I

106TH CONGRESS

1ST SESSION H. R. 1112

To amend the National Housing Act to authorize the Secretary of Housing

and Urban Development to insure mortgages for the acquisition, construction, or substantial rehabilitation of child care and development

facilities and to establish the Children’s Development Commission to

certify such facilities for such insurance, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 16, 1999

Mrs. MALONEY of New York (for herself, Mr. BAKER, Mr. KANJORSKI, Mr.

GILMAN, Mr. FROST, Mrs. KELLY, Mr. GUTIERREZ, Mr. JACKSON of Illinois, Mr. COOK, Ms. LOFGREN, Ms. LEE, Ms. SANCHEZ, Mr. BARRETT

of Wisconsin, Mr. MARTINEZ, Mr. FATTAH, Mrs. MEEK of Florida, Mr.

ALLEN, Mr. ENGEL, Mr. SAWYER, Mr. EDWARDS, Ms. BROWN of Florida, Mr. BISHOP, Mrs. CAPPS, Mr. SHOWS, Mrs. CHRISTENSEN, Mrs.

CLAYTON, Mr. HINCHEY, Mr. CROWLEY, Ms. SCHAKOWSKY, Mr. PAYNE,

Mr. FORD, Mr. BROWN of California, Mrs. MINK of Hawaii, Mr.

SANDLIN, Mr. HILL of Indiana, and Mr. UNDERWOOD) introduced the

following bill; which was referred to the Committee on Banking and Financial Services

A BILL

To amend the National Housing Act to authorize the Secretary of Housing and Urban Development to insure

mortgages for the acquisition, construction, or substantial rehabilitation of child care and development facilities

and to establish the Children’s Development Commission

to certify such facilities for such insurance, and for other

purposes.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Children’s Develop5 ment Commission Act (Kiddie Mac)’’.

6 SEC. 2. CONGRESSIONAL FINDINGS.

7 The Congress finds the following:

8 (1) The need for quality nursery schools, both

9 full-time and part-time child care centers and after10 school programs, neighborhood-run mothers-day-out

11 programs, and family child care providers has grown

12 among working parents, and parents who stay at

13 home, who want their children to have access to

14 early childhood education.

15 (2) All parents should have access to safe, stim16 ulating, and educational early childhood education

17 programs for their children, whether such programs

18 are carried out in a child care center, a part-time

19 nursery school (including a nursery school operated

20 by a religious organization), or a certified child care

21 provider’s home.

22 (3) The number of available enrollment oppor23 tunities for children to receive quality child care

24 services is not meeting the demand for such services.
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1 (4) In 1995 there were about 21,000,000 chil2 dren less than 6 years of age, of whom 31 percent

3 were participating in center-based child care services

4 and 14 percent were receiving child care in homes.

5 Between 1992 and 2005 the participation of women

6 24 to 54 years of age in the labor force is projected

7 to increase from 75 percent to 83 percent.

8 (5) In States that have set up a mechanism to

9 provide capital improvements for child care facilities,

10 the demand for services of such facilities still has

11 not been met.

12 (6) The United States is behind other western,

13 industrialized countries when it comes to providing

14 child care services. In France, almost 100 percent of

15 all children 3 to 5 years of age attend nursery

16 school. In Germany this number is 65 to 70 percent.

17 In Japan 90 percent of such children attend some

18 form of preschool care. In all of these countries early

19 childhood care has proven to increase children’s de20 velopment and performance.
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1 SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHA2 BILITATED CHILD CARE AND DEVELOPMENT

3 FACILITIES.

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

5 et seq.) is amended by adding at the end the following

6 new section:

7 ‘‘MORTGAGE INSURANCE FOR CHILD CARE AND

8 DEVELOPMENT FACILITIES

9 ‘‘SEC. 257. (a) PURPOSE.—The purpose of this sec10 tion is to facilitate and assist in the provision and develop11 ment of licensed child care and development facilities.

