section 4 of the Indian Self-Determination and Edu-
cation Assistance Act (25 U.S.C. 450b). 
SEC. 223. FUNDS FOR CHILD CARE PROVIDER DEVELOP-
MENT AND RETENTION GRANTS, SCHOLAR-
SHIPS, AND HEALTH BENEFITS COVERAGE. 
(a) IN GENERAL.—From amounts appropriated to 
carry out this subtitle, the Secretary may allot and dis-
tribute funds to eligible States, and make payments to In-
dian tribes and tribal organizations, to pay for the Federal 
share of the cost of carrying out activities under sections 
226, 227, and 228 for eligible child care providers. 
(b) ALLOTMENTS.—The funds shall be allotted and 
distributed, and the payments shall be made, by the Sec-
retary in accordance with section 224, and expended by 
the States (directly, or at the option of the States, through 
units of general purpose local government), and by Indian 
tribes and tribal organizations, in accordance with this 
subtitle. 
SEC. 224. ALLOTMENTS TO STATES. 
(a) AMOUNTS RESERVED.— 
(1) TERRITORIES AND POSSESSIONS.—The Sec-
retary shall reserve not more than 1⁄2 of 1 percent 
of the funds appropriated under section 231(a), and 
not more than 1⁄2 of 1 percent of the funds appro-
priated under section 232(b), for any fiscal year for 
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payments to the Virgin Islands of the United States, 
Guam, American Samoa, and the Commonwealth of 
the Northern Mariana Islands, to be allotted in ac-
cordance with their respective needs. 
(2) INDIAN
TRIBES
AND
TRIBAL
ORGANIZA-
TIONS.—The Secretary shall reserve not more than 
3 percent of the funds appropriated under section 
231(a), and not more than 3 percent of the funds 
appropriated under section 231(b), for any fiscal 
year for payments to Indian tribes and tribal organi-
zations with applications approved under subsection 
(c). 
(b) ALLOTMENTS TO REMAINING STATES.— 
(1) GENERAL
AUTHORITY.—From the funds 
appropriated under section 231(a) for any fiscal year 
and remaining after the reservations made under 
subsection (a), and from the funds appropriated 
under section 231(b) for any fiscal year and remain-
ing after the reservations made under subsection (a), 
the Secretary shall allot to each State an amount 
equal to the sum of— 
(A) an amount that bears the same ratio 
to 50 percent of the appropriate remainder as 
the product of the young child factor of the 
State and the allotment percentage of the State 
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bears to the sum of the corresponding products 
for all States; and 
(B) an amount that bears the same ratio 
to 50 percent of such remainder as the product 
of the school lunch factor of the State and the 
allotment percentage of the State bears to the 
sum of the corresponding products for all 
States. 
(2) YOUNG CHILD FACTOR.—In this subsection, 
the term ‘‘young child factor’’ means the ratio of the 
number of children under 5 years of age in the State 
to the number of such children in all the States, as 
determined according to the most recent annual esti-
mates of population in the States, as provided by the 
Bureau of the Census. 
(3) SCHOOL
LUNCH
FACTOR.—In this sub-
section, the term ‘‘school lunch factor’’ means the 
ratio of the number of children who are receiving 
free or reduced price lunches under the school lunch 
program established under the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751 et seq.) 
in the State to the number of such children in all 
the States, as determined annually by the Depart-
ment of Agriculture. 
(4) ALLOTMENT PERCENTAGE.— 
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(A) IN GENERAL.—Except as provided in 
subparagraph (B), for purposes of this sub-
section, the allotment percentage for a State 
shall be determined by dividing the per capita 
income of all individuals in the United States, 
by the per capita income of all individuals in 
the State. 
(B) LIMITATIONS.—For purposes of this 
subsection, if an allotment percentage deter-
mined under subparagraph (A)— 
(i) is more than 1.2 percent, the allot-
ment percentage of that State shall be con-
sidered to be 1.2 percent; and 
(ii) is less than 0.8 percent, the allot-
ment percentage of the State shall be con-
sidered to be 0.8 percent. 
(C) PER CAPITA INCOME.—For purposes 
of subparagraph (A), per capita income shall 
be— 
(i) determined at 2-year intervals; 
(ii) applied for the 2-year period be-
ginning on October 1 of the first fiscal 
year beginning after the date such deter-
mination is made; and 
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(iii) equal to the average of the an-
nual per capita incomes for the most re-
cent period of 3 consecutive years for 
which satisfactory data are available from 
the Department of Commerce at the time 
such determination is made. 
(c) PAYMENTS TO INDIAN TRIBES AND TRIBAL OR-
GANIZATIONS.— 
(1) RESERVATION OF FUNDS.—From amounts 
reserved under subsection (a)(2), the Secretary may 
make grants to or enter into contracts with Indian 
tribes and tribal organizations that submit applica-
tions under this subsection, to plan and carry out 
programs and activities— 
(A) to encourage child care providers to 
improve their qualifications; 
(B) to retain qualified child care providers 
in the child care field; and 
(C) to provide health benefits coverage for 
child care providers. 
(2) APPLICATIONS
AND
REQUIREMENTS.—To 
be eligible to receive a grant or contract under this 
subsection, an Indian tribe or tribal organization 
shall submit an application to the Secretary at such 
time, in such manner, and containing such informa-
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tion as the Secretary may require. The application 
shall provide that the applicant— 
(A) will coordinate the programs and ac-
tivities involved, to the maximum extent prac-
ticable, with the lead agency in each State in 
which the applicant will carry out such pro-
grams and activities; and 
(B) will make such reports on, and conduct 
such audits of the funds made available through 
the grant or contract for, programs and activi-
ties under this subtitle as the Secretary may re-
quire. 
(d) DATA AND INFORMATION.—The Secretary shall 
obtain from each appropriate Federal agency, the most re-
cent data and information necessary to determine the al-
lotments provided for in subsection (b). 
(e) REALLOTMENTS.— 
(1) IN GENERAL.—Any portion of an allotment 
under subsection (b) to a State for a fiscal year that 
the Secretary determines will not be distributed to 
the State for such fiscal year shall be reallotted by 
the Secretary to other States in proportion to the 
original corresponding allotments made under such 
subsection to such States for such fiscal year. 
(2) LIMITATIONS.— 
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