II 

109TH CONGRESS 

1ST SESSION S. 526 

To amend the Child Care and Development Block Grant Act of 1990 to 

provide incentive grants to improve the quality of child care. 

IN THE SENATE OF THE UNITED STATES 

MARCH 3, 2005 

Mr. REED (for himself, Mr. DODD, Mr. KENNEDY, and Mrs. MURRAY) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To amend the Child Care and Development Block Grant 

Act of 1990 to provide incentive grants to improve the 

quality of child care. 

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 ‘‘Child Care Quality 

5 Incentive Act of 2005’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 
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1 (1) Recent research on early brain development 

2 reveals that much of a child’s growth is determined 

3 by early learning and nurturing care. Research also 

4 shows that quality early care and education leads to 

5 increased cognitive abilities, positive classroom learn6 ing behavior, increased likelihood of long-term school 

7 success, and greater likelihood of long-term economic 

8 and social self-sufficiency. 

9 (2) Each day an estimated 13,000,000 children, 

10 including 6,000,000 infants and toddlers, spend 

11 some part of their day in child care. However, a 

12 study in 4 States found that only 1 in 7 child care 

13 centers provide care that promotes healthy develop14 ment, while 1 in 8 child care centers provide care 

15 that threatens the safety and health of children. 

16 (3) Full-day child care can cost $4,000 to 

17 $12,000 per year. 

18 (4) Although Federal assistance is available for 

19 child care, funding is severely limited. Even with 

20 Federal subsidies, many families cannot afford child 

21 care. For families with young children and a month22 ly income under $1,200, the cost of child care typi23 cally consumes 25 percent of their income. 

24 (5) Payment (or reimbursement) rates, which 

25 determine the maximum the State will reimburse a 
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1 child care provider for the care of a child who re2 ceives a subsidy, are too low to ensure that quality 

3 care is accessible to all families. 

4 (6) Low payment rates directly affect the kind 

5 of care children get and whether families can find 

6 quality child care in their communities. In many in7 stances, low payment rates force child care providers 

8 serving low-income children to cut corners in ways 

9 that impact the quality of care for the children, in10 cluding reducing the number of staff, eliminating 

11 professional development opportunities, and cutting 

12 enriching educational activities and services. 

13 (7) Children in low-quality child care are more 

14 likely to have delayed reading and language skills, 

15 and display more aggression toward other children 

16 and adults. 

17 (8) Increased payment rates lead to higher 

18 quality child care as child care providers are able to 

19 attract and retain qualified staff, provide salary in20 creases and professional training, maintain a safe 

21 and healthy environment, and purchase basic sup22 plies, children’s literature, and developmentally ap23 propriate educational materials. 
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1 (b) PURPOSE.—The purpose of this Act is to improve 

2 the quality of, and access to, child care by increasing child 

3 care payment rates. 

4 SEC. 3. PAYMENT RATES. 

5 Section 658E(c)(4) of the Child Care and Develop6 ment Block Grant Act of 1990 (42 U.S.C. 9858c(c)(4)) 

7 is amended— 

8 (1) by redesignating subparagraph (B) as sub9 paragraph (C); 

10 (2) in subparagraph (A), by striking ‘‘to com11 parable child care services’’ and inserting ‘‘to child 

12 care services that are comparable (in terms of qual13 ity and types of services provided) to child care serv14 ices’’; and 

15 (3) by inserting after subparagraph (A) the fol16 lowing: 

17 ‘‘(B) PAYMENT RATES.— 

18 ‘‘(i) SURVEYS.—In order to provide 

19 the certification described in subparagraph 

20 (A), the State shall conduct statistically 

21 valid and reliable market rate surveys 

22 (that reflect variations in the cost of child 

23 care services by locality), in accordance 

24 with such methodology standards as the 

25 Secretary shall issue. The State shall con-
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1 duct the surveys not less often than at 2- 

2 year intervals, and use the results of such 

3 surveys to implement, not later than 1 

4 year after conducting each survey, pay5 ment rates described in subparagraph (A) 

6 that ensure equal access to comparable 

7 services as required by subparagraph (A). 

8 ‘‘(ii) COST OF LIVING ADJUST9 MENTS.—The State shall adjust the pay10 ment rates at intervals between such sur11 veys to reflect increases in the cost of liv12 ing, in such manner as the Secretary may 

13 specify. 

14 ‘‘(iii) RATES FOR DIFFERENT AGES

15 AND TYPES OF CARE.—The State shall en16 sure that the payment rates reflect vari17 ations in the cost of providing child care 

18 services for children of different ages and 

19 providing different types of care. 

20 ‘‘(iv) PUBLIC DISSEMINATION.—The 

21 State shall, not later than 30 days after 

22 the completion of each survey described in 

23 clause (i), make the results of the survey 

24 widely available through public means, in-
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1 cluding posting the results on the Inter2 net.’’. 