12 ‘‘(b) GENERAL INSURANCE AUTHORITY.—The Sec13 retary may insure mortgages (including advances on such

14 mortgages during construction) in accordance with the

15 provisions of this section and upon such terms and condi16 tions as the Secretary may prescribe and may make com17 mitments for insurance of such mortgages before the date

18 of their execution or disbursement thereon.

19 ‘‘(c) ELIGIBLE MORTGAGES.—To carry out the pur20 pose of this section, the Secretary may insure any mort21 gage that covers a new child care and development facility,

22 including a new addition to an existing child care and de23 velopment facility (regardless of whether the existing facil24 ity is being rehabilitated), or a substantially rehabilitated

25 child care and development facility, including equipment
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1 to be used in the operation of the facility, subject to the

2 following conditions:

3 ‘‘(1) APPROVED MORTGAGOR.—The mortgage

4 shall be executed by a mortgagor approved by the

5 Secretary. The Secretary may, in the discretion of

6 the Secretary, require any such mortgagor to be reg7 ulated or restricted as to charges and methods of fi8 nancing and, if the mortgagor is a corporate entity,

9 as to capital structure and rate of return. As an aid

10 to the regulation or restriction of any mortgagor

11 with respect to any of the foregoing matters, the

12 Secretary may make such contracts with and acquire

13 for not more than $100 such stock or interest in

14 such mortgagor as the Secretary may consider nec15 essary. Any stock or interest so purchased shall be

16 paid for out of the General Insurance Fund, and

17 shall be redeemed by the mortgagor at par upon the

18 termination of all obligations of the Secretary under

19 the insurance.

20 ‘‘(2) PRINCIPAL OBLIGATION.—

21 ‘‘(A) IN GENERAL.—Except as provided in

22 subparagraph (B), the mortgage shall involve a

23 principal obligation in an amount not to exceed

24 80 percent of the estimated value of the prop25 erty or project, or 85 percent of the estimated
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1 value of the property or project in the case only

2 of a mortgagor that is a private nonprofit cor3 poration or association (as such term is defined

4 pursuant to section 221(d)(3)), including—

5 ‘‘(i) equipment to be used in the oper6 ation of the facility when the proposed im7 provements are completed and the equip8 ment is installed; or

9 ‘‘(ii) a solar energy system (as defined

10 in subparagraph (3) of the last paragraph

11 of section 2(a)) or residential energy con12 servation measures (as defined in subpara13 graphs (A) through (G) and (I) of section

14 210(11) of the National Energy Conserva15 tion Policy Act), in cases in which the Sec16 retary determines that such measures are

17 in addition to those required under the

18 minimum property standards and will be

19 cost-effective over the life of the measure.

20 ‘‘(B) INCREASE FOR CERTAIN DISTRESSED

21 AREAS.—In the case of any mortgage for a

22 child care and development facility that is lo23 cated in a distressed area and for which more

24 than 50 percent of the children served by the

25 facility are children of families or individuals
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1 who are eligible for assistance under a State

2 program for temporary assistance for needy

3 families that is funded under part A of title IV

4 of the Social Security Act, the mortgage shall

5 involve principal obligation in an amount not to

6 exceed the sum of the amount determined

7 under subparagraph (A) for the mortgagor and

8 5 percent of the estimated value of the property

9 or project.

10 ‘‘(3) AMORTIZATION AND INTEREST.—The

11 mortgage shall—

12 ‘‘(A) provide for complete amortization by

13 periodic payments under such terms as the Sec14 retary shall prescribe;

15 ‘‘(B) have a maturity satisfactory to the

16 Secretary, but in no event longer than 25 years;

17 and

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

19 agreed upon by the mortgagor and the mort20 gagee, and the Secretary shall not issue any

21 regulations or establish any terms or conditions

22 that interfere with the ability of the mortgagor

23 and mortgagee to determine the interest rate.

24 ‘‘(d) CERTIFICATION BY CHILDREN’S DEVELOPMENT

25 COMMISSION.—The Secretary may not insure a mortgage
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1 under this section unless the Children’s Development

2 Commission established under section 258 certifies that

3 the facility is in compliance, or will be in compliance not

4 later than 12 months after such certification, with—

5 ‘‘(1) any laws, standards, and requirements ap6 plicable to such facilities under the laws of the

7 State, municipality, or other unit of general local

8 government in which the facility is or is to be lo9 cated; and

10 ‘‘(2) after the effective date of the standards

11 and requirements established under section

12 258(c)(2), such standards and requirements.

