Act, as added by section 243. 

10 (b) GRANT AUTHORITY.—The Secretary of Housing 

11 and Urban Development, in consultation with the Sec12 retary of Health and Human Services, may award grants 

13 on a competitive basis in accordance with this section to 

14 eligible intermediaries for use in accordance with sub15 sections (e) and (f). 

16 (c) APPLICATIONS.—To be eligible to receive a grant 

17 under this section an eligible intermediary shall submit to 

18 the Secretary an application, in such form and containing 

19 such information as the Secretary may require. 

20 (d) PRIORITY.—In awarding grants under this sec21 tion the Secretary shall give a priority to applicants under 

22 subsection (c) that serve low-income or rural areas. 

23 (e) USE OF FUNDS.—

24 (1) REVOLVING LOAN FUND.—Each eligible 

25 intermediary that receives a grant under this section 
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1 shall deposit the grant amount into a child care re2 volving loan fund established by the eligible inter3 mediary. 

4 (2) PAYMENTS FROM FUND.—Subject to sub5 section (f), from amounts deposited into the revolv6 ing loan fund under paragraph (1), each eligible 

7 intermediary shall provide technical and financial as8 sistance (in the form of loans, grants, investments, 

9 guarantees, interest subsidies, and other appropriate 

10 forms of assistance) to eligible recipients for the ac11 quisition or improvement of child care facilities or 

12 equipment. 

13 (3) LOAN REPAYMENTS AND INVESTMENT PRO14 CEEDS.—Any amount received by an eligible inter15 mediary from an eligible recipient in the form of a 

16 loan repayment or investment proceeds shall be de17 posited into the child care revolving fund of the eligi18 ble intermediary for redistribution to other eligible 

19 recipients in accordance with this section. 

20 (f) ALLOCATION OF FUNDS.—Of the amounts dis21 tributed from the revolving loan fund of an eligible inter22 mediary under subsection (e)(2) in each fiscal year—

23 (1) not less than 50 percent shall be used for 

24 the renovation or construction of child care facilities 

25 or the acquisition of equipment by eligible recipients, 
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1 except that the amount made available to any eligi2 ble recipient under this paragraph may not exceed 

3 40 percent of the total costs incurred by the eligible 

4 recipient in connection with such renovation, con5 struction, or acquisition; and 

6 (2) the amount remaining after distribution 

7 under paragraph (1), shall be used to provide direct 

8 assistance to eligible recipients in obtaining public or 

9 private financing for the renovation or construction 

10 of child care facilities and the acquisition of equip11 ment, including developing and implementing financ12 ing resources, options, and plans for those recipi13 ents. 

14 (g) DAVIS BACON ACT.—Subchapter IV of chapter 

15 31 of title 40, United States Code (popularly known as 

16 the Davis-Bacon Act) shall apply to actions taken under 

17 this Act. 

18 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated to carry out this section 

20 $10,000,000 for each of fiscal years 2004 through 2008.
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1 Subtitle D—Business Child Care 

2 Incentive Grant Program 

3 SEC. 251. BUSINESS CHILD CARE INCENTIVE GRANT PRO4 GRAM. 

5 (a) ESTABLISHMENT.—The Secretary of Health and 

6 Human Services (referred to in this section as the ‘‘Sec7 retary’’) shall establish a program to award grants to 

8 States, on a competitive basis, to assist States in providing 

9 funds to encourage the establishment and operation of em10 ployer operated child care programs. 

11 (b) APPLICATION.—To be eligible to receive a grant 

12 under this section, a State shall prepare and submit to 

13 the Secretary an application at such time, in such manner, 

14 and containing such information as the Secretary may re15 quire, including an assurance that the funds required 

16 under subsection (e) will be provided. 

17 (c) AMOUNT OF GRANT.—The Secretary shall deter18 mine the amount of a grant to a State under this section 

19 based on the population of children less than 5 years of 

20 age in the State as compared to the population of all 

21 States receiving grants under this section. 

22 (d) USE OF FUNDS.—

23 (1) IN GENERAL.—A State shall use amounts 

24 provided under a grant awarded under this section 

25 to provide assistance to businesses located in the 
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1 State to enable the businesses to establish and oper2 ate child care programs. Such assistance may in3 clude—

4 (A) technical assistance in the establish5 ment of a child care program; 

6 (B) assistance for the startup costs related 

7 to a child care program; 

8 (C) assistance for the training of child care 

9 providers; 

10 (D) scholarships for low-income wage earn11 ers; 

12 (E) the provision of services to care for 

13 sick children or to provide care to school aged 

14 children; 

15 (F) the entering into of contracts with 

16 local resource and referral or local health de17 partments; 

18 (G) assistance for care for children with 

19 disabilities; or 

20 (H) assistance for any other activity deter21 mined appropriate by the State. 

22 (2) APPLICATION.—To be eligible to receive as23 sistance from a State under this section, a business 

24 shall prepare and submit to the State an application 
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1 at such time, in such manner, and containing such 

2 information as the State may require. 

3 (3) PREFERENCE.—

4 (A) IN GENERAL.—In providing assistance 

5 under this section, a State shall give priority to 

6 applicants that desire to form a consortium to 

7 provide child care in a geographic area within 

8 the State where such care is not generally avail9 able or accessible.

10 (B) CONSORTIUM.—For purposes of sub11 paragraph (A), a consortium shall be made up 

12 of 2 or more entities that may include busi13 nesses, nonprofit agencies or organizations, 

14 local governments, or other appropriate entities. 

15 (4) LIMITATION.—With respect to grant funds 

16 received under this section, a State may not provide 

17 in excess of $100,000 in assistance from such funds 

18 to any single applicant. 

19 (e) MATCHING REQUIREMENT.—To be eligible to re20 ceive a grant under this section a State shall provide as21 surances to the Secretary that, with respect to the costs 

22 to be incurred by an entity receiving assistance in carrying 

23 out activities under this section, the entity will make avail24 able (directly or through donations from public or private 
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1 entities) non-Federal contributions to such costs in an 

2 amount equal to—

3 (1) for the first fiscal year in which the entity 

4 receives such assistance, not less than 50 percent of 

5 such costs ($1 for each $1 of assistance provided to 

6 the entity under the grant); 

7 (2) for the second fiscal year in which the entity receives such assistance, not less than 662 8 ⁄3 per9 cent of such costs ($2 for each $1 of assistance pro10 vided to the entity under the grant); and 

11 (3) for the third fiscal year in which the entity 

12 receives such assistance, not less than 75 percent of 

13 such costs ($3 for each $1 of assistance provided to 

14 the entity under the grant). 

15 (f) REQUIREMENTS OF PROVIDERS.—To be eligible 

16 to receive assistance under a grant awarded under this 

17 section a child care provider shall comply with all applica18 ble State and local licensing and regulatory requirements 

19 and all applicable health and safety standards in effect 

20 in the State. 

21 (g) ADMINISTRATION.—

22 (1) STATE RESPONSIBILITY.—A State shall 

23 have responsibility for administering a grant award24 ed for the State under this section and for moni-
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1 toring entities that receive assistance under such 

2 grant. 

3 (2) AUDITS.—A State shall require each entity 

4 receiving assistance under the grant awarded under 

5 this section to conduct an annual audit with respect 

6 to the activities of the entity. Such audits shall be 

7 submitted to the State. 

