‘‘(i) CERTIFICATION.—For each fiscal
year after fiscal year 2003, certify that dur-
ing the then preceding fiscal year the State
was in compliance with section 658G and
describe how funds were used to comply
with such section during such preceding fis-
cal year.
‘‘(ii) STRATEGY.—For each fiscal year
after fiscal year 2003, contain an outline of
the strategy the State will implement dur-
ing such fiscal year for which the State
plan is submitted, to address the quality of
child care services in child care settings that
provide services for which assistance is
made available under this subchapter, and
include in such strategy—
‘‘(I) a statement specifying how
the State will address the activities de-
scribed in paragraphs (1), (2), and (3)
of section 658G;
‘‘(II) a description of quantifiable,
objective measures for evaluating the
quality of child care services separately
with respect to the activities listed in
each of such paragraphs that the State
will use to evaluate its progress in im-
proving the quality of such child care
services;
‘‘(III) a list of State-developed
child care service quality targets for
such fiscal year quantified on the basis
of such measures; and
‘‘(IV) for each fiscal year after fis-
cal year 2003, a report on the progress
made to achieve such targets during
the then preceding fiscal year.
‘‘(iii) RULE OF CONSTRUCTION.—Noth-
ing in this subparagraph shall be construed
to require that the State apply measures for
evaluating quality to specific types of child
care providers.
‘‘(L) ACCESS TO CARE FOR CERTAIN POPU-
LATIONS.—Demonstrate how the State is ad-
dressing the child care needs of parents eligible
for child care services for which financial assist-
ance is provided under this subchapter who have
children with special needs, work nontraditional
hours, or require child care services for infants
or toddlers.’’.
SEC. 205. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD
CARE.
Section 658G of the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858e) is amended to read
as follows:
‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF
CHILD CARE SERVICES.
‘‘A State that receives funds to carry out this sub-
chapter for a fiscal year, shall use not less than 6 percent
of the amount of such funds for activities provided through
resource and referral services or other means, that are de-
signed to improve the quality of child care services for
which financial assistance is made available under this sub-
chapter. Such activities include—
‘‘(1) programs that provide training, education,
and other professional development activities to en-
hance the skills of the child care workforce, including
training opportunities for caregivers in informal care
settings;
‘‘(2) activities within child care settings to en-
hance early learning for young children, to promote
early literacy, and to foster school readiness;
‘‘(3) initiatives to increase the retention and
compensation of child care providers, including tiered
reimbursement rates for providers that meet quality
standards as defined by the State; or
‘‘(4) other activities deemed by the State to im-
prove the quality of child care services provided in
such State.’’.
SEC. 206. DEFINITIONS.
Section 658P(4)(B) of the Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) is
amended by striking ‘‘85 percent of the State median in-
come’’ and inserting ‘‘income levels as established by the
State, prioritized by need,’’.
TITLE III—BROADENED WAIVER
AUTHORITY
SEC. 
301. 
PROGRAM 
INTEGRATION 
DEMONSTRATION
PROJECTS.
(a) PURPOSE.—The purpose of this section is to estab-
lish a program of demonstration projects in a State or por-
tion of a State to integrate multiple public assistance, work-
force development, and other programs, for the purpose of
supporting working individuals and families, helping fami-
lies escape welfare dependency, promoting child well-being,
or helping build stronger families, using innovative ap-
proaches to strengthen service systems and provide more co-
ordinated and effective service delivery.
(b) DEFINITIONS.—In this section:
(1) ADMINISTERING SECRETARY.—The term ‘‘ad-
ministering Secretary’’ means, with respect to a
qualified program, the head of the Federal agency re-
sponsible for administering the program.
(2) QUALIFIED PROGRAM.—The term ‘‘qualified
program’’ means—
(A) a demonstration project authorized
under section 505 of the Family Support Act of
1988;
(B) activities funded under the Wagner-
Peyser Act;
(C) activities funded under the Adult Edu-
cation and Family Literacy Act; or
(D) activities funded under the Child Care
and Development Block Grant Act of 1990;
(c) APPLICATION REQUIREMENTS.—The head of a
State or sub-State entity administering 2 or more qualified
programs proposed to be included in a demonstration
project under this section shall (or, if the project is proposed
to include qualified programs administered by 2 or more
such entities, the heads of the administering entities (each
of whom shall be considered an applicant for purposes of
this section) shall jointly) submit to the administering Sec-
retary of each such program an application that contains
the following:
(1) PROGRAMS INCLUDED.—A statement identi-
fying each qualified program to be included in the
project, and describing how the purposes of each such
program will be achieved by the project.
(2) POPULATION SERVED.—A statement identi-
fying the population to be served by the project and
specifying the eligibility criteria to be used.
(3) DESCRIPTION
AND
JUSTIFICATION.—A de-
tailed description of the project, including—
(A) a description of how the project is ex-
pected to improve or enhance achievement of the
purposes of the programs to be included in the
project, from the standpoint of quality, of cost-
effectiveness, or of both; and
(B) a description of the performance objec-
tives for the project, including any proposed
modifications to the performance measures and
reporting requirements used in the programs.
