SEC. 244. INSURANCE FOR MORTGAGES FOR ACQUISITION 
OR REFINANCING DEBT OF EXISTING CHILD 
CARE FACILITIES. 
(a) IN GENERAL.—Section 223 of the National 
Housing Act (12 U.S.C. 1715n) is amended by adding at 
the end the following: 
‘‘(h) MORTGAGE INSURANCE FOR PURCHASE OR RE-
FINANCING OF EXISTING CHILD CARE FACILITIES.— 
‘‘(1) DEFINITIONS.—In this subsection, the 
terms that are defined in section 257(a) have the 
same meanings as in that section. 
‘‘(2) AUTHORITY.—Notwithstanding any other 
provision of this Act, the Secretary may insure 
under any section of this title a mortgage executed 
in connection with— 
‘‘(A) the purchase or refinancing of an ex-
isting child care facility; 
‘‘(B) the purchase of a structure to serve 
as a child care facility; or 
‘‘(C) the refinancing of existing debt of an 
existing child care facility. 
‘‘(3) PURCHASE OF EXISTING FACILITIES AND 
STRUCTURES.—In the case of the purchase under 
this subsection of an existing child care facility or 
purchase of an existing structure to serve as such a 
facility, the Secretary shall prescribe any terms and
conditions that the Secretary considers necessary to 
ensure that— 
‘‘(A) the facility or structure purchased 
continues to be used as a child care facility; and 
‘‘(B) the facility receives a certification of 
compliance under section 258(c). 
‘‘(4) REFINANCING OF EXISTING FACILITIES.— 
In the case of refinancing of an existing child care 
facility, the Secretary shall prescribe any terms and 
conditions that the Secretary considers necessary to 
ensure that— 
‘‘(A) the refinancing is used to lower the 
monthly debt service costs (taking into account 
any fees or charges connected with such refi-
nancing) of the existing facility; 
‘‘(B) the proceeds of any refinancing will 
be employed only to retire the existing indebted-
ness and pay the necessary cost of refinancing 
on the existing facility; 
‘‘(C) the existing facility is economically 
viable; and 
‘‘(D) the facility receives a certification of 
compliance under section 258(c). 
‘‘(5) LIMITATION ON INSURANCE AUTHORITY.— 
The authority of the Secretary to enter into commit-
ments to insure mortgages under this subsection is 
subject to section 257(f).’’. 
SEC. 245. STUDY OF AVAILABILITY OF SECONDARY MAR-
KETS FOR MORTGAGES ON CHILD CARE FA-
CILITIES. 
(a) STUDY.—The Secretary of the Treasury shall 
conduct a study of the secondary mortgage markets to de-
termine— 
(1) whether such a market exists for purchase 
of mortgages eligible for insurance under sections 
223(h) and 257 of the National Housing Act (as 
added by this subtitle); 
(2) whether such a market would affect the 
availability of credit available for development of 
child care facilities or would lower development costs 
of such facilities; and 
(3) the extent to which such a market or other 
activities to provide credit enhancement for loans for 
child care facilities is needed to meet the demand for 
such facilities. 
(b) REPORT.—Not later than 2 years after the date 
of enactment of this Act, the Secretary of the Treasury 
shall submit to Congress a report regarding the results 
of the study conducted under this section.
SEC. 
246. 
TECHNICAL 
AND 
FINANCIAL 
ASSISTANCE 
GRANTS. 
(a) DEFINITIONS.—In this section: 
(1) CHILD CARE FACILITY.—The term ‘‘child 
care facility’’ has the meaning given that term in 
section 257(a) of the National Housing Act, as 
added by section 243 of this Act. 
(2) ELIGIBLE INTERMEDIARY.—The term ‘‘eli-
gible intermediary’’ means a intermediary organiza-
tion that— 
(A) is described in section 501(c)(3) of the 
Internal Revenue Code of 1986; 
(B) is exempt from taxation under section 
501(a) of such Code; and 
(C) has demonstrated experience in— 
(i) financing the construction and ren-
ovation of physical facilities; 
(ii) providing technical and financial 
assistance to child care providers or other 
similar entities; 
(iii) working with businesses (whether 
small or large); and 
(iv) securing private sources for cap-
ital financing; and 
(3) ELIGIBLE RECIPIENT.—The term ‘‘eligible 
recipient’’ means any—
(A) existing or start-up center-based or 
home-based child care provider; and 
(B) organization in the process of estab-
lishing a center-based or home-based child care 
program or otherwise seeking to provide child 
care services. 
(4) EQUIPMENT.—The term ‘‘equipment’’ has 
the meaning given that term in section 257(a) of the 
National Housing Act, as added by section 243 of 
this Act. 
(b) GRANT AUTHORITY.—The Secretary of Housing 
and Urban Development, in consultation with the Sec-
retary of Health and Human Services, may award grants 
on a competitive basis in accordance with this section to 
eligible intermediaries for use in accordance with sub-
sections (e) and (f). 
