I 

108TH CONGRESS 

2D SESSION H. R. 5265

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 (Kiddie 

Mac) to certify such facilities for such insurance, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 7, 2004

Mrs. MALONEY introduced the following bill; which was referred to the 

Committee on 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 

(Kiddie Mac) to certify such facilities for such insurance, 

and for other purposes.

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)’’. 
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1 SEC. 2. CONGRESSIONAL FINDINGS. 

2 The Congress finds the following: 

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

4 full-time and part-time child care centers and after5 school programs, neighborhood-run mothers-day-out 

6 programs, and family child care providers has grown 

7 among working parents, and parents who stay at 

8 home, who want their children to have access to 

9 early childhood education. 

10 (2) All parents should have access to safe, stim11 ulating, and educational early childhood education 

12 programs for their children, whether such programs 

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

14 nursery school (including a nursery school operated 

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

16 provider’s home. 

17 (3) The number of available enrollment oppor18 tunities for children to receive quality child care 

19 services is not meeting the demand for such services. 

20 (4) In 1995 there were about 21,000,000 chil21 dren less than 6 years of age, of whom 31 percent 

22 were participating in center-based child care services 

23 and 14 percent were receiving child care in homes. 

24 Between 1992 and 2005 the participation of women 

25 24 to 54 years of age in the labor force is projected 

26 to increase from 75 percent to 83 percent. 
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1 (5) In States that have set up a mechanism to 

2 provide capital improvements for child care facilities, 

3 the demand for services of such facilities still has 

4 not been met. 

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

6 industrialized countries when it comes to providing 

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

8 all children 3 to 5 years of age attend nursery 

9 school. In Germany this number is 78 percent. In 

10 Japan 90 percent of such children attend some form 

11 of preschool care. In all of these countries early 

12 childhood care has proven to increase children’s de13 velopment and performance. 

14 SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHA15 BILITATED CHILD CARE AND DEVELOPMENT 

16 FACILITIES. 

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

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

19 new section: 

20 ‘‘SEC. 257. MORTGAGE INSURANCE FOR CHILD CARE AND 

21 DEVELOPMENT FACILITIES. 

22 ‘‘(a) PURPOSE.—The purpose of this section is to fa23 cilitate and assist in the provision and development of li24 censed child care and development facilities. 
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1 ‘‘(b) GENERAL INSURANCE AUTHORITY.—The Sec2 retary may insure mortgages (including advances on such 

3 mortgages during construction) in accordance with the 

4 provisions of this section and upon such terms and condi5 tions as the Secretary may prescribe and may make com6 mitments for insurance of such mortgages before the date 

7 of their execution or disbursement thereon. 

8 ‘‘(c) ELIGIBLE MORTGAGES.—To carry out the pur9 pose of this section, the Secretary may insure any mort10 gage that covers a new child care and development facility, 

11 including a new addition to an existing child care and de12 velopment facility (regardless of whether the existing facil13 ity is being rehabilitated), or a substantially rehabilitated 

14 child care and development facility, including equipment 

15 to be used in the operation of the facility, subject to the 

16 following conditions: 

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

18 shall be executed by a mortgagor approved by the 

19 Secretary. The Secretary may, in the discretion of 

20 the Secretary, require any such mortgagor to be reg21 ulated or restricted as to charges and methods of fi22 nancing and, if the mortgagor is a corporate entity, 

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

24 to the regulation or restriction of any mortgagor 

25 with respect to any of the foregoing matters, the 
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1 Secretary may make such contracts with and acquire 

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

3 such mortgagor as the Secretary may consider nec4 essary. Any stock or interest so purchased shall be 

5 paid for out of the General Insurance Fund, and 

6 shall be redeemed by the mortgagor at par upon the 

7 termination of all obligations of the Secretary under 

8 the insurance. 