13 ‘‘(e) LOW-INCOME CLIENTELE.—The Secretary may

14 not insure a mortgage under this section unless the mort15 gage certifies, to the satisfaction of the Secretary, that not

16 less than 20 percent of the children served by the facility

17 during the period that the mortgage is outstanding shall

18 be children of families having incomes less than the me19 dian income for the metropolitan statistical area in which

20 the facility is located.

21 ‘‘(f) RELEASE.—The Secretary may consent to the

22 release of a part or parts of the mortgaged property or

23 project from the lien of any mortgage insured under this

24 section upon such terms and conditions as the Secretary

25 may prescribe.
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1 ‘‘(g) MORTGAGE INSURANCE TERMS.—The provi2 sions of subsections (d), (e), (g), (h), (i), (j), (k), (l), and

3 (n) of section 207 shall apply to mortgages insured under

4 this section, except that all references in such subsections

5 to section 207 shall be considered, for purposes of mort6 gage insurance under this section, to refer to this section.

7 ‘‘(h) MORTGAGE INSURANCE FOR FIRE SAFETY

8 EQUIPMENT LOANS.—

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

10 such terms and condition as the Secretary may pre11 scribe, make commitments to insure and insure

12 loans made by financial institutions or other ap13 proved mortgagees to child care and development fa14 cilities to provide for the purchase and installation

15 of fire safety equipment necessary for compliance

16 with the 1967 edition of the Life Safety Code of the

17 National Fire Protection Association (or any subse18 quent edition specified by the Secretary of Health

19 and Human Services).

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

21 insurance under this subsection a loan shall—

22 ‘‘(A) not exceed the Secretary’s estimate of

23 the reasonable cost of the equipment fully in24 stalled;
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1 ‘‘(B) bear interest at such rate as may be

2 agreed upon by the mortgagor and the mort3 gagee;

4 ‘‘(C) have a maturity satisfactory to the

5 Secretary;

6 ‘‘(D) be made by a financial institution or

7 other mortgagee approved by the Secretary as

8 eligible for insurance under section 2 or a mort9 gagee approved under section 203(b)(1);

10 ‘‘(E) comply with other such terms, condi11 tions, and restrictions as the Secretary may

12 prescribe; and

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

14 and development facility that complies with the

15 requirement under subsection (d).

16 ‘‘(3) INSURANCE REQUIREMENTS.—The provi17 sions of paragraphs (5), (6), (7), (9), and (10) of

18 section 220(h) shall apply to loans insured under

19 this subsection, except that all references in such

20 paragraphs to home improvement loans shall be con21 sidered, for purposes of this subsection, to refer to

22 loans under this subsection. The provisions of sub23 sections (c), (d), and (h) of section 2 shall apply to

24 loans insured under this subsection, except that all

25 references in such subsections to ‘this section’ or
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1 ‘this title’ shall be considered, for purposes of this

2 subsection, to refer to this subsection.

3 ‘‘(i) SCHEDULES AND DEADLINES.—The Secretary

4 shall establish schedules and deadlines for the processing

5 and approval (or provision of notice of disapproval) of ap6 plications for mortgage insurance under this section.

7 ‘‘(j) DEFINITIONS.—For the purposes of this section,

8 the following definitions shall apply:

9 ‘‘(1) CHILD CARE AND DEVELOPMENT FACIL10 ITY.—The term ‘child care and development facility’

11 means a public facility, proprietary facility, or facil12 ity of a private nonprofit corporation or association

13 that—

14 ‘‘(A) has as its purpose the care and devel15 opment of children less than 12 years of age;

16 and

17 ‘‘(B) is licensed or regulated by the State

18 in which it is located (or, if there is no State

19 law providing for such licensing and regulation

20 by the State, by the municipality or other polit21 ical subdivision in which the facility is located).