(4) WAIVERS REQUESTED.—A description of the
statutory and regulatory requirements with respect to
which a waiver is requested in order to carry out the
project, and a justification of the need for each such
waiver.
(5) COST NEUTRALITY.—Such information and
assurances as necessary to establish to the satisfaction
of the administering Secretary, in consultation with
the Director of the Office of Management and Budget,
that the proposed project is reasonably expected to
meet the applicable cost neutrality requirements of
subsection (d)(4).
(6) EVALUATION AND REPORTS.—An assurance
that the applicant will conduct ongoing and final
evaluations of the project, and make interim and
final reports to the administering Secretary, at such
times and in such manner as the administering Sec-
retary may require.
(7) OTHER
INFORMATION
AND
ASSURANCES.—
Such other information and assurances as the admin-
istering Secretary may require.
(d) APPROVAL OF APPLICATIONS.—
(1) IN GENERAL.—The administering Secretary
with respect to a qualified program that is identified
in an application submitted pursuant to subsection
(c) may approve the application and, except as pro-
vided in paragraph (2), waive any requirement ap-
plicable to the program, to the extent consistent with
this section and necessary and appropriate for the
conduct of the demonstration project proposed in the
application, if the administering Secretary deter-
mines that the project—
(A) has a reasonable likelihood of achieving
the objectives of the programs to be included in
the project;
(B) may reasonably be expected to meet the
applicable cost neutrality requirements of para-
graph (4), as determined by the Director of the
Office of Management and Budget; and
(C) integrates 2 or more qualified pro-
grams.
(2) PROVISIONS EXCLUDED FROM WAIVER AU-
THORITY.—A waiver shall not be granted under para-
graph (1) of this subsection with respect to—
(A) any provision of law relating to—
(i) civil rights or prohibition of dis-
crimination;
(ii) purposes or goals of any program;
(iii) maintenance of effort require-
ments;
(iv) health or safety;
(v) labor standards under the Fair
Labor Standards Act of 1938; or
(vi) environmental protection;
(B) section 241(a) of the Adult Education
and Family Literacy Act; or
(C) any requirement that a State pass
through to a sub-State entity part or all of an
amount paid to the State.
(3) AGREEMENT OF EACH ADMINISTERING SEC-
RETARY REQUIRED.—
(A) IN GENERAL.—An applicant may not
conduct a demonstration project under this sec-
tion unless each administering Secretary with
respect to any program proposed to be included
in the project has approved the application to
conduct the project.
(B) AGREEMENT WITH RESPECT TO FUND-
ING
AND
IMPLEMENTATION.—Before approving
an application to conduct a demonstration
project under this section, an administering Sec-
retary shall have in place an agreement with the
applicant with respect to the payment of funds
and responsibilities required of the admin-
istering Secretary with respect to the project.
(4) COST-NEUTRALITY REQUIREMENTS.—
(A) GENERAL RULE.—Notwithstanding any
other provision of law (except subparagraph
(B)), the total of the amounts that may be paid
by the Federal Government for a fiscal year with
respect to the programs affected by a demonstra-
tion project conducted under this section shall
not exceed the estimated total amount that the
Federal Government would have paid for the fis-
cal year with respect to the programs if the
project had not been conducted, as determined by
the Director of the Office of Management and
Budget.
(B) SPECIAL RULE.—If an applicant sub-
mits to the Director of the Office of Management
and Budget a request to apply the rules of this
subparagraph to the programs affected by a dem-
onstration project proposed in the application
submitted pursuant to this section, during such
period of not more than 5 consecutive fiscal
years in which the project is in effect, and the
Director determines, on the basis of supporting
information provided by the applicant, to grant
the request, then, notwithstanding any other pro-
vision of law, the total of the amounts that may
be paid by the Federal Government for the pe-
riod with respect to the programs shall not ex-
ceed the estimated total amount that the Federal
Government would have paid for the period with
respect to the programs if the project had not
been conducted.
(e) DURATION
OF
PROJECTS.—A demonstration
project under this section may be approved for a term of
not more than 5 years, and may be renewed for 1 or more
additional terms of not more than 5 years.
(f) REPORTS
TO CONGRESS.—Each administering
Secretary shall provide annually to the Congress a report
concerning demonstration projects approved under this sec-
tion, including—
(1) the projects approved for each applicant;
(2) the number of waivers granted under this
section, and the specific statutory provisions waived;
and
(3) how well each project for which a waiver is
granted is improving or enhancing program achieve-
ment from the standpoint of quality, cost-effectiveness,
or both;
(4) how well each project for which a waiver is
granted is meeting the performance objectives speci-
fied in subsection (c)(3)(B);
(5) how each project for which a waiver is grant-
ed is conforming with the cost-neutrality requirements
of subsection (d)(4); and
(6) to the extent the administering Secretary
deems appropriate, recommendations for modification
of programs based on outcomes of the projects.