9 ‘‘(2) PRINCIPAL OBLIGATION.—

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

11 subparagraph (B), the mortgage shall involve a 

12 principal obligation in an amount not to exceed 

13 80 percent of the estimated value of the prop14 erty or project, or 85 percent of the estimated 

15 value of the property or project in the case only 

16 of a mortgagor that is a private nonprofit cor17 poration or association (as such term is defined 

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

19 ‘‘(i) equipment to be used in the oper20 ation of the facility when the proposed im21 provements are completed and the equip22 ment is installed; or 

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

24 in subparagraph (3) of the last paragraph 

25 of section 2(a)) or residential energy con-
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1 servation measures (as defined in subpara2 graphs (A) through (G) and (I) of section 

3 210(11) of the National Energy Conserva4 tion Policy Act), in cases in which the Sec5 retary determines that such measures are 

6 in addition to those required under the 

7 minimum property standards and will be 

8 cost-effective over the life of the measure. 

9 ‘‘(B) INCREASE FOR CERTAIN DISTRESSED

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

11 child care and development facility that is lo12 cated in a distressed area and for which more 

13 than 50 percent of the children served by the 

14 facility are children of families or individuals 

15 who are eligible for assistance under a State 

16 program for temporary assistance for needy 

17 families that is funded under part A of title IV 

18 of the Social Security Act, the mortgage shall 

19 involve principal obligation in an amount not to 

20 exceed the sum of the amount determined 

21 under subparagraph (A) for the mortgagor and 

22 5 percent of the estimated value of the property 

23 or project. 

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

25 mortgage shall—
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1 ‘‘(A) provide for complete amortization by 

2 periodic payments under such terms as the Sec3 retary shall prescribe; 

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

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

6 and 

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

8 agreed upon by the mortgagor and the mort9 gagee, and the Secretary shall not issue any 

10 regulations or establish any terms or conditions 

11 that interfere with the ability of the mortgagor 

12 and mortgagee to determine the interest rate. 

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

14 COMMISSION.—The Secretary may not insure a mortgage 

15 under this section unless the Children’s Development 

16 Commission established under section 258 certifies that 

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

18 later than 12 months after such certification, with—

19 ‘‘(1) any laws, standards, and requirements ap20 plicable to such facilities under the laws of the 

21 State, municipality, or other unit of general local 

22 government in which the facility is or is to be lo23 cated; and 
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1 ‘‘(2) after the effective date of the standards 

2 and requirements established under section 

3 258(c)(2), such standards and requirements. 

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

5 not insure a mortgage under this section unless the mort6 gage certifies, to the satisfaction of the Secretary, that not 

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

8 during the period that the mortgage is outstanding shall 

9 be children of families having incomes less than the me10 dian income for the metropolitan statistical area in which 

11 the facility is located. 

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

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

14 project from the lien of any mortgage insured under this 

15 section upon such terms and conditions as the Secretary 

16 may prescribe. 

17 ‘‘(g) MORTGAGE INSURANCE TERMS.—The provi18 sions of subsections (d), (e), (g), (h), (i), (j), (k), (l), and 

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

20 this section, except that all references in such subsections 

21 to section 207 shall be considered, for purposes of mort22 gage insurance under this section, to refer to this section. 

23 ‘‘(h) MORTGAGE INSURANCE FOR FIRE SAFETY

24 EQUIPMENT LOANS.—
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1 ‘‘(1) AUTHORITY.—The Secretary may, upon 

2 such terms and condition as the Secretary may pre3 scribe, make commitments to insure and insure 

4 loans made by financial institutions or other ap5 proved mortgagees to child care and development fa6 cilities to provide for the purchase and installation 

7 of fire safety equipment necessary for compliance 

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

9 National Fire Protection Association (or any subse10 quent edition specified by the Secretary of Health 

11 and Human Services). 

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

13 insurance under this subsection a loan shall—

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

15 the reasonable cost of the equipment fully in16 stalled; 

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

18 agreed upon by the mortgagor and the mort19 gagee; 

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

21 Secretary; 

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

23 other mortgagee approved by the Secretary as 

24 eligible for insurance under section 2 or a mort25 gagee approved under section 203(b)(1); 
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1 ‘‘(E) comply with other such terms, condi2 tions, and restrictions as the Secretary may 

3 prescribe; and 

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

5 and development facility that complies with the 

6 requirement under subsection (d). 