22 The term does not include facilities for school-age

23 children primarily for use during normal school

24 hours. The term includes facilities for training indi-
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1 viduals to provide child care and development serv2 ices.

3 ‘‘(2) DISTRESSED AREA.—The term ‘distressed

4 area’ means an area that—

5 ‘‘(A) meets the requirements under sub6 chapter U of chapter I of the Internal Revenue

7 Code (26 U.S.C. 1391 et seq.) for designation

8 as an enterprise community or empowerment

9 zone under such subchapter; or

10 ‘‘(B) is a census tract that has a median

11 income that does not exceed 50 percent of the

12 median income for the region in which the cen13 sus tract is located, as determined by the Sec14 retary.

15 For purposes of subparagraph (B), a region shall be

16 determined by the Secretary in the same manner as

17 areas are determined for purposes of determining in18 come limitations for assistance under section 8 of

19 the United States Housing Act of 1937 (42 U.S.C.

20 1437f).

21 ‘‘(3) EQUIPMENT.—The term ‘equipment’ in22 cludes machinery, utilities, and built-in equipment

23 and any necessary enclosures or structures to house

24 them, and any other items necessary for the func25 tioning of a particular facility as a child care and
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1 development facility, including necessary furniture.

2 Such term includes books, curricular, and program

3 materials.

4 ‘‘(4) MORTGAGE; FIRST MORTGAGE; MORT5 GAGEE.—The term ‘mortgage’ means a first mort6 gage on real estate in fee simple, or on the interest

7 of either the lessor or lessee thereof under a lease

8 having a period of not less than 7 years to run be9 yond the maturity date of the mortgage. The term

10 ‘first mortgage’ means such classes of first liens as

11 are commonly given to secure advances (including

12 advances during construction) on, or the unpaid pur13 chase price of, real estate under the laws of the

14 State in which the real estate is located, together

15 with the credit instrument or instruments (if any)

16 secured thereby, and any mortgage may be in the

17 form of one or more trust mortgages or mortgage

18 indentures or deeds of trust, securing notes, bonds,

19 or other credit instruments, and, by the same instru20 ment or by a separate instrument, may create a se21 curity interest in initial equipment, whether or not

22 attached to the realty. The term ‘mortgagor’ has the

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

24 ‘‘(k) LIMITATION ON INSURANCE AUTHORITY.—
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1 ‘‘(1) TERMINATION.—No mortgage may be in2 sured under this section or section 223(h) after Sep3 tember 30, 2008, except pursuant to a commitment

4 to insure issued on or before such date.

5 ‘‘(2) AGGREGATE PRINCIPAL AMOUNT LIMITA6 TION.—The aggregate principal amount of mort7 gages for which the Secretary enters into commit8 ments to insure under this section or section 223(h)

9 on or before the date under paragraph (1) may not

10 exceed $2,000,000,000. If, upon the date under

11 paragraph (1), the aggregate insurance authority

12 provided under this paragraph has not been fully

13 used, the Secretary of the Treasury shall submit a

14 report to the Congress evaluating the need for con15 tinued mortgage insurance under this section.’’.

16 ‘‘(l) REGULATIONS.—The Secretary shall issue any

17 regulations necessary to carry out this section. In issuing

18 such regulations, the Secretary shall consult with the Sec19 retary of Health and Human Services with respect to any

20 aspects of the regulations regarding child care and devel21 opment facilities.’’.
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1 SEC. 4. INSURANCE FOR MORTGAGES FOR ACQUISITION OR

2 REFINANCING DEBT OF EXISTING CHILD

3 CARE AND DEVELOPMENT FACILITIES.

4 Section 223 of the National Housing Act (12 U.S.C.

5 1715n) is amended by adding at the end the following new

6 subsection:

7 ‘‘(h) MORTGAGE INSURANCE FOR PURCHASE OR RE8 FINANCING OF EXISTING CHILD CARE AND DEVELOP9 MENT FACILITIES.—

10 ‘‘(1) AUTHORITY.—Notwithstanding any other

11 provision of this Act, the Secretary may insure

12 under any section of this title a mortgage executed

13 in connection with the purchase or refinancing of an

14 existing child care and development facility, the pur15 chase of a structure to serve as a child care and

16 development facility, or the refinancing of existing

17 debt of an existing child care and development facil18 ity.

