the States, as determined annually by the Depart-
ment of Agriculture. 
(4) ALLOTMENT PERCENTAGE.— 
(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 
(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-
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.— 
(A) REDUCTION.—The amount of any re-
allotment to which a State is entitled under this 
subsection shall be reduced to the extent that 
such amount exceeds the amount that the Sec-
retary estimates will be distributed to the State 
to carry out corresponding activities under this 
subtitle. 
(B) REALLOTMENTS.—The amount of 
such reduction shall be reallotted to States for 
which no reduction in a corresponding allot-
ment, or in a corresponding reallotment, is re-
quired by this subsection, in proportion to the 
original corresponding allotments made under 
subsection (b) to such States for such fiscal 
year. 
(3) AMOUNTS REALLOTTED.—For purposes of 
this subtitle (other than this subsection and sub-
section (b)), any amount reallotted to a State under 
this subsection shall be considered to be part of the 
corresponding allotment made under subsection (b) 
to the State.
(4) INDIAN
TRIBES
OR
TRIBAL
ORGANIZA-
TIONS.—Any portion of a grant or contract made to 
an Indian tribe or tribal organization under sub-
section (c) that the Secretary determines is not 
being used in a manner consistent with the provi-
sions of this subtitle in the period for which the 
grant or contract is made available, shall be used by 
the Secretary to make payments to other tribes or 
organizations that have submitted applications under 
subsection (c) in accordance with their respective 
needs. 
(f) COST-SHARING.— 
(1) CHILD CARE PROVIDER DEVELOPMENT AND 
RETENTION GRANTS AND SCHOLARSHIPS.— 
(A) FEDERAL SHARE.—The Federal share 
of the cost of carrying out activities under sec-
tions 226 and 227, with funds allotted under 
this section and distributed by the Secretary to 
a State, shall be— 
(i) not more than 90 percent of the 
cost of each grant made under such sec-
tions, in the first fiscal year for which the 
State receives such funds; 
(ii) not more than 85 percent of the 
cost of each grant made under such sec-