7 ‘‘(3) INSURANCE REQUIREMENTS.—The provi8 sions of paragraphs (5), (6), (7), (9), and (10) of 

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

10 this subsection, except that all references in such 

11 paragraphs to home improvement loans shall be con12 sidered, for purposes of this subsection, to refer to 

13 loans under this subsection. The provisions of sub14 sections (c), (d), and (h) of section 2 shall apply to 

15 loans insured under this subsection, except that all 

16 references in such subsections to ‘this section’ or 

17 ‘this title’ shall be considered, for purposes of this 

18 subsection, to refer to this subsection. 

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

20 shall establish schedules and deadlines for the processing 

21 and approval (or provision of notice of disapproval) of ap22 plications for mortgage insurance under this section. 

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

24 the following definitions shall apply: 
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1 ‘‘(1) CHILD CARE AND DEVELOPMENT FACIL2 ITY.—The term ‘child care and development facility’ 

3 means a public facility, proprietary facility, or facil4 ity of a private nonprofit corporation or association 

5 that—

6 ‘‘(A) has as its purpose the care and devel7 opment of children less than 12 years of age; 

8 and 

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

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

11 law providing for such licensing and regulation 

12 by the State, by the municipality or other polit13 ical subdivision in which the facility is located). 

14 The term does not include facilities for school-age 

15 children primarily for use during normal school 

16 hours. The term includes facilities for training indi17 viduals to provide child care and development serv18 ices. 

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

20 area’ means an area that—

21 ‘‘(A) meets the requirements under sub22 chapter U of chapter I of the Internal Revenue 

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

24 as an enterprise community or empowerment 

25 zone under such subchapter; or 
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1 ‘‘(B) is a census tract that has a median 

2 income that does not exceed 50 percent of the 

3 median income for the region in which the cen4 sus tract is located, as determined by the Sec5 retary. 

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

7 determined by the Secretary in the same manner as 

8 areas are determined for purposes of determining in9 come limitations for assistance under section 8 of 

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

11 1437f). 

12 ‘‘(3) EQUIPMENT.—The term ‘equipment’ in13 cludes machinery, utilities, and built-in equipment 

14 and any necessary enclosures or structures to house 

15 them, and any other items necessary for the func16 tioning of a particular facility as a child care and 

17 development facility, including necessary furniture. 

18 Such term includes books, curricular, and program 

19 materials. 

20 ‘‘(4) MORTGAGE; FIRST MORTGAGE; MORT21 GAGEE.—The term ‘mortgage’ means a first mort22 gage on real estate in fee simple, or on the interest 

23 of either the lessor or lessee thereof under a lease 

24 having a period of not less than 7 years to run be25 yond the maturity date of the mortgage. The term 
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1 ‘first mortgage’ means such classes of first liens as 

2 are commonly given to secure advances (including 

3 advances during construction) on, or the unpaid pur4 chase price of, real estate under the laws of the 

5 State in which the real estate is located, together 

6 with the credit instrument or instruments (if any) 

7 secured thereby, and any mortgage may be in the 

8 form of one or more trust mortgages or mortgage in9 dentures or deeds of trust, securing notes, bonds, or 

10 other credit instruments, and, by the same instru11 ment or by a separate instrument, may create a se12 curity interest in initial equipment, whether or not 

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

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

15 ‘‘(k) LIMITATION ON INSURANCE AUTHORITY.—

16 ‘‘(1) TERMINATION.—No mortgage may be in17 sured under this section or section 223(h) after Sep18 tember 30, 2014, except pursuant to a commitment 

19 to insure issued on or before such date. 

20 ‘‘(2) AGGREGATE PRINCIPAL AMOUNT LIMITA21 TION.—The aggregate principal amount of mort22 gages for which the Secretary enters into commit23 ments to insure under this section or section 223(h) 

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

25 exceed $2,000,000,000. If, upon the date under 
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1 paragraph (1), the aggregate insurance authority 

2 provided under this paragraph has not been fully 

3 used, the Secretary of the Treasury shall submit a 

4 report to the Congress evaluating the need for con5 tinued mortgage insurance under this section. 