19 ‘‘(2) PURCHASE OF EXISTING FACILITIES AND

20 STRUCTURES.—In the case of the purchase under

21 this subsection of an existing child care and develop22 ment facility or purchase of an existing structure to

23 serve as such a facility, the Secretary shall prescribe

24 any terms and conditions that the Secretary con25 siders necessary to ensure that—
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1 ‘‘(A) the facility or structure purchased

2 continues to be used as a child care and devel3 opment facility; and

4 ‘‘(B) the facility complies with the same

5 requirements applicable under section 257(d) to

6 facilities having mortgages insured under such

7 section.

8 ‘‘(3) REFINANCING OF EXISTING FACILITIES.—

9 In the case of refinancing of an existing child care

10 and development facility, the Secretary shall pre11 scribe any terms and conditions that the Secretary

12 considers necessary to ensure that—

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

14 monthly debt service costs (taking into account

15 any fees or charges connected with such refi16 nancing) of the existing facility;

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

18 be employed only to retire the existing indebted19 ness and pay the necessary cost of refinancing

20 on the existing facility;

21 ‘‘(C) the existing facility is economically

22 viable; and

23 ‘‘(D) the facility complies with the same

24 requirements applicable under section 257(d) to
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1 facilities having mortgages insured under such

2 section.

3 ‘‘(4) DEFINITIONS.—For purposes of this sub4 section, the terms defined in section 257(j) shall

5 have the same meanings as provided under such sec6 tion.

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

8 The authority of the Secretary to enter into commit9 ments to insure mortgages under this subsection is

10 subject to the limitations under section 257(k).’’.

11 SEC. 5. CHILDREN’S DEVELOPMENT COMMISSION.

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

13 et seq.) is amended by adding at the end (after section

14 257, as added by section 3 of this Act) the following new

15 section:

16 ‘‘CHILDREN’S DEVELOPMENT COMMISSION

17 ‘‘SEC. 258. (a) ESTABLISHMENT.—There is hereby

18 established a commission to be known as the Children’s

19 Development Commission.

20 ‘‘(b) MEMBERSHIP.—

21 ‘‘(1) APPOINTMENT.—The Commission shall be

22 composed of 7 members appointed by the President,

23 not later than the expiration of the 3-month period

24 beginning upon the enactment of this section, by and

25 with the advice and consent of the Senate, as fol26 lows:
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1 ‘‘(A) The Secretary of Housing and Urban

2 Development or the Secretary’s designee.

3 ‘‘(B) The Secretary of Health and Human

4 Services or the Secretary’s designee.

5 ‘‘(C) The Secretary of the Treasury or the

6 Secretary’s designee.

7 ‘‘(D) 4 members shall be appointed from

8 among 12 individuals recommended jointly by

9 the Speaker of the House of Representatives,

10 the Majority Leader of the Senate, Minority

11 Leader of the House of Representatives, the

12 Minority Leader of the Senate.

13 ‘‘(2) QUALIFICATIONS OF CONGRESSIONALLY

14 RECOMMENDED MEMBERS.—Of the members ap15 pointed under paragraph (1)(D)—

16 ‘‘(A) each shall be an individual who ac17 tively participates or is employed in the field of

18 child care and has academic, licensing, or other

19 credentials relating to such participation or em20 ployment; and

21 ‘‘(B) not more than 2 may be of the same

22 political party.

23 ‘‘(3) TERMS.—Each appointed member of the

24 Commission shall serve for a term of 3 years.
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1 ‘‘(4) VACANCIES.—Any member appointed to

2 fill a vacancy occurring before the expiration of the

3 term for which the member’s predecessor was ap4 pointed shall be appointed only for the remainder of

5 that term. A member may serve after the expiration

6 of that member’s term until a successor has taken

7 office. A vacancy in the Commission shall be filled

8 in the manner in which the original appointment was

9 made.