8 (3) MISUSE OF FUNDS.—

9 (A) REPAYMENT.—If the State determines, 

10 through an audit or otherwise, that an entity 

11 receiving assistance under a grant awarded 

12 under this section has misused the assistance, 

13 the State shall notify the Secretary of the mis14 use. The Secretary, upon such a notification, 

15 may seek from such an entity the repayment of 

16 an amount equal to the amount of any such 

17 misused assistance plus interest. 

18 (B) APPEALS PROCESS.—The Secretary 

19 shall by regulation provide for an appeals proc20 ess with respect to repayments under this para21 graph. 

22 (h) REPORTING REQUIREMENTS.—

23 (1) 2-YEAR STUDY.—

24 (A) IN GENERAL.—Not later than 2 years 

25 after the date on which the Secretary first
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1 awards grants under this section, the Secretary 

2 shall conduct a study to determine—

3 (i) the capacity of entities to meet the 

4 child care needs of communities within 

5 States; 

6 (ii) the kinds of partnerships that are 

7 being formed with respect to child care at 

8 the local level to carry out programs fund9 ed under this section; and 

10 (iii) who is using the programs funded 

11 under this section and the income levels of 

12 such individuals. 

13 (B) REPORT.—Not later than 28 months 

14 after the date on which the Secretary first 

15 awards grants under this section, the Secretary 

16 shall prepare and submit to the appropriate 

17 committees of Congress a report on the results 

18 of the study conducted in accordance with sub19 paragraph (A). 

20 (2) 4-YEAR STUDY.—

21 (A) IN GENERAL.—Not later than 4 years 

22 after the date on which the Secretary first 

23 awards grants under this section, the Secretary 

24 shall conduct a study to determine the number 

25 of child care facilities funded through entities 
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1 that received assistance through a grant award2 ed under this section that remain in operation 

3 and the extent to which such facilities are meet4 ing the child care needs of the individuals 

5 served by such facilities. 

6 (B) REPORT.—Not later than 52 months 

7 after the date on which the Secretary first 

8 awards grants under this section, the Secretary 

9 shall prepare and submit to the appropriate 

10 committees of Congress a report on the results 

11 of the study conducted in accordance with sub12 paragraph (A). 

13 (i) DEFINITION.—In this section, the term ‘‘busi14 ness’’ means an employer who employed an average of at 

15 least 2 employees on business days during the preceding 

16 calendar year. 

17 (j) AUTHORIZATION OF APPROPRIATIONS.—

18 (1) IN GENERAL.—There is authorized to be 

19 appropriated to carry out this section, $60,000,000 

20 for the period of fiscal years 2004 through 2006. 

21 (2) EVALUATIONS AND ADMINISTRATION.—

22 With respect to the total amount appropriated for 

23 such period in accordance with this subsection, not 

24 more than $5,000,000 of that amount may be used 

25 for expenditures related to conducting evaluations 
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1 required under, and the administration of, this sec2 tion. 

3 (k) TERMINATION OF PROGRAM.—The program es4 tablished under subsection (a) shall terminate on Sep5 tember 30, 2007. 

6 TITLE III—PRE-SCHOOL, IN7 SCHOOL, AND AFTERSCHOOL 

8 ASSISTANCE 

9 Subtitle A—Universal 

10 Prekindergarten Act 

11 SEC. 301. SHORT TITLE. 

12 This subtitle may be cited as the ‘‘Universal Pre13 kindergarten Act’’. 

14 SEC. 302. FINDINGS AND PURPOSE. 

15 (a) FINDINGS.—The Congress finds the following: 

16 (1) High-quality prekindergarten programs help 

17 children to succeed academically. Children who at18 tended a high-quality prekindergarten program have 

19 higher academic achievement, lower rates of grade 

20 retention, are less likely to be placed in special edu21 cation, and graduate from high school at higher 

22 rates than those who did not. 

23 (2) Early childhood education can reduce juve24 nile delinquency rates. A 15-year study following 

25 989 low-income children who attended high-quality, 
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1 comprehensive prekindergarten found that they were 

2 33 percent less likely to be arrested, and 42 percent 

3 less likely to be arrested for a violent crime, than 

4 children in the control group. 

5 (3) There is currently a drastic shortage of af6 fordable, quality early education programs that are 

7 accessible for working families. 

8 (4) Full-day, full-calendar-year universal pre9 kindergarten programs would ensure all children 3, 

10 4, and 5 years old have access to school readiness 

11 programs and quality child care. 

12 (5) Research shows that investing in quality 

13 prekindergarten programs will provide savings in the 

14 form of reduced need for remedial education, de15 creased crime rates, lower school dropout rates, and 

16 decreased welfare dependence. 

17 (b) PURPOSE.—The purpose of this subtitle is to en18 sure that all children 3, 4, and 5 years old have access 

19 to a high-quality full-day, full-calendar-year prekinder20 garten program by providing grants to States to assist in 

21 developing a universal prekindergarten program that is 

22 voluntary and free-of-charge. 
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1 SEC. 303. PREKINDERGARTEN GRANT PROGRAM AUTHOR2 IZATION. 

3 The Secretary of Health and Human Services, in con4 sultation with the Secretary of Education, shall provide 

5 grants to an agency designated by each State (hereafter 

6 in this subtitle referred to as the ‘‘designated State agen7 cy’’) for the development of high-quality full-day, full-cal8 endar-year universal prekindergarten programs for all 

9 children 3, 4, and 5 years old in the State. 

10 SEC. 304. STATE REQUIREMENTS. 

11 (a) STATE MATCHING FUNDS.—Federal funds made 

12 available to a designated State agency under this subtitle 

13 shall be matched at least 20 percent by State funds. 

14 (b) STATE APPLICATION.—To be eligible to receive 

15 funds under this subtitle, a designated State agency shall 

16 submit an application at such time, in such manner, and 

17 containing such information as the Secretary of Health 

18 and Human Services may require. The application shall 

19 include the following: 

20 (1) How the designated State agency, in over21 seeing the State’s universal prekindergarten pro22 gram, will coordinate with other State agencies re23 sponsible for early childhood education and health 

24 programs.
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1 (2) A State plan to establish and implement a 

2 statewide universal prekindergarten program, in ac3 cordance with subsection (c). 

4 (c) STATE PLAN.—The State plan required under 

5 subsection (b)(2) shall include each of the following: 

6 (1) A description of the universal prekinder7 garten program that will be established and how it 

8 will support children’s cognitive, social, emotional, 

9 and physical development. 

10 (2) A statement of the goals for universal pre11 kindergarten programs and how program outcomes 

12 will be measured. 

13 (3) A description of—

14 (A) how funding will be distributed to eli15 gible prekindergarten program providers based 

16 on the need for early childhood education in 

17 each geographical area served by such pro18 viders; and 

19 (B) how the designated State agency will 

20 involve representatives of early childhood pro21 gram providers (including child care providers, 

22 Head Start programs, and State and local 

23 agencies) that sponsor programs addressing 

24 children 3, 4, and 5 years old. 
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1 (4) A description of how the designated State 

2 agency will coordinate with existing State-funded 

3 prekindergarten programs, federally funded pro4 grams (such as Head Start programs), public school 

5 programs, and child care providers. 

6 (5) A description of how an eligible prekinder7 garten program provider may apply to the des8 ignated State agency for funding under this Act. 

9 (6) A plan to address the shortages of qualified 

10 early childhood education teachers, including how to 

11 increase such teachers’ compensation to be com12 parable to that of public school teachers. 

13 (7) How the designated State agency will pro14 vide ongoing professional development opportunities 

15 to help increase the number of teachers in early 

16 childhood programs who meet the State’s education 

17 or credential requirements for prekindergarten 

18 teachers. 