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

7 regulations necessary to carry out this section. In issuing 

8 such regulations, the Secretary shall consult with the Sec9 retary of Health and Human Services with respect to any 

10 aspects of the regulations regarding child care and devel11 opment facilities.’’. 

12 SEC. 4. INSURANCE FOR MORTGAGES FOR ACQUISITION OR 

13 REFINANCING DEBT OF EXISTING CHILD 

14 CARE AND DEVELOPMENT FACILITIES. 

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

16 1715n) is amended by adding at the end the following new 

17 subsection: 

18 ‘‘(h) MORTGAGE INSURANCE FOR PURCHASE OR RE19 FINANCING OF EXISTING CHILD CARE AND DEVELOP20 MENT FACILITIES.—

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

22 provision of this Act, the Secretary may insure 

23 under any section of this title a mortgage executed 

24 in connection with the purchase or refinancing of an 

25 existing child care and development facility, the pur-
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1 chase of a structure to serve as a child care and de2 velopment facility, or the refinancing of existing debt 

3 of an existing child care and development facility. 

4 ‘‘(2) PURCHASE OF EXISTING FACILITIES AND

5 STRUCTURES.—In the case of the purchase under 

6 this subsection of an existing child care and develop7 ment facility or purchase of an existing structure to 

8 serve as such a facility, the Secretary shall prescribe 

9 any terms and conditions that the Secretary con10 siders necessary to ensure that—

11 ‘‘(A) the facility or structure purchased 

12 continues to be used as a child care and devel13 opment facility; and 

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

15 requirements applicable under section 257(d) to 

16 facilities having mortgages insured under such 

17 section. 

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

19 In the case of refinancing of an existing child care 

20 and development facility, the Secretary shall pre21 scribe any terms and conditions that the Secretary 

22 considers necessary to ensure that—

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

24 monthly debt service costs (taking into account 
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1 any fees or charges connected with such refi2 nancing) of the existing facility; 

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

4 be employed only to retire the existing indebted5 ness and pay the necessary cost of refinancing 

6 on the existing facility; 

7 ‘‘(C) the existing facility is economically 

8 viable; and 

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

10 requirements applicable under section 257(d) to 

11 facilities having mortgages insured under such 

12 section. 

13 ‘‘(4) DEFINITIONS.—For purposes of this sub14 section, the terms defined in section 257(j) shall 

15 have the same meanings as provided under such sec16 tion. 

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

18 The authority of the Secretary to enter into commit19 ments to insure mortgages under this subsection is 

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

21 SEC. 5. CHILDREN’S DEVELOPMENT COMMISSION. 

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

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

24 257, as added by section 3 of this Act) the following new 

25 section: 
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1 ‘‘SEC. 258. CHILDREN’S DEVELOPMENT COMMISSION 

2 (KIDDIE MAC). 

3 ‘‘(a) ESTABLISHMENT.—There is hereby established 

4 a commission to be known as the Children’s Development 

5 Commission or Kiddie Mac. 

6 ‘‘(b) MEMBERSHIP.—

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

8 composed of 7 members appointed by the President, 

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

10 beginning upon the enactment of this section, by and 

11 with the advice and consent of the Senate, as fol12 lows: 

13 ‘‘(A) The Secretary of Housing and Urban 

14 Development or the Secretary’s designee. 

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

16 Services or the Secretary’s designee. 

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

18 Secretary’s designee. 

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

20 among 12 individuals recommended jointly by 

21 the Speaker of the House of Representatives, 

22 the Majority Leader of the Senate, Minority 

23 Leader of the House of Representatives, the 

24 Minority Leader of the Senate. 
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1 ‘‘(2) QUALIFICATIONS OF CONGRESSIONALLY

2 RECOMMENDED MEMBERS.—Of the members ap3 pointed under paragraph (1)(D)—

4 ‘‘(A) each shall be an individual who ac5 tively participates or is employed in the field of 

6 child care and has academic, licensing, or other 

7 credentials relating to such participation or em8 ployment; and 

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

10 political party. 