10 ‘‘(5) CHAIRPERSON.—The chairperson of the

11 Commission shall be designated by the President at

12 the time of appointment.

13 ‘‘(6) QUORUM.—A majority of the members of

14 the Commission shall constitute a quorum for the

15 transaction of business.

16 ‘‘(7) VOTING.—Each member of the Commis17 sion shall be entitled to 1 vote, which shall be equal

18 to the vote of every other member of the Commis19 sion.

20 ‘‘(8) PROHIBITION ON ADDITIONAL PAY.—

21 Members of the Commission shall serve without

22 compensation, but shall be reimbursed for travel,

23 subsistence, and other necessary expenses incurred

24 in the performance of their duties as members of the

25 Commission.
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1 ‘‘(c) FUNCTIONS.—The Commission shall carry out

2 the following functions:

3 ‘‘(1) CERTIFICATION OF COMPLIANCE.—The

4 Commission shall collect such information and make

5 such determinations as may be necessary to deter6 mine, for purposes of section 257(d), whether child

7 care and development facilities comply, or will be in

8 compliance within 12 months, with—

9 ‘‘(A) any laws, standards, and require10 ments applicable to such facilities under the

11 laws of the State, municipality, or other unit of

12 general local government in which the facility is

13 or is to be located, and

14 ‘‘(B) after the effective date of the stand15 ards and requirements established under para16 graph (2), such standards and requirements,

17 and shall issue certifications of such compliance.

18 ‘‘(2) ESTABLISHMENT OF STANDARDS.—

19 ‘‘(A) STUDY.—Not later than 12 months

20 after the date on which appointment of initial

21 membership of the Commission is completed,

22 the Commission, in consultation with the Sec23 retary of Housing and Urban Development and

24 the Secretary of Health and Human Services,

25 shall conduct a study to determine the laws,
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1 standards, and requirements referred to in

2 paragraph (1)(A) that are applicable in each

3 State. Taking into consideration the findings of

4 the study, the Secretary shall establish stand5 ards and requirements regarding child care and

6 development facilities that are designed to en7 sure that mortgage insurance is provided under

8 section 257 and section 223(h) only for safe,

9 clean, and healthy facilities that provide appro10 priate care and development services for chil11 dren.

12 ‘‘(B) PUBLICATION.—The Commission

13 shall issue regulations providing for the stand14 ards and requirements established under sub15 paragraph (A) to take effect, for purposes of

16 sections 257(d)(2) and 223(h)(2)(B) and para17 graph (1)(B) of this section, not later than 18

18 months after the date of the enactment of this

19 section.

20 ‘‘(3) SMALL PURPOSE LOANS.—The Commis21 sion shall, to the extent amounts are made available

22 for such purpose pursuant to subsection (i) and

23 qualified requests are received, make loans, directly

24 or indirectly to providers of child care and develop-
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1 ment facilities for reconstruction or renovation of

2 such facilities, subject to the following requirements:

3 ‘‘(A) Loans under this paragraph shall be

4 made only for such facilities that are financially

5 and operationally viable, as determined under

6 standards and guidelines to be established by

7 the Commission.

8 ‘‘(B) The aggregate amount of loans made

9 under this paragraph to a single borrower may

10 not exceed $50,000.

11 ‘‘(C) A loan made under this paragraph

12 may not have a term exceeding 15 years.

13 ‘‘(D) Loans under this paragraph shall

14 bear interest at rates and be made under such

15 other conditions and terms as the Commission

16 shall provide.