19 (8) A plan to address how the universal pre20 kindergarten program will meet the needs of chil21 dren with disabilities, limited English proficiency, 

22 and other special needs. 

23 (9) A plan to provide transportation to children 

24 to and from the universal prekindergarten program. 
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1 (10) A description of how the State will provide 

2 the 20 percent match of Federal funds. 

3 (d) ADMINISTRATION.—A designated State agency 

4 may not use more than 5 percent of a grant under this 

5 subtitle for costs associated with State administration of 

6 the program under this subtitle. 

7 SEC. 305. LOCAL REQUIREMENTS. 

8 (a) IN GENERAL.—An eligible prekindergarten pro9 gram provider receiving funding under this subtitle 

10 shall—

11 (1) maintain a maximum class size of 20 chil12 dren; 

13 (2) maintain a ratio of not more than 10 chil14 dren for each member of the teaching staff; 

15 (3)(A) ensure that all prekindergarten teachers 

16 meet the requirements for teachers at a State-fund17 ed prekindergarten program under an applicable 

18 State law; and 

19 (B) document that the State is demonstrating 

20 significant progress in assisting prekindergarten 

21 teachers on working toward a bachelor of arts de22 gree with training in early childhood development or 

23 early childhood education; 
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1 (4)(A) be accredited by a national organization 

2 with demonstrated experience in accrediting pre3 kindergarten programs; or 

4 (B) provide assurances that it shall obtain such 

5 accreditation not later than 3 years after first re6 ceiving funding under this subtitle; and 

7 (5) meet applicable State and local child care li8 censing health and safety standards. 

9 (b) LOCAL APPLICATION.—Eligible prekindergarten 

10 program providers desiring to receive funding under this 

11 subtitle shall submit an application to the designated 

12 State agency overseeing funds under this subtitle con13 taining the following: 

14 (1) A description of the prekindergarten pro15 gram. 

16 (2) A statement of the demonstrated need for 

17 a program, or an enhanced or expanded program, in 

18 the area served by the eligible prekindergarten pro19 gram provider. 

20 (3) A description of the age-appropriate and de21 velopmentally appropriate educational curriculum to 

22 be provided that will help children be ready for 

23 school and assist them in the transition to kinder24 garten. 
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1 (4) A description of how the eligible prekinder2 garten program provider will collaborate with exist3 ing community-based child care providers and Head 

4 Start programs. 

5 (5) A description of how students and families 

6 will be assisted in obtaining supportive services 

7 available in their communities. 

8 (6) A plan to promote parental involvement in 

9 the prekindergarten program. 

10 (7) A description of how teachers will receive 

11 ongoing professional development in early childhood 

12 development and education. 

13 (8) An assurance that prekindergarten pro14 grams receiving funds under this subtitle provide the 

15 data required in section 7(c). 

16 SEC. 306. PROFESSIONAL DEVELOPMENT SET-ASIDE. 

17 (a) IN GENERAL.—A designated State agency may 

18 set aside up to 5 percent of a grant under this subtitle 

19 for ongoing professional development activities for teach20 ers and staff at prekindergarten programs that wish to 

21 participate in the universal prekindergarten grant pro22 gram under this subtitle. A designated State agency using 

23 the set-aside for professional development must include in 

24 its application the following:
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1 (1) A description of how the designated State 

2 agency will ensure that eligible prekindergarten pro3 gram providers in a range of settings (including 

4 child care providers, Head Start programs, and 

5 schools) will participate in the professional develop6 ment programs. 

7 (2) An assurance that, in developing its applica8 tion and in carrying out its program, the profes9 sional development provider has consulted, and will 

10 consult, with relevant agencies, early childhood orga11 nizations, early childhood education experts, and 

12 early childhood program providers. 

13 (3) A description of how the designated State 

14 agency will ensure that the professional development 

15 is ongoing and accessible to educators in all geo16 graphic areas of the State, including by the use of 

17 advanced educational technologies. 

18 (4) A description of how the designated State 

19 agency will ensure that such set-aside funds will be 

20 used to pay the cost of additional education and 

21 training. 

22 (5) A description of how the designated State 

23 agency will work with other agencies and institutions 

24 of higher education to provide scholarships and 

25 other financial assistance to prekindergarten staff. 
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1 (6) A description of how the State educational 

2 agency will provide a financial incentive, such as a 

3 financial stipend or a bonus, to educators who par4 ticipate in and complete such professional develop5 ment. 

6 (7) A description of how the professional devel7 opment activities will be carried out, including the 

8 following: 

9 (A) How programs and educators will be 

10 selected to participate. 

11 (B) How professional development pro12 viders will be selected, based on demonstrated 

13 experience in providing research-based profes14 sional development to early childhood educators. 

15 (C) The types of research-based profes16 sional development activities that will be carried 

17 out in all domains of children’s physical, cog18 nitive, social, and emotional development and 

19 on early childhood pedagogy. 

20 (D) How the program will train early 

21 childhood educators to meet the diverse edu22 cational needs of children in the community, es23 pecially children who have limited English pro24 ficiency, disabilities, and other special needs. 
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1 (E) How the program will coordinate with 

2 and build upon, but not supplant or duplicate, 

3 early childhood education professional develop4 ment activities that exist in the community. 

5 (b) USES OF FUNDS.—Funds set aside under this 

6 section may be used for ongoing professional develop7 ment—

8 (1) to provide prekindergarten teachers and 

9 staff with the knowledge and skills for the applica10 tion of recent research on child cognitive, social, 

11 emotional, and physical development, including lan12 guage and literacy development, and on early child13 hood pedagogy; 

14 (2) to provide the cost of education needed to 

15 obtain a credential or degree with specific training 

16 in early childhood development or education; 

17 (3) to work with children who have limited 

18 English proficiency, disabilities, and other special 

19 needs; and 

20 (4) to select and use developmentally appro21 priate screening and diagnostic assessments to im22 prove teaching and learning and make appropriate 

23 referrals for services to support prekindergarten 

24 children’s development and learning. 
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1 SEC. 307. REPORTING. 

2 (a) REPORT BY SECRETARY.—For each year in which 

3 funding is provided under this subtitle, the Secretary of 

4 Health and Human Services shall submit an annual report 

5 to the Congress on the implementation and effectiveness 

6 of the universal prekindergarten program under this sub7 title. 

8 (b) REPORT BY DESIGNATED STATE AGENCY.—Each 

9 designated State agency that provides grants to eligible 

10 prekindergarten program providers under this subtitle 

11 shall submit to the Secretary an annual report on the im12 plementation and effectiveness of the programs in the 

13 State supported under this subtitle. Such report shall con14 tain such additional information as the Secretary may rea15 sonably require. 

16 (c) REPORT BY GRANT RECIPIENT.—Each eligible 

17 prekindergarten program provider that receives a grant 

18 under this subtitle shall submit to the designated State 

19 agency an annual report that includes, with respect to the 

20 program supported by such grant, the following: 

21 (1) A description of the type of program and a 

22 statement of the number and ages of children served 

23 by the program, as well as the number and ages of 

24 children with a disability or a native language other 

25 than English. 
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1 (2) A description of the qualifications of the 

2 program staff and the type of ongoing professional 

3 development provided to such staff. 

4 (3) A statement of all sources of Federal, State, 

5 local, and private funds received by the program. 

6 (4) A description of the curricula, materials, 

7 and activities used by the program to support early 

8 childhood development and learning. 