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

12 Commission shall serve for a term of 3 years. 

13 ‘‘(4) VACANCIES.—Any member appointed to 

14 fill a vacancy occurring before the expiration of the 

15 term for which the member’s predecessor was ap16 pointed shall be appointed only for the remainder of 

17 that term. A member may serve after the expiration 

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

19 office. A vacancy in the Commission shall be filled 

20 in the manner in which the original appointment was 

21 made. 

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

23 Commission shall be designated by the President at 

24 the time of appointment. 
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1 ‘‘(6) QUORUM.—A majority of the members of 

2 the Commission shall constitute a quorum for the 

3 transaction of business. 

4 ‘‘(7) VOTING.—Each member of the Commis5 sion shall be entitled to 1 vote, which shall be equal 

6 to the vote of every other member of the Commis7 sion. 

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

9 Members of the Commission shall serve without 

10 compensation, but shall be reimbursed for travel, 

11 subsistence, and other necessary expenses incurred 

12 in the performance of their duties as members of the 

13 Commission. 

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

15 the following functions: 

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

17 Commission shall collect such information and make 

18 such determinations as may be necessary to deter19 mine, for purposes of section 257(d), whether child 

20 care and development facilities comply, or will be in 

21 compliance within 12 months, with—

22 ‘‘(A) any laws, standards, and require23 ments applicable to such facilities under the 

24 laws of the State, municipality, or other unit of 
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1 general local government in which the facility is 

2 or is to be located, and 

3 ‘‘(B) after the effective date of the stand4 ards and requirements established under para5 graph (2), such standards and requirements, 

6 and shall issue certifications of such compliance. 

7 ‘‘(2) ESTABLISHMENT OF STANDARDS.—

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

9 after the date on which appointment of initial 

10 membership of the Commission is completed, 

11 the Commission, in consultation with the Sec12 retary of Housing and Urban Development and 

13 the Secretary of Health and Human Services, 

14 shall conduct a study to determine the laws, 

15 standards, and requirements referred to in 

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

17 State. Taking into consideration the findings of 

18 the study, the Secretary shall establish stand19 ards and requirements regarding child care and 

20 development facilities that are designed to en21 sure that mortgage insurance is provided under 

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

23 clean, and healthy facilities that provide appro24 priate care and development services for chil25 dren. 
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1 ‘‘(B) PUBLICATION.—The Commission 

2 shall issue regulations providing for the stand3 ards and requirements established under sub4 paragraph (A) to take effect, for purposes of 

5 sections 257(d)(2) and 223(h)(2)(B) and para6 graph (1)(B) of this section, not later than 18 

7 months after the date of the enactment of this 

8 section. 

9 ‘‘(3) SMALL PURPOSE LOANS.—The Commis10 sion shall, to the extent amounts are made available 

11 for such purpose pursuant to subsection (i) and 

12 qualified requests are received, make loans, directly 

13 or indirectly to providers of child care and develop14 ment facilities for reconstruction or renovation of 

15 such facilities, subject to the following requirements: 

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

17 made only for such facilities that are financially 

18 and operationally viable, as determined under 

19 standards and guidelines to be established by 

20 the Commission. 

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

22 under this paragraph to a single borrower may 

23 not exceed $50,000. 

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

25 may not have a term exceeding 15 years. 
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1 ‘‘(D) Loans under this paragraph shall 

2 bear interest at rates and be made under such 

3 other conditions and terms as the Commission 

4 shall provide. 

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

6 take such actions as may be necessary to publicize 

7 the availability of the programs for mortgage insur8 ance under sections 257 and 223(h) and loans under 

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

10 ensures that information concerning such programs 

11 will be available to child care providers throughout 

12 the United States. 