17 ‘‘(4) NOTIFICATION.—The Commission shall

18 take such actions as may be necessary to publicize

19 the availability of the programs for mortgage insur20 ance under sections 257 and 223(h) and loans under

21 paragraph (3) of this subsection in a manner that

22 ensures that information concerning such programs

23 will be available to child care providers throughout

24 the United States.
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1 ‘‘(5) TECHNICAL ASSISTANCE.—The Commis2 sion shall make available, to mortgagors of mort3 gages insured under section 257 or 223(h) and to

4 borrowers under paragraph (3) of this subsection,

5 technical assistance and expertise in the business as6 pects of operating child care and development facili7 ties (including business planning and quality control

8 assistance). The Commission shall provide such as9 sistance and expertise directly and in coordination

10 with appropriate Federal agencies (including the De11 partment of Housing and Urban Development, the

12 Department of Health and Human Services, the De13 partment of Defense, and the Small Business Ad14 ministration),

15 ‘‘(6) LIABILITY INSURANCE.—Not later than 12

16 months after the date on which appointment of ini17 tial membership of the Commission is completed, the

18 Commission shall establish standards and guidelines,

19 applicable to mortgage insurance under sections 257

20 and 223(h) and loans under paragraph (3) of this

21 subsection, requiring child care providers operating

22 child care and development facilities assisted under

23 such provisions to obtain and maintain liability in24 surance in such amounts and subject to such re-
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1 quirements as the Commission considers appro2 priate.

3 ‘‘(7) RESEARCH FOUNDATION.—Not later than

4 12 months after the date of the enactment of this

5 section, the Commission shall submit a report to the

6 Congress recommending a plan for establishing and

7 funding a foundation that is an entity independent

8 of the Commission (but which maintains association

9 with the Commission)—

10 ‘‘(A) which shall have as its purpose—

11 ‘‘(i) to support research relating to

12 child care and development facilities;

13 ‘‘(ii) to fund pilot programs to test in14 novative methods for improving child care;

15 and

16 ‘‘(iii) to engage in activities and pub17 lish materials to assist persons interested

18 in mortgage insurance under sections 257

19 and 223(h) and other assistance provided

20 by the Commission; and

21 ‘‘(B) which shall have the authority to ac22 cept, use, and dispose of gifts, bequests, or de23 vises of services or property, both real and per24 sonal, for the purpose of aiding or facilitating

25 the work of the foundation.
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1 ‘‘(8) STUDY REGARDING CAPITAL NEEDS OF

2 CENTER-BASED CHILD CARE IN LOW-INCOME COM3 MUNITIES.—The Commission shall provide for the

4 conducting of a study of center-based child care for

5 families in low-income communities and neighbor6 hoods that—

7 ‘‘(A) determines the existing supply and

8 quality of such care in such areas;

9 ‘‘(B) identifies the economic and other

10 market barriers in such areas to—

11 ‘‘(i) creating an adequate supply of

12 center-based child care services; and

13 ‘‘(ii) achieving a quality standard in

14 child care centers adequate to support

15 early childhood programs; and

16 ‘‘(C) proposes public policy and private

17 sector initiatives that might be taken to ensure

18 that such areas have—

19 ‘‘(i) a supply of center-based child

20 care facilities sufficient for child care needs

21 of the areas and to facilitate employment

22 and support the goals of welfare reform;

23 ‘‘(ii) appropriate child care choices;

24 and
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1 ‘‘(iii) sufficient quality of care nec2 essary to prepare at-risk children for

3 school.

4 The Commission shall submit to the Congress a re5 port regarding the results of the study conducted

6 under this section not later than the expiration of

7 the 18-month period beginning on the date of the

8 appointment of the executive director pursuant to

9 subsection (f)(1).

10 ‘‘(d) NONDISCRIMINATION REQUIREMENT.—

11 ‘‘(1) IN GENERAL.—The Commission may not

12 certify under subsection (c)(1) or carry out any ac13 tivities of the Commission with respect to any child

14 care and development facility if the provider of the

15 facility discriminates on account of race, color, reli16 gion (subject to paragraph (2)), national origin, sex

17 (to the extent provided in title IX of the Education

18 Amendments of 1972 (20 U.S.C. 1681 et seq.)), or

19 handicapping condition.

20 ‘‘(2) FACILITIES OF RELIGIOUS ORGANIZA21 TIONS.—The prohibition with respect to religion

22 shall not apply to a child care and development facil23 ity which is controlled by or which is closely identi24 fied with the tenets of a particular religious organi25 zation if the application of this subsection would not
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1 be consistent with the religious tenets of such orga2 nization.