3 SEC. 4. INCENTIVE GRANTS TO IMPROVE THE QUALITY OF 

4 CHILD CARE. 

5 (a) FUNDING.—Section 658B of the Child Care and 

6 Development Block Grant Act of 1990 (42 U.S.C. 9858) 

7 is amended— 

8 (1) by striking ‘‘There’’ and inserting the fol9 lowing: 

10 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.— 

11 There’’; 

12 (2) in subsection (a), by inserting ‘‘(other than 

13 section 658H)’’ after ‘‘this subchapter’’; and 

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

15 ‘‘(b) APPROPRIATION OF FUNDS FOR GRANTS TO IM16 PROVE THE QUALITY OF CHILD CARE.—Out of any funds 

17 in the Treasury that are not otherwise appropriated, there 

18 is authorized to be appropriated and there is appropriated 

19 $500,000,000 for each of fiscal years 2006 through 2010, 

20 for the purpose of making grants under section 658H.’’. 

21 (b) USE OF BLOCK GRANT FUNDS.—Section 

22 658E(c)(3) of the Child Care and Development Block 

23 Grant Act of 1990 (42 U.S.C. 9858c(c)(3)) is amended— 
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1 (1) in subparagraph (B), by striking ‘‘under 

2 this subchapter’’ and inserting ‘‘under this sub3 chapter (other than section 658B(b))’’; and 

4 (2) in subparagraph (D), by inserting ‘‘(other 

5 than section 658H)’’ after ‘‘under this subchapter’’. 

6 (c) ESTABLISHMENT OF PROGRAM.—Section 658G of 

7 the Child Care and Development Block Grant Act of 1990 

8 (42 U.S.C. 9858e) is amended by inserting ‘‘(other than 

9 section 658H)’’ after ‘‘this subchapter’’. 

10 (d) GRANTS TO IMPROVE THE QUALITY OF CHILD

11 CARE.—The Child Care and Development Block Grant 

12 Act of 1990 (42 U.S.C. 9858 et seq.) is amended by in13 serting after section 658G the following: 

14 ‘‘SEC. 658H. GRANTS TO IMPROVE THE QUALITY OF CHILD 

15 CARE. 

16 ‘‘(a) AUTHORITY.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall use the 

18 amount appropriated under section 658B(b) for a 

19 fiscal year to make grants to eligible States, and In20 dian tribes and tribal organizations, in accordance 

21 with this section. 

22 ‘‘(2) ANNUAL PAYMENTS.—The Secretary shall 

23 make an annual payment for such a grant to each 

24 eligible State, and for Indian tribes and tribal orga25 nizations, out of the corresponding payment or allot-
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1 ment made under subsections (a), (b), and (e) of 

2 section 658O from the amount appropriated under 

3 section 658B(b). 

4 ‘‘(b) ELIGIBLE STATES.— 

5 ‘‘(1) IN GENERAL.—In this section, the term 

6 ‘eligible State’ means a State that— 

7 ‘‘(A) has conducted a statistically valid 

8 survey of the market rates for child care serv9 ices in the State within the 2 years preceding 

10 the date of the submission of an application 

11 under paragraph (2); and 

12 ‘‘(B) submits an application in accordance 

13 with paragraph (2). 

14 ‘‘(2) APPLICATION.— 

15 ‘‘(A) IN GENERAL.—To be eligible to re16 ceive a grant under this section, a State shall 

17 submit an application to the Secretary at such 

18 time, in such manner, and accompanied by such 

19 information, in addition to the information re20 quired under subparagraph (B), as the Sec21 retary may require. 

22 ‘‘(B) INFORMATION REQUIRED.—Each ap23 plication submitted for a grant under this sec24 tion shall— 
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1 ‘‘(i) detail the methodology and re2 sults of the State market rates survey con3 ducted pursuant to paragraph (1)(A); 

4 ‘‘(ii) describe the State’s plan to in5 crease payment rates from the initial base6 line determined under clause (i); 

7 ‘‘(iii) describe how the State will in8 crease payment rates in accordance with 

9 the market survey results, for all types of 

10 child care providers who provide services 

11 for which assistance is made available 

12 under this subchapter; 

13 ‘‘(iv) describe how payment rates will 

14 be set to reflect the variations in the cost 

15 of providing care for children of different 

16 ages and different types of care; 

17 ‘‘(v) describe how the State will 

18 prioritize increasing payment rates for— 

19 ‘‘(I) care of higher-than-average 

20 quality, such as care by accredited 

21 providers or care that includes the 

22 provision of comprehensive services; 

23 ‘‘(II) care for children with dis24 abilities and children served by child 

25 protective services; or 
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1 ‘‘(III) care for children in com2 munities served by local educational 

3 agencies that have been identified for 

4 improvement under section 1116(c)(3) 

5 of the Elementary and Secondary 

6 Education Act of 1965 (20 U.S.C. 

7 6316(c)(3)); 

8 ‘‘(vi) describe the State’s plan to as9 sure that the State will make the payments 

10 on a timely basis and follow the usual and 

11 customary market practices with regard to 

12 payment for child absentee days; and 

13 ‘‘(vii) describe the State’s plans for 

14 making the results of the survey widely 

15 available through public means. 