13 ‘‘(5) TECHNICAL ASSISTANCE.—The Commis14 sion shall make available, to mortgagors of mort15 gages insured under section 257 or 223(h) and to 

16 borrowers under paragraph (3) of this subsection, 

17 technical assistance and expertise in the business as18 pects of operating child care and development facili19 ties (including business planning and quality control 

20 assistance). The Commission shall provide such as21 sistance and expertise directly and in coordination 

22 with appropriate Federal agencies (including the De23 partment of Housing and Urban Development, the 

24 Department of Health and Human Services, the De-
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1 partment of Defense, and the Small Business Ad2 ministration), 

3 ‘‘(6) LIABILITY INSURANCE.—The Commission 

4 shall—

5 ‘‘(A) not later than 12 months after the 

6 date on which appointment of initial member7 ship of the Commission is completed—

8 ‘‘(i) establish standards and guide9 lines, applicable to mortgage insurance 

10 under sections 257 and 223(h) and loans 

11 under paragraph (3) of this subsection, 

12 that require child care providers operating 

13 child care and development facilities as14 sisted under such provisions to obtain and 

15 maintain liability insurance in such 

16 amounts and subject to such requirements 

17 as the Commission considers appropriate; 

18 and 

19 ‘‘(ii) submit a report to the Congress 

20 that analyzes the need for making financial 

21 and technical assistance available to such 

22 child care providers to identify and obtain 

23 liability insurance adequate to comply with 

24 such standards and guidelines, identifies 

25 appropriate methods of providing such as-
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1 sistance, sets forth a program for the Com2 mission to provide such technical assist3 ance, and makes recommendations for any 

4 legislation necessary to implement a pro5 gram to provide such appropriate financial 

6 assistance; and 

7 ‘‘(B) beginning not later than the effective 

8 date of the standards and guidelines established 

9 under subparagraph (A)(i), carry out the tech10 nical assistance program set forth in the report 

11 under subparagraph (A)(ii). 

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

13 12 months after the date of the enactment of this 

14 section, the Commission shall submit a report to the 

15 Congress recommending a plan for establishing and 

16 funding a foundation that is an entity independent 

17 of the Commission (but which maintains association 

18 with the Commission)—

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

20 ‘‘(i) to support research relating to 

21 child care and development facilities; 

22 ‘‘(ii) to fund pilot programs to test in23 novative methods for improving child care; 

24 and 
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1 ‘‘(iii) to engage in activities and pub2 lish materials to assist persons interested 

3 in mortgage insurance under sections 257 

4 and 223(h) and other assistance provided 

5 by the Commission; and 

6 ‘‘(B) which shall have the authority to ac7 cept, use, and dispose of gifts, bequests, or de8 vises of services or property, both real and per9 sonal, for the purpose of aiding or facilitating 

10 the work of the foundation. 

11 ‘‘(8) STUDY REGARDING CAPITAL NEEDS OF

12 CENTER-BASED CHILD CARE IN LOW-INCOME COM13 MUNITIES.—The Commission shall provide for the 

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

15 families in low-income communities and neighbor16 hoods that—

17 ‘‘(A) determines the existing supply and 

18 quality of such care in such areas; 

19 ‘‘(B) identifies the economic and other 

20 market barriers in such areas to—

21 ‘‘(i) creating an adequate supply of 

22 center-based child care services; and 

23 ‘‘(ii) achieving a quality standard in 

24 child care centers adequate to support 

25 early childhood programs; and 
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1 ‘‘(C) proposes public policy and private 

2 sector initiatives that might be taken to ensure 

3 that such areas have—

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

5 care facilities sufficient for child care needs 

6 of the areas and to facilitate employment 

7 and support the goals of welfare reform; 

8 ‘‘(ii) appropriate child care choices; 

9 and 

10 ‘‘(iii) sufficient quality of care nec11 essary to prepare at-risk children for 

12 school. 

13 The Commission shall submit to the Congress a re14 port regarding the results of the study conducted 

15 under this section not later than the expiration of 

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

17 appointment of the executive director pursuant to 

18 subsection (f)(1). 