3 ‘‘(3) CERTIFICATION.—As a condition of certifi4 cation under subsection (c)(1) and eligibility for a

5 loan under subsection (c)(3), the provider of a child

6 care and development facility shall certify to the

7 Commission that the provider does not discriminate,

8 as required by the provisions of paragraph (1) of

9 this subsection.

10 ‘‘(e) POWERS.—

11 ‘‘(1) ASSISTANCE FROM FEDERAL AGENCIES.—

12 The Commission may secure directly from any de13 partment or agency of the Federal Government such

14 information as the Commission may require for car15 rying out its functions. Upon request of the Com16 mission, any such department or agency shall fur17 nish such information.

18 ‘‘(2) ASSISTANCE FROM GENERAL SERVICES

19 ADMINISTRATION.—The Administrator of General

20 Services shall provide to the Commission, on a reim21 bursable basis, such administrative support services

22 as the Commission may request.

23 ‘‘(3) ASSISTANCE FROM DEPARTMENT OF

24 HOUSING AND URBAN DEVELOPMENT.—Upon the re25 quest of the Commission, the Secretary of Housing
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1 and Urban Development shall, to the extent possible

2 and subject to the discretion of the Secretary, detail

3 any of the personnel of the Department of Housing

4 and Urban Development, on a nonreimbursable

5 basis, to assist the Commission in carrying out its

6 functions under this section.

7 ‘‘(4) MAILS.—The Commission may use the

8 United States mails in the same manner and under

9 the same conditions as other Federal agencies.

10 ‘‘(f) STAFF.—

11 ‘‘(1) EXECUTIVE DIRECTOR.—The Commission

12 shall appoint an executive director, who shall be

13 compensated at a rate fixed by the Commission, but

14 which shall not exceed the rate established for level

15 I of the Executive Schedule under title 5, United

16 States Code.

17 ‘‘(2) OTHER PERSONNEL.—In addition to the

18 executive director, the Commission may appoint and

19 fix the compensation of such personnel as the Com20 mission considers necessary, in accordance with the

21 provisions of title 5, United States Code, governing

22 appointments to the competitive service, and the

23 provisions of chapter 51 and subchapter III of chap24 ter 53 of such title, relating to classification and

25 General Schedule pay rates.
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1 ‘‘(g) REPORTS.—Not later than March 31 of each

2 year, the Commission shall submit a report to the Presi3 dent and the Congress regarding the operations and activi4 ties of the Commission during the preceding calendar year.

5 Each annual report shall include a copy of the Commis6 sion’s financial statements and such information and other

7 evidence as is necessary to demonstrate that the activities

8 of the Commission during the year for which the report

9 is made. The Commission may also submit reports to the

10 Congress and President at such other times as the Com11 mission deems desirable.

12 ‘‘(h) DEFINITIONS.—For purposes of this section, the

13 terms defined in section 257(j) shall have the same mean14 ings as provided under such section.

15 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There

16 are authorized to be appropriated to the Commission to

17 carry out this section $20,000,000 for fiscal year 2000,

18 to remain available until expended, of which not more than

19 $2,500,000 shall be available for administrative costs of

20 the Commission and the remainder of which shall be avail21 able only for loans under subsection (c)(3).’’.
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1 SEC. 6. STUDY OF AVAILABILITY OF SECONDARY MARKETS

2 FOR MORTGAGES ON CHILD CARE FACILI3 TIES.

4 The Secretary of the Treasury shall conduct a study

5 of the secondary mortgage markets to determine—

6 (1) whether such a market exists for purchase

7 of mortgages eligible for insurance under sections

8 223(h) and 257 of the National Housing Act (as

9 added by this Act);

10 (2) whether such a market would affect the

11 availability of credit available for development of

12 child care and development facilities or would lower

13 development costs of such facilities; and

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

15 activities to provide credit enhancement for child

16 care and development facilities loans is needed to

17 meet the demand for such facilities.

18 The Secretary of the Treasury shall submit to the Con19 gress a report regarding the results of the study conducted

20 under this section not later than the expiration of the 2-

21 year period beginning on the date of the enactment of this

22 Act.

Æ