9 (5) Such other information as the designated 

10 State agency may reasonably require. 

11 SEC. 308. FEDERAL FUNDS SUPPLEMENTARY. 

12 Funds made available under this subtitle may not be 

13 used to supplant other Federal, State, local, or private 

14 funds that would, in the absence of such Federal funds, 

15 be made available for the program assisted under this sub16 title. 

17 SEC. 309. DEFINITIONS. 

18 In this subtitle: 

19 (1) The term ‘‘eligible prekindergarten program 

20 provider’’ means a prekindergarten program pro21 vider that is—

22 (A) a school; 

23 (B) supported, sponsored, supervised, or 

24 carried out by a local educational agency; 

25 (C) a Head Start program; or
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1 (D) a child care provider. 

2 (2) The term ‘‘prekindergarten program’’ 

3 means a program serving children 3, 4, and 5 years 

4 old that supports children’s cognitive, social, emo5 tional, and physical development and helps prepare 

6 those children for the transition to kindergarten. 

7 (3) The term ‘‘local educational agency’’ has 

8 the meaning given that term in the Elementary and 

9 Secondary Education Act of 1965 (20 U.S.C. 6301 

10 et seq.). 

11 (4) The term ‘‘prekindergarten teacher’’ means 

12 an individual who has received, or is working to13 ward, a bachelor of arts degree in early childhood 

14 education. 

15 SEC. 310. AUTHORIZATION OF APPROPRIATIONS. 

16 There are authorized to be appropriated to carry out 

17 this subtitle—

18 (1) $10,000,000,000 for fiscal year 2003; 

19 (2) $20,000,000,000 for fiscal year 2004; 

20 (3) $30,000,000,000 for fiscal year 2005; 

21 (4) $40,000,000,000 for fiscal year 2006; and 

22 (5) $50,000,000,000 for fiscal year 2007. 
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1 Subtitle B—Universal Free School 

2 Breakfast Program 

3 SEC. 311. UNIVERSAL FREE SCHOOL BREAKFAST PRO4 GRAM. 

5 (a) FREE BREAKFAST AND UNIVERSAL ELIGI6 BILITY.—Section 4 of the Child Nutrition Act of 1966 (42 

7 U.S.C. 1773) is amended to read as follows: 

8 ‘‘SEC. 4. SCHOOL BREAKFAST PROGRAM AUTHORIZATION. 

9 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated such sums as are nec11 essary to enable the Secretary to carry out a program to 

12 assist States and the Department of Defense to initiate, 

13 maintain, or expand nonprofit breakfast programs to pro14 vide free breakfasts to school children without regard to 

15 family income in all schools which make application for 

16 participation and agree to carry out a nonprofit free 

17 breakfast program in accordance with this Act. Appropria18 tions and expenditures for this Act shall be considered 

19 Health and Human Services functions for budget purposes 

20 rather than functions of Agriculture. 

21 ‘‘(b) APPORTIONMENT TO STATES.—

22 ‘‘(1)(A) IN GENERAL.—The Secretary shall 

23 make breakfast payments to each State educational 

24 agency each fiscal year, at such times as the Sec25 retary may determine, from the sums appropriated 
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1 for such purpose, in an amount equal to the product 

2 obtained by multiplying—

3 ‘‘(i) the number of breakfasts served free 

4 during such fiscal year to children in schools in 

5 such States which participate in the school 

6 breakfast program under agreements with such 

7 State educational agency; by 

8 ‘‘(ii) the national breakfast payment as 

9 prescribed in paragraph (2) of this subsection. 

10 ‘‘(B) AGREEMENTS.—The agreements described 

11 in subparagraph (A)(i) shall be permanent agree12 ments that may be amended as necessary. Nothing 

13 in the preceding sentence shall be construed to limit 

14 the ability of the State educational agency to sus15 pend or terminate any such agreement in accordance 

16 with regulations prescribed by the Secretary. 

17 ‘‘(2) NATIONAL BREAKFAST PAYMENT.—The 

18 national payment for each breakfast shall be $1.40 

19 (as adjusted each July 1 pursuant to section 

20 11(a)(3)(B) of the Richard B. Russell National 

21 School Lunch Act (42 U.S.C. 1759a(a)(3)(B)). 

22 ‘‘(3) LIMITATION.—No breakfast payment may 

23 be made under this subsection for any breakfast 

24 served by a school unless such breakfast consists of 

25 a combination of foods which meet the minimum nu-
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1 tritional requirements prescribed by the Secretary 

2 under subsection (e) of this section. 

3 ‘‘(4) NUTRITION QUALITY ADJUSTMENT.—The 

4 Secretary shall increase by 6 cents the annually ad5 justed payment for each breakfast served under this 

6 Act and section 17 of the Richard B. Russell Na7 tional School Lunch Act. These funds shall be used 

8 to assist States, to the extent feasible, in improving 

9 the nutritional quality of the breakfasts. 

10 ‘‘(5) AGRICULTURAL COMMODITIES.—Notwith11 standing any other provision of law, whenever stocks 

12 of agricultural commodities are acquired by the Sec13 retary or the Commodity Credit Corporation and are 

14 not likely to be sold by the Secretary or the Com15 modity Credit Corporation or otherwise used in pro16 grams of commodity sale or distribution, the Sec17 retary shall make such commodities available to 

18 school food authorities and eligible institutions serv19 ing breakfasts under this Act in a quantity equal in 

20 value to not less than 3 cents for each breakfast 

21 served under this Act. 

22 ‘‘(6) EFFECT ON EXPENDITURES.—Expendi23 tures of funds from State and local sources for the 

24 maintenance of the breakfast program shall not be 
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1 diminished as a result of funds or commodities re2 ceived under paragraph (4) or (5). 

3 ‘‘(c) STATE DISBURSEMENT TO SCHOOLS.—Funds 

4 paid to any State during any fiscal year for the purpose 

5 of this section shall be disbursed by the State educational 

6 agency, in accordance with such agreements approved by 

7 the Secretary as may be entered into by such State agency 

8 and the schools in the State, to those schools in the State 

9 which the State educational agency, determines are eligi10 ble to participate in the school breakfast program. 

11 ‘‘(d) PARTICIPATION BY SCHOOLS.—

12 ‘‘(1) REQUIREMENTS FOR PARTICIPATION.—To 

13 be eligible to participate in the school breakfast pro14 gram under this section, a school food authority 

15 shall—

16 ‘‘(A) agree to serve all breakfasts at no 

17 charge to all students who wish to participate 

18 without regard to family income in all partici19 pating schools; and 

20 ‘‘(B) meet all other requirements that the 

21 Secretary may reasonably establish. 

22 ‘‘(2) START-UP ASSISTANCE.—The Secretary is 

23 authorized to provide additional assistance to schools 

24 not participating in the school breakfast program 

25 prior to the enactment of the Family and Workplace
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1 Balancing Act of 2004 in order to assist such 

2 schools to begin participation in the school breakfast 

3 program under this section. 

4 ‘‘(3) STATE EDUCATIONAL AGENCY ASSIST5 ANCE.—Each State educational agency shall assist 

6 schools not participating in the school breakfast pro7 gram prior to the enactment of the Family and 

8 Workplace Balancing Act of 2004 to enter into 

9 agreements with such agencies in order to partici10 pate in the school breakfast program under this sec11 tion. 

12 ‘‘(e) NUTRITIONAL AND OTHER PROGRAM REQUIRE13 MENTS.—

14 ‘‘(1) MINIMUM NUTRITIONAL REQUIRE15 MENTS.—Breakfasts served by schools participating 

16 in the school breakfast program under this section 

17 shall consist of a combination of foods and shall 

18 meet minimum nutritional requirements prescribed 

19 by the Secretary on the basis of tested nutritional 

20 research, except that the minimum nutritional re21 quirements shall be measured by not less than the 

22 weekly average of the nutrient content of school 

23 breakfasts. 