16 ‘‘(3) CONTINUING ELIGIBILITY REQUIRE17 MENT.— 

18 ‘‘(A) SECOND AND SUBSEQUENT PAY19 MENTS.—A State shall be eligible to receive a 

20 second or subsequent annual payment under 

21 this section only if the Secretary determines 

22 that the State has made progress, through the 

23 activities assisted under this subchapter, in 

24 maintaining increased payment rates. 
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1 ‘‘(B) THIRD AND SUBSEQUENT PAY2 MENTS.—A State shall be eligible to receive a 

3 third or subsequent annual payment under this 

4 section only if the State has conducted, at least 

5 once every 2 years, an update of the survey de6 scribed in paragraph (1)(A). 

7 ‘‘(4) REQUIREMENT OF MATCHING FUNDS.— 

8 ‘‘(A) IN GENERAL.—To be eligible to re9 ceive a grant under this section, the State shall 

10 agree to make available State contributions 

11 from State sources toward the costs of the ac12 tivities to be carried out by the State pursuant 

13 to subsection (c) in an amount that is not less 

14 than 20 percent of such costs. 

15 ‘‘(B) DETERMINATION OF STATE CON16 TRIBUTIONS.—Such State contributions shall be 

17 in cash. Amounts provided by the Federal Gov18 ernment may not be included in determining 

19 the amount of such State contributions. 

20 ‘‘(c) USE OF FUNDS.— 

21 ‘‘(1) PRIORITY USE.—An eligible State that re22 ceives a grant under this section shall use the funds 

23 received to significantly increase the payment rate 

24 for the provision of child care assistance in accord25 ance with this subchapter up to the 100th percentile 
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1 of the market rate determined under the market 

2 rate survey described in subsection (b)(1)(A). 

3 ‘‘(2) ADDITIONAL USES.—An eligible State that 

4 demonstrates to the Secretary that the State has 

5 achieved a payment rate of the 100th percentile of 

6 the market rate determined under the market rate 

7 survey described in subsection (b)(1)(A) may use 

8 funds received under a grant made under this sec9 tion for any other activity that the State dem10 onstrates to the Secretary will enhance the quality of 

11 child care services provided in the State. 

12 ‘‘(3) SUPPLEMENT NOT SUPPLANT.—Amounts 

13 paid to a State under this section shall be used to 

14 supplement and not supplant other Federal, State, 

15 or local funds provided to the State under this sub16 chapter or any other provision of law. 

17 ‘‘(d) EVALUATIONS AND REPORTS.— 

18 ‘‘(1) STATE EVALUATIONS.—Each eligible State 

19 shall submit to the Secretary, at such time and in 

20 such form and manner as the Secretary may require, 

21 information regarding the State’s efforts to increase 

22 payment rates and the impact increased payment 

23 rates are having on the quality of child care in the 

24 State and the access of parents to high-quality child 

25 care in the State. 
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1 ‘‘(2) REPORTS TO CONGRESS.—The Secretary 

2 shall submit biennial reports to Congress on the in3 formation described in paragraph (1). Such reports 

4 shall include data from the applications submitted 

5 under subsection (b)(2) as a baseline for deter6 mining the progress of each eligible State in main7 taining increased payment rates. 

8 ‘‘(e) INDIAN TRIBES AND TRIBAL ORGANIZATIONS.— 

9 The Secretary shall determine the manner in which and 

10 the extent to which the provisions of this section apply 

11 to Indian tribes and tribal organizations. 

12 ‘‘(f) PAYMENT RATE.—In this section, the term ‘pay13 ment rate’ means the rate of reimbursement to providers 

14 for subsidized child care.’’. 

15 (e) PAYMENTS.—Section 658J(a) of the Child Care 

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

17 9858h(a)) is amended by inserting ‘‘from funds appro18 priated under section 658B(a)’’ after ‘‘section 658O’’. 

19 (f) ALLOTMENT.—Section 658O of the Child Care 

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

21 9858m) is amended— 

22 (1) in subsection (b)(1), in the matter pre23 ceding subparagraph (A)— 

24 (A) by striking ‘‘section 658B’’ and insert25 ing ‘‘section 658B(a)’’; and 
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1 (B) by inserting ‘‘and from the amounts 

2 appropriated under section 658B(b) for each 

3 fiscal year remaining after reservations under 

4 subsection (a),’’ before ‘‘the Secretary shall 

5 allot’’; and 

6 (2) in subsection (e)— 

7 (A) in paragraph (1), by striking ‘‘the al8 lotment under subsection (b)’’ and inserting 

9 ‘‘an allotment made under subsection (b)’’; and 

10 (B) in paragraph (3), by inserting ‘‘cor11 responding’’ before ‘‘allotment’’. 

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