19 ‘‘(d) NONDISCRIMINATION REQUIREMENT.—

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

21 certify under subsection (c)(1) or carry out any ac22 tivities of the Commission with respect to any child 

23 care and development facility if the provider of the 

24 facility discriminates on account of race, color, reli25 gion (subject to paragraph (2)), national origin, sex 
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1 (to the extent provided in title IX of the Education 

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

3 handicapping condition. 

4 ‘‘(2) FACILITIES OF RELIGIOUS ORGANIZA5 TIONS.—The prohibition with respect to religion 

6 shall not apply to a child care and development facil7 ity which is controlled by or which is closely identi8 fied with the tenets of a particular religious organi9 zation if the application of this subsection would not 

10 be consistent with the religious tenets of such orga11 nization. 

12 ‘‘(3) CERTIFICATION.—As a condition of certifi13 cation under subsection (c)(1) and eligibility for a 

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

15 care and development facility shall certify to the 

16 Commission that the provider does not discriminate, 

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

18 this subsection. 

19 ‘‘(e) POWERS.—

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

21 The Commission may secure directly from any de22 partment or agency of the Federal Government such 

23 information as the Commission may require for car24 rying out its functions. Upon request of the Com-
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1 mission, any such department or agency shall fur2 nish such information. 

3 ‘‘(2) ASSISTANCE FROM GENERAL SERVICES

4 ADMINISTRATION.—The Administrator of General 

5 Services shall provide to the Commission, on a reim6 bursable basis, such administrative support services 

7 as the Commission may request. 

8 ‘‘(3) ASSISTANCE FROM DEPARTMENT OF

9 HOUSING AND URBAN DEVELOPMENT.—Upon the re10 quest of the Commission, the Secretary of Housing 

11 and Urban Development shall, to the extent possible 

12 and subject to the discretion of the Secretary, detail 

13 any of the personnel of the Department of Housing 

14 and Urban Development, on a nonreimbursable 

15 basis, to assist the Commission in carrying out its 

16 functions under this section. 

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

18 United States mails in the same manner and under 

19 the same conditions as other Federal agencies. 

20 ‘‘(f) STAFF.—

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

22 shall appoint an executive director, who shall be 

23 compensated at a rate fixed by the Commission, but 

24 which shall not exceed the rate established for level 
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1 I of the Executive Schedule under title 5, United 

2 States Code. 

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

4 executive director, the Commission may appoint and 

5 fix the compensation of such personnel as the Com6 mission considers necessary, in accordance with the 

7 provisions of title 5, United States Code, governing 

8 appointments to the competitive service, and the 

9 provisions of chapter 51 and subchapter III of chap10 ter 53 of such title, relating to classification and 

11 General Schedule pay rates. 

12 ‘‘(g) REPORTS.—Not later than March 31 of each 

13 year, the Commission shall submit a report to the Presi14 dent and the Congress regarding the operations and activi15 ties of the Commission during the preceding calendar year. 

16 Each annual report shall include a copy of the Commis17 sion’s financial statements and such information and other 

18 evidence as is necessary to demonstrate that the activities 

19 of the Commission during the year for which the report 

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

21 Congress and President at such other times as the Com22 mission deems desirable. 

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

24 terms defined in section 257(j) shall have the same mean25 ings as provided under such section. 
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1 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to the Commission to 

3 carry out this section $20,000,000 for fiscal year 2005, 

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

5 $2,500,000 shall be available for administrative costs of 

6 the Commission and the remainder of which shall be avail7 able only for loans under subsection (c)(3).’’. 

8 SEC. 6. STUDY OF AVAILABILITY OF SECONDARY MARKETS 

9 FOR MORTGAGES ON CHILD CARE FACILI10 TIES. 

11 The Secretary of the Treasury shall conduct a study 

12 of the secondary mortgage markets to determine—

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 and development facilities or would lower 

20 development costs of such facilities; and 

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

22 activities to provide credit enhancement for child 

23 care and development facilities loans is needed to 

24 meet the demand for such facilities. 
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1 The Secretary of the Treasury shall submit to the Con2 gress a report regarding the results of the study conducted 

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

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

5 Act.

Æ