24 ‘‘(2) TECHNICAL ASSISTANCE AND TRAINING.—

25 The Secretary shall provide through State edu-
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1 cational agencies technical assistance and training, 

2 including technical assistance and training in the 

3 preparation of foods high in complex carbohydrates 

4 and lower-fat versions of foods commonly used in the 

5 school breakfast program established under this sec6 tion, to schools participating in the school breakfast 

7 program to assist the schools in complying with the 

8 nutritional requirements prescribed by the Secretary 

9 pursuant to paragraph (1) and in providing appro10 priate meals to children with medically certified spe11 cial dietary needs. 

12 ‘‘(3) OPTION VERSUS SERVE.—At the option of 

13 a local school food authority, a student in a school 

14 under the authority that participates in the school 

15 breakfast program under this Act may be allowed to 

16 refuse not more than one item of a breakfast that 

17 the student does not intend to consume. A refusal of 

18 an offered food item shall not affect the amount of 

19 payments made under this Act to a school for the 

20 breakfast.’’. 

21 (b) TECHNICAL AMENDMENTS.—

22 (1) CHILD NUTRITION ACT OF 1966.—Section 

23 20 of the Child Nutrition Act of 1966 (42 U.S.C. 

24 1789) is amended by striking subsection (b) and re-
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1 designating subsections (c) through (e) as sub2 sections (b) through (d), respectively. 

3 (2) RICHARD B. RUSSELL NATIONAL SCHOOL

4 LUNCH ACT.—The Richard B. Russell National 

5 School Lunch Act is amended—

6 (A) in section 9(b)—

7 (i) in paragraph (2)(C)(ii), by striking 

8 ‘‘or breakfasts’’; and 

9 (ii) in paragraph (6)(A), by striking 

10 ‘‘and breakfast’’; 

11 (B) in section 11(a)(1)—

12 (i) in subparagraph (C), by striking 

13 ‘‘or breakfasts’’ each place it appears; 

14 (ii) in subparagraph (C)(i)(I), by 

15 striking ‘‘or in the case of a school’’ and 

16 all that follows through ‘‘4 successive 

17 school years’’; 

18 (iii) in subparagraph (D)(iii), by strik19 ing ‘‘or for free and reduced price lunches 

20 and breakfasts’’; 

21 (iv) in subparagraph (D)(iv), by strik22 ing ‘‘or school breakfast’’; 

23 (v) in subparagraph (E)(i)(I) by strik24 ing ‘‘or in the case of a school’’ and all 
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1 that follows through ‘‘4 successive school 

2 years’’; and 

3 (vi) in subparagraph (E)(i)(II)—

4 (I) by striking ‘‘or breakfasts’’ 

5 both places it appears; and 

6 (II) by striking ‘‘or school break7 fast’’; 

8 (C) in section 11(a)(3)(A), by striking 

9 clause (iii); 

10 (D) in section 13(a)(1)(C), by striking ‘‘or 

11 breakfasts’’; 

12 (E) in section 17—

13 (i) in subsection (c), by striking para14 graph (2), and redesignating paragraphs 

15 (3) through (6) as paragraphs (2) through 

16 (5), respectively; and 

17 (ii) in subsection (f)(3)(E)(ii(I), by 

18 striking ‘‘meals’’ and inserting ‘‘lunches’’; 

19 and 

20 (F) in section 18, by striking subsection 

21 (e) and redesignating subsections (f) and (g) as 

22 subsections (e) and (f), respectively.
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1 Subtitle C—Nutritional Improve2 ment for Children Served Under 

3 Child Nutrition Programs 

4 SEC. 321. NUTRITIONAL IMPROVEMENT FOR CHILDREN 

5 SERVED UNDER CHILD NUTRITION PRO6 GRAMS 

7 (a) IN GENERAL.—Section 18 of the Richard B. Rus8 sell National School Lunch Act (42 U.S.C. 1769) is 

9 amended by adding at the end the following: 

10 ‘‘(h) HEALTHY SCHOOL NUTRITION ENVIRONMENT

11 INCENTIVE GRANTS.—

12 ‘‘(1) IN GENERAL.—The Secretary shall estab13 lish a program under which the Secretary shall make 

14 competitive grants to selected local educational agen15 cies—

16 ‘‘(A) to create healthy school nutrition en17 vironments; and 

18 ‘‘(B) to assess the impact of the environ19 ments on the health and well-being of children 

20 enrolled in the schools. 

21 ‘‘(2) SELECTION OF SCHOOLS.—In selecting 

22 local educational agencies to receive incentive grants 

23 under this subsection, the Secretary shall—

24 ‘‘(A) ensure that not less than 75 percent 

25 of the schools under the jurisdiction of the 
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1 agencies selected to participate in the program 

2 established under this subsection are schools in 

3 which not less than 50 percent of the students 

4 enrolled in each school are eligible for free or 

5 reduced price meals under this Act; 

6 ‘‘(B) ensure that, of the agencies selected 

7 to participate in the program, there is appro8 priate representation of rural, urban, and sub9 urban schools, as determined by the Secretary; 

10 ‘‘(C) ensure that, of the agencies selected 

11 to participate in the program, there is appro12 priate representation of elementary, middle, and 

13 secondary schools, as determined by the Sec14 retary; 

15 ‘‘(D) ensure that agencies selected to re16 ceive a grant under this subsection meet the re17 quirements of paragraph (3); 

18 ‘‘(E) give priority to agencies that develop 

19 comprehensive plans that include the involve20 ment of a broad range of community stake21 holders in achieving healthy school nutrition en22 vironments; 

23 ‘‘(F) give priority to agencies that develop 

24 comprehensive plans that include a strategy for 

25 maintaining healthy school nutrition environ-
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1 ments in the years following the fiscal years for 

2 which the agencies receive grants under this 

3 subsection; 

4 ‘‘(G) select only agencies that submit grant 

5 applications by May 1, 2004; and 

6 ‘‘(H) make grant awards effective not later 

7 than July 15, 2004. 

8 ‘‘(3) REQUIREMENTS.—

9 ‘‘(A) INPUT.—Prior to the solicitation of 

10 proposals for grants under this subsection, the 

11 Secretary shall solicit input from appropriate 

12 nutrition, health, and education organizations 

13 (such as the American School Food Service As14 sociation, the American Dietetic Association, 

15 and the National School Boards Association) 

16 regarding the appropriate criteria for a healthy 

17 school environment. 

18 ‘‘(B) CRITERIA FOR HEALTHY SCHOOL EN19 VIRONMENTS.—The Secretary shall, taking into 

20 account input received under subparagraph (A), 

21 establish criteria for defining a healthy school 

22 environment, including criteria that—

23 ‘‘(i) provide program meals that meet 

24 nutritional standards for breakfasts and 

25 lunches established by the Secretary; 
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1 ‘‘(ii) ensure that all food served (in2 cluding food served in participating schools 

3 and service institutions in competition with 

4 the programs authorized under this Act 

5 and the Child Nutrition Act of 1966 (42 

6 U.S.C. 1771 et seq.)) on school grounds 

7 during regular school hours is consistent 

8 with the nutritional standards for break9 fasts and lunches established by the Sec10 retary; 

11 ‘‘(iii) promote the consumption of 

12 fruits and vegetables; 

13 ‘‘(iv) provide nutrition education to 

14 students and staff; and 

15 ‘‘(v) meet other criteria established by 

16 the Secretary. 

17 ‘‘(C) PLANS.—To be eligible to receive a 

18 grant under this subsection, a local educational 

19 agency shall submit to the Secretary a healthy 

20 school nutrition environment plan that describes 

21 the actions the schools under the jurisdiction of 

22 such agency will take to meet the criteria estab23 lished under subparagraph (B). 
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1 ‘‘(4) GRANTS.—For each of fiscal years 2005 

2 through 2008, the Secretary shall make a grant to 

3 each agency selected under paragraph (2). 

4 ‘‘(5) EVALUATIONS.—

5 ‘‘(A) IN GENERAL.—The Secretary, acting 

6 through the Administrator of the Food and Nu7 trition Service, shall conduct an evaluation of a 

8 representative sample of schools that receive 

9 grants under this subsection. 

10 ‘‘(B) CONTENT.—The evaluation shall 

11 measure, at a minimum, the effects of a healthy 

12 school nutrition environment on—

13 ‘‘(i) overweight children and obesity; 

14 ‘‘(ii) dietary intake; 

15 ‘‘(iii) nutrition education and behav16 ior; 

17 ‘‘(iv) the adequacy of time to eat; 

18 ‘‘(v) physical activities; 

19 ‘‘(vi) parental and student attitudes 

20 and participation; and 

21 ‘‘(vii) related funding issues, including 

22 the cost of maintaining a healthy school 

23 nutrition environment. 

24 ‘‘(C) REPORTS.—The Secretary shall sub25 mit to the Committee on Education and the
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1 Workforce of the House of Representatives and 

2 the Committee on Agriculture, Nutrition, and 

3 Forestry of the Senate—

4 ‘‘(i) not later than December 31, 

5 2005, an interim report on the activities of 

6 schools evaluated under this subsection; 

7 and 

8 ‘‘(ii) not later than December 31, 

9 2007, a final report on the activities of 

10 schools evaluated under this subsection. 

11 ‘‘(6) FUNDING.—

12 ‘‘(A) IN GENERAL.—Out of any funds in 

13 the Treasury not otherwise appropriated, the 

14 Secretary of the Treasury shall transfer to the 

15 Secretary of Agriculture to carry out this sub16 section—

17 ‘‘(i) on October 1, 2003, $10,000,000; 

18 and 

19 ‘‘(ii) on October 1, 2004, and each 

20 October 1 thereafter through October 1, 

21 2006, $35,000,000. 

22 ‘‘(B) RECEIPT AND ACCEPTANCE.—The 

23 Secretary shall be entitled to receive, shall ac24 cept, and shall use to carry out this section the 
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1 funds transferred under subparagraph (A), 

2 without further appropriation. 

3 ‘‘(C) AVAILABILITY OF FUNDS.—Funds 

4 transferred under subparagraph (A) shall re5 main available until expended. 

6 ‘‘(D) EVALUATIONS.—Of the funds made 

7 available under this paragraph, the Secretary 

8 shall use not more than $5,000,000 to conduct 

9 evaluations under paragraph (5).’’. 

10 (b) COMPETITIVE FOODS IN SCHOOLS.—

11 (1) IN GENERAL.—Section 10 of the Child Nu12 trition Act of 1966 (42 U.S.C. 1779) is amended—

13 (A) in subsection (a), by striking ‘‘, includ14 ing’’ and all that follows through ‘‘Lunch Act’’; 

15 and 

16 (B) by striking subsection (b) and insert17 ing the following: 

18 ‘‘(b) COMPETITIVE FOODS IN SCHOOLS.—

19 ‘‘(1) IN GENERAL.—The regulations under sub20 section (a) may include provisions that regulate the 

21 service of food in participating schools and service 

22 institutions in competition with the programs au23 thorized under this Act and the Richard B. Russell 

24 National School Lunch Act (42 U.S.C. 1751 et seq.) 
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1 (referred to in this subsection as ‘competitive 

2 foods’). 

3 ‘‘(2) REGULATIONS.—The regulations promul4 gated under paragraph (1)—

5 ‘‘(A) shall apply to all school grounds dur6 ing the duration of the school day; 

7 ‘‘(B) shall not supersede or otherwise af8 fect State and local regulations on competitive 

9 foods that, as determined by the Secretary, con10 form to the nutritional goals of the regulations 

11 promulgated by the Secretary; 

12 ‘‘(C) shall require that the proceeds from 

13 the sale of competitive foods in schools be used 

14 for the benefit of the schools or of organizations 

15 of students approved by the schools, if those 

16 sales are allowed by the regulations; 

17 ‘‘(D) shall take into account the differing 

18 needs of—

19 ‘‘(i) elementary schools; 

20 ‘‘(ii) middle schools and junior high 

21 schools; and 

22 ‘‘(iii) high schools; and 

23 ‘‘(E) shall implement the recommendations 

24 of the Institute of Medicine made under para25 graph (3). 
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1 ‘‘(3) INSTITUTE OF MEDICINE RECOMMENDA2 TIONS.—

3 ‘‘(A) IN GENERAL.—The Secretary of Ag4 riculture shall offer to enter into an agreement 

5 with the Institute of Medicine of the National 

6 Academy of Sciences under which the Institute 

7 of Medicine, based on sound nutritional science, 

8 shall make recommendations to the Secretary 

9 regarding the regulation of competitive foods 

10 (as defined in section 10(b)(1) of the Child Nu11 trition Act of 1966 (as amended by paragraph 

12 (1)(B))). 

13 ‘‘(B) REGULATIONS.—Not later than 1 

14 year after the date of receipt of final rec15 ommendations from the Institute of Medicine, 

16 the Secretary shall promulgate regulations to 

17 carry out section 10(b) of the Child Nutrition 

18 Act of 1966 (as amended by paragraph (1)(B)) 

19 in accordance with the recommendations of the 

20 Institute of Medicine. 

21 ‘‘(C) REPORT.—Not later than 1 year 

22 after the date of receipt of final recommenda23 tions from the Institute of Medicine, the Sec24 retary shall submit to the Committee on Edu25 cation and the Workforce of the House of Rep-
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1 resentatives and the Committee on Agriculture, 

2 Nutrition, and Forestry of the Senate a report 

3 that describes the actions of the Secretary 

4 under subparagraph (B).’’. 

5 Subtitle D—Child and Adult Care 

6 Food Program 

7 SEC. 331. REIMBURSEMENTS FOR AFTERSCHOOL DINNERS. 

8 Section 17(r) of the Richard B. Russell National 

9 School Lunch Act (42 U.S.C. 1766(r)) is amended by 

10 striking paragraph (5). 

11 SEC. 332. ELIGIBILITY OF PRIVATE CHILD CARE CENTERS. 

12 Section 17(a)(2)(B)(i) is amended by striking ‘‘dur13 ing the period’’ and all that follows through ‘‘September 

14 30, 2002’’. 

15 Subtitle E—Afterschool Education 

16 Enhancement Act 

17 SEC. 341. SHORT TITLE. 

18 This subtitle may be cited as the ‘‘Afterschool Edu19 cation Enhancement Act’’. 

20 SEC. 342. AMENDMENTS REGARDING 21ST CENTURY COM21 MUNITY LEARNING CENTERS. 

22 Part B of title IV of the Elementary and Secondary 

23 Education Act of 1965 (20 U.S.C. 7171 et seq.) is amend24 ed—

25 (1) in subsection (a) of section 4203—
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1 (A) by striking paragraph (3); and 

2 (B) by redesignating paragraphs (4) 

3 through (14) as paragraphs (3) through (13), 

4 respectively; and 

5 (2) in section 4204—

6 (A) in paragraph (2) of subsection (b)—

7 (i) by striking subparagraph (F); and 

8 (ii) by redesignating subparagraphs 

9 (G) through (N) as subparagraphs (F) 

10 through (M), respectively; and 

11 (B) by amending paragraph (1) of sub12 section (i) to read as follows: 

13 ‘‘(1) IN GENERAL.—In awarding grants under 

14 this part, a State educational agency shall give pri15 ority to applications submitted jointly by eligible en16 tities consisting of not less than—

17 ‘‘(A) 1 local educational agency receiving 

18 funds under part A of title I; and 

19 ‘‘(B) 1 community-based organization or 

20 other public or private entity.’’.
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1 TITLE IV—IMPROVING THE 

2 WORKPLACE FOR FAMILIES 

3 Subtitle A—Part-Time and 

4 Temporary Workers Benefits 

5 SEC. 401. TREATMENT OF EMPLOYEES WORKING AT LESS 

6 THAN FULL-TIME UNDER PARTICIPATION, 

7 VESTING, AND ACCRUAL RULES GOVERNING 

8 PENSION PLANS. 

9 (a) PARTICIPATION RULES.—

10 (1) IN GENERAL.—Section 202(a)(3) of the 

11 Employee Retirement Income Security Act of 1974 

12 (29 U.S.C. 1052(a)(3)) is amended by adding at the 

13 end the following new subparagraph: 

14 ‘‘(E)(i) For purposes of this paragraph, in the case 

15 of any employee who, as of the beginning of the 12-month 

16 period referred to in subparagraph (A)—

17 ‘‘(I) has customarily completed 500 or 

18 more hours of service per year but less than 

19 1,000 hours of service per year, or 

20 ‘‘(II) is employed in a type of position in 

21 which employment customarily constitutes 500 

22 or more hours of service per year but less than 

23 1,000 hours of service per year, 
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1 completion of 500 hours of service within such 12-

2 month period shall be treated as completion of 1,000 

3 hours of service. 

4 ‘‘(ii) For purposes of this subparagraph, the extent 

5 to which employment in any type of position customarily 

6 constitutes less than 1,000 hours of service per year shall 

7 be determined with respect to each pension plan in accord8 ance with such regulations as the Secretary may prescribe 

9 providing for consideration of facts and circumstances pe10 culiar to the work-force constituting the participants in 

11 such plan.’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 204(b)(1)(E) of such Act (29 U.S.C. 1054(b)(1)(E)) 

14 is amended by striking ‘‘section 202(a)(3)(A)’’ and 

15 inserting ‘‘subparagraphs (A) and (E) of section 

16 202(a)(3)’’. 

17 (b) VESTING RULES.—

18 (1) IN GENERAL.—Section 203(b)(2) of such 

19 Act (29 U.S.C. 1053(b)(2)) is amended by adding at 

20 the end the following new subparagraph: 

21 ‘‘(E)(i) For purposes of this paragraph, in the case 

22 of any employee who, as of the beginning of the period 

23 designated by the plan pursuant to subparagraph (A)—
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1 ‘‘(I) has customarily completed 500 or 

2 more hours of service per year but less than 

3 1,000 hours of service per year, or 

4 ‘‘(II) is employed in a type of position in 

5 which employment customarily constitutes 500 

6 or more hours of service per year but less than 

7 1,000 hours of service per year, 

8 completion of 500 hours of service within such pe9 riod shall be treated as completion of 1,000 hours of 

10 service. 

11 ‘‘(ii) For purposes of this subparagraph, the extent 

12 to which employment in any type of position customarily 

13 constitutes less than 1,000 hours of service per year shall 

14 be determined with respect to each pension plan in accord15 ance with such regulations as the Secretary may prescribe 

16 providing for consideration of facts and circumstances pe17 culiar to the work-force constituting the participants in 

18 such plan.’’. 

19 (2) 1-YEAR BREAKS IN SERVICE.—Section 

20 203(b)(3) of such Act (29 U.S.C. 1053(b)(3)) is 

21 amended by adding at the end the following new 

22 subparagraph: 

23 ‘‘(F)(i) For purposes of this paragraph, in the case 

24 of any employee who, as of the beginning of the period 

25 designated by the plan pursuant to subparagraph (A)—
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1 ‘‘(I) has customarily completed 500 or more 

2 hours of service per year but less than 1,000 hours 

3 of service per year, or 

4 ‘‘(II) is employed in a type of position in which 

5 employment customarily constitutes 500 or more 

6 hours of service per year but less than 1,000 hours 

7 of service per year, 

8 completion of 250 hours of service within such period shall 

9 be treated as completion of 500 hours of service. 

10 ‘‘(ii) For purposes of this subparagraph, the extent 

11 to which employment in any type of position customarily 

12 constitutes less than 1,000 hours of service per year shall 

13 be determined with respect to each pension plan in accord14 ance with such regulations as the Secretary may prescribe 

15 providing for consideration of facts and circumstances pe16 culiar to the work-force constituting the participants in 

17 such plan.’’. 

18 (c) ACCRUAL RULES.—Section 204(b)(4)(C) of such 

19 Act (29 U.S.C. 1054(b)(4)(C)) is amended—

20 (1) by inserting ‘‘(i)’’ after ‘‘(C)’’; and 

21 (2) by adding at the end the following new 

22 clauses: 

23 ‘‘(ii) For purposes of this subparagraph, in the case 

24 of any employee who, as of the beginning of the period 

25 designated by the plan pursuant to clause (i)—
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1 ‘‘(I) has customarily completed 500 or more 

2 hours of service per year but less than 1,000 hours 

3 of service per year, or 

4 ‘‘(II) is employed in a type of position in which 

5 employment customarily constitutes 500 or more 

6 hours of service per year but less than 1,000 hours 

7 of service per year, 

8 completion of 500 hours of service within such period shall 

9 be treated as completion of 1,000 hours of service. 

10 ‘‘(iii) For purposes of clause (ii), the extent to which 

11 employment in any type of position customarily constitutes 

12 less than 1,000 hours of service per year shall be deter13 mined with respect to each pension plan in accordance 

14 with such regulations as the Secretary may prescribe pro15 viding for consideration of facts and circumstances pecu16 liar to the work-force constituting the participants in such 

17 plan.’’. 

18 SEC. 402. TREATMENT OF EMPLOYEES WORKING AT LESS 

19 THAN FULL-TIME UNDER GROUP HEALTH 

20 PLANS. 

21 (a) IN GENERAL.—Part 2 of subtitle B of title I of 

22 the Employee Retirement Income Security Act of 1974 is 

23 amended—

24 (1) by redesignating section 211 (29 U.S.C. 

25 1061) as section 212; and 
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1 (2) by inserting after section 210 (29 U.S.C. 

2 1060) the following new section: 

3 ‘‘SEC. 211. TREATMENT OF PART-TIME WORKERS UNDER 

4 GROUP HEALTH PLANS. 

5 ‘‘(a) IN GENERAL.—A reduction in the employer-pro6 vided premium under a group health plan with respect to 

7 any employee for any period of coverage solely because the 

8 employee’s customary employment is less than full-time 

9 may be provided under such plan only if the employee is 

10 described in subsection (b) and only to the extent per11 mitted under subsection (c). 

12 ‘‘(b) REDUCTIONS APPLICABLE TO EMPLOYEES

13 WORKING LESS THAN FULL-TIME.—

14 ‘‘(1) IN GENERAL.—An employee is described in 

15 this subsection if such employee, as of the beginning 

16 of the period of coverage referred to in subsection 

17 (a)—

18 ‘‘(A) has customarily completed less than 

19 30 hours of service per week, or 

20 ‘‘(B) is employed in a type of position in 

21 which employment customarily constitutes less 

22 than 30 hours of service per week. 

23 ‘‘(2) REGULATIONS.—For purposes of para24 graph (1), whether employment in any type of posi25 tion customarily constitutes less than 30 hours of 
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1 service per week shall be determined with respect to 

2 each group health plan in accordance with such reg3 ulations as the Secretary may prescribe providing 

4 for consideration of facts and circumstances peculiar 

5 to the work-force constituting the participants in 

6 such plan. 

7 ‘‘(c) AMOUNT OF PERMISSIBLE REDUCTION.—The 

8 employer-provided premium under a group health plan 

9 with respect to any employee for any period of coverage, 

10 after the reduction permitted under subsection (a), shall 

11 not be less than a ratable portion of the employer-provided 

12 premium which would be provided under such plan for 

13 such period of coverage with respect to an employee who 

14 completes 30 hours of service per week. 

15 ‘‘(d) DEFINITIONS.—For purposes of this section—

16 ‘‘(1) GROUP HEALTH PLAN.—The term ‘group 

17 health plan’ has the meaning provided such term in 

18 section 607(1). 

19 ‘‘(2) EMPLOYER-PROVIDED PREMIUM.—

20 ‘‘(A) IN GENERAL.—The term ‘employer21 provided premium’ under a plan for any period 

22 of coverage means the portion of the applicable 

23 premium under the plan for such period of cov24 erage which is attributable under the plan to 

25 employer contributions. 
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1 ‘‘(B) APPLICABLE PREMIUM.—For pur2 poses of subparagraph (A), in determining the 

3 applicable premium of a group health plan, 

4 principles similar to the principles applicable 

5 under section 604 shall apply.’’. 

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 201(1) of such Act (29 U.S.C. 

8 1051(1)) is amended by inserting ‘‘, except with re9 spect to section 211’’ before the semicolon. 

10 (2) The table of contents in section 1 of such 

11 Act is amended by striking the item relating to sec12 tion 211 and inserting the following new items:

‘‘211. Treatment of part-time workers under group health plans. 

‘‘212. Effective date.’’.

13 SEC. 403. EXPANSION OF DEFINITION OF EMPLOYEE TO IN14 CLUDE CERTAIN INDIVIDUALS WHOSE SERV15 ICES ARE LEASED OR CONTRACTED FOR. 

16 Paragraph (6) of section 3 of the Employee Retire17 ment Income Security Act of 1974 (29 U.S.C. 1002(6)) 

18 is amended—

19 (1) by inserting ‘‘(A)’’ after ‘‘(6)’’; and 

20 (2) by adding at the end the following new sub21 paragraph: 

22 ‘‘(B) Such term includes, with respect to any em23 ployer, any person who is not an employee (within the
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1 meaning of subparagraph (A)) of such employer and who 

2 provides services to such employer, if—

3 ‘‘(i) such person has (pursuant to an agreement 

4 with such employer or any other person) performed 

5 such services for such employer (or for such em6 ployer and related persons (within the meaning of 

7 section 144(a)(3) of the Internal Revenue Code of 

8 1986)) for a period of at least 1 year (6 months in 

9 the case of core health benefits) at the rate of at 

10 least 500 hours of service per year, and 

11 ‘‘(ii) such services are of a type historically per12 formed, in the business field of the employer, by em13 ployees (within the meaning of subparagraph (A)).’’. 

14 SEC. 404. EFFECTIVE DATES. 

15 (a) IN GENERAL.—Except as provided in subsection 

16 (b), the amendments made by this subtitle shall apply with 

17 respect to plan years beginning on or after January 1, 

18 2004. 

19 (b) SPECIAL RULE FOR COLLECTIVELY BARGAINED

20 PLANS.—In the case of a plan maintained pursuant to 1 

21 or more collective bargaining agreements between em22 ployee representatives and 1 or more employers ratified 

23 on or before the date of the enactment of this Act, sub24 section (a) shall be applied to benefits pursuant to, and 

25 individuals covered by, any such agreement by substituting 
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1 for ‘‘January 1, 2004’’ the date of the commencement of 

2 the first plan year beginning on or after the earlier of—

3 (1) the later of—

4 (A) January 1, 2004, or 

5 (B) the date on which the last of such col6 lective bargaining agreements terminates (de7 termined without regard to any extension there8 of after the date of the enactment of this Act), 

9 or 

10 (2) January 1, 2006. 

11 (c) PLAN AMENDMENTS.—If any amendment made 

12 by this subtitle requires an amendment to any plan, such 

13 plan amendment shall not be required to be made before 

14 the first plan year beginning on or after January 1, 2005, 

15 if—

16 (1) during the period after such amendment 

17 made by this Act takes effect and before such first 

18 plan year, the plan is operated in accordance with 

19 the requirements of such amendment made by this 

20 subtitle, and 

21 (2) such plan amendment applies retroactively 

22 to the period after such amendment made by this 

23 subtitle takes effect and such first plan year. 

24 A plan shall not be treated as failing to provide definitely 

25 determinable benefits or contributions, or to be operated 
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1 in accordance with the provisions of the plan, merely be2 cause it operates in accordance with this subsection. 

3 Subtitle B—United States Business 

4 Telework Act 

5 SEC. 411. SHORT TITLE. 

6 This subtitle may be cited as the ‘‘United States 

7 Business Telework Act’’. 

8 SEC. 412. TELEWORK PILOT PROGRAM. 

9 (a) PROGRAM.—In accordance with this subtitle, the 

10 Secretary of Labor shall conduct, in not more than 5 

11 States, a pilot program to raise awareness about telework 

12 among employers and to encourage such employers to 

13 offer telework options to employees. 

14 (b) PERMISSIBLE ACTIVITIES.—In carrying out the 

15 pilot program, the Secretary is encouraged to—

16 (1) produce educational materials and conduct 

17 presentations designed to raise awareness of the 

18 benefits and the ease of telework; 

19 (2) conduct outreach to businesses that are con20 sidering offering telework options; 

21 (3) acquire telework technologies and equip22 ment to be used for demonstration purposes; and 

23 (4) ensure that expectant and new mothers who 

24 are employed by businesses that participate in the 
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1 pilot program are given the option to telework dur2 ing the 1-year period after the date of birth. 

3 SEC. 413. REPORT TO CONGRESS. 

4 Not later than 2 years after the first date on which 

5 funds are appropriated to carry out this subtitle, the Sec6 retary shall transmit to the Congress a report containing 

7 the results of an evaluation of the pilot program and any 

8 recommendations as to whether the pilot program, with 

9 or without modification, should be expanded. 

10 SEC. 414. DEFINITION. 

11 In this subtitle, the term ‘‘telework’’ means the per12 formance of any portion of work functions by an employee 

13 outside the normal place of business under circumstances 

14 which reduce or eliminate the need to commute. 

15 SEC. 415. TERMINATION. 

16 The pilot program shall terminate 2 years after the 

17 first date on which funds are appropriated to carry out 

18 this subtitle. 

19 SEC. 416. AUTHORIZATION OF APPROPRIATIONS. 

20 There is authorized to be appropriated $5,000,000 to 

21 carry out this subtitle.

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