(c) APPLICATIONS.—To be eligible to receive a grant 
under this section an eligible intermediary shall submit to 
the Secretary an application, in such form and containing 
such information as the Secretary may require. 
(d) PRIORITY.—In awarding grants under this sec-
tion the Secretary shall give a priority to applicants under 
subsection (c) that serve low-income or rural areas. 
(e) USE OF FUNDS.—
(1) REVOLVING
LOAN
FUND.—Each eligible 
intermediary that receives a grant under this section 
shall deposit the grant amount into a child care re-
volving loan fund established by the eligible inter-
mediary. 
(2) ELIGIBLE
ASSISTANCE.—Subject to sub-
section (f), from amounts deposited into the revolv-
ing loan fund under paragraph (1), each eligible 
intermediary shall provide to eligible recipients— 
(A) financial assistance (in the form of 
loans, grants, investments, guarantees, interest 
subsidies, and other appropriate forms of assist-
ance) for the construction of new child care fa-
cilities, child care facility planning, and acquisi-
tion or improvement of child care facilities or 
equipment; and 
(B) technical assistance in obtaining public 
or private financing for such construction, plan-
ning, acquisition, and improvement, including 
developing and implementing financing re-
sources, options, and plans for such eligible re-
cipients. 
(3) LOAN REPAYMENTS AND INVESTMENT PRO-
CEEDS.—Any amount received by an eligible inter-
mediary from an eligible recipient in the form of
loan principal repayment or investment proceeds 
shall be deposited into the child care revolving fund 
of the eligible intermediary for redistribution to 
other eligible recipients in accordance with this sec-
tion. 
(f) ALLOCATION OF FUNDS.—Of the amounts dis-
tributed from the revolving loan fund of an eligible inter-
mediary under subsection (e)(2) in each fiscal year— 
(1) not less than 50 percent shall be used for 
financial assistance pursuant to subparagraph (A) of 
subsection (e)(2), except that the amount made 
available to any eligible recipient under this para-
graph may not exceed 40 percent of the total costs 
incurred by that eligible recipient in connection with 
the construction, planning, acquisition, or improve-
ment assisted; and 
(2) the amount remaining after distribution 
under paragraph (1), shall be used to provide tech-
nical assistance pursuant to subparagraph (B) of 
subsection (e)(2). 
(g) DAVIS BACON ACT.—The Act of March 3, 1931 
(popularly known as the Davis-Bacon Act) shall apply to 
actions taken under this section.
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$10,000,000 for each of fiscal years 2006 through 2010. 
Subtitle D—Business Child Care 
Incentive Grant Program 
SEC. 251. BUSINESS CHILD CARE INCENTIVE GRANT PRO-
GRAM. 
(a) ESTABLISHMENT.—The Secretary of Health and 
Human Services (referred to in this section as the ‘‘Sec-
retary’’) shall establish a program to award grants to 
States, on a competitive basis, to assist States in providing 
funds to encourage the establishment and operation of em-
ployer operated child care programs. 
(b) APPLICATION.—To be eligible to receive a grant 
under this section, a State shall prepare and submit to 
the Secretary an application at such time, in such manner, 
and containing such information as the Secretary may re-
quire, including an assurance that the funds required 
under subsection (e) will be provided. 
(c) AMOUNT OF GRANT.—The Secretary shall deter-
mine the amount of a grant to a State under this section 
based on the population of children less than 5 years of 
age in the State as compared to the population of all 
States receiving grants under this section. 
(d) USE OF FUNDS.—
(1) IN GENERAL.—A State shall use amounts 
provided under a grant awarded under this section 
to provide assistance to businesses located in the 
State to enable the businesses to establish and oper-
ate child care programs. Such assistance may in-
clude— 
(A) technical assistance in the establish-
ment of a child care program; 
(B) assistance for the startup costs related 
to a child care program; 
(C) assistance for the training of child care 
providers; 
(D) scholarships for low-income wage earn-
ers; 
(E) the provision of services to care for 
sick children or to provide care to school aged 
children; 
(F) the entering into of contracts with 
local resource and referral or local health de-
partments; 
(G) assistance for care for children with 
disabilities; or 
(H) assistance for any other activity deter-
mined appropriate by the State.
(2) APPLICATION.—To be eligible to receive as-
sistance from a State under this section, a business 
shall prepare and submit to the State an application 
at such time, in such manner, and containing such 
information as the State may require. 
(3) PREFERENCE.— 
(A) IN GENERAL.—In providing assistance 
under this section, a State shall give priority to 
applicants that desire to form a consortium to 
provide child care in a geographic area within 
the State where such care is not generally avail-
able or accessible. 
(B) CONSORTIUM.—For purposes of sub-
paragraph (A), a consortium shall be made up 
of 2 or more entities that may include busi-
nesses, nonprofit agencies or organizations, 
local governments, or other appropriate entities. 
(4) LIMITATION.—With respect to grant funds 
received under this section, a State may not provide 
in excess of $100,000 in assistance from such funds 
to any single applicant. 
(e) MATCHING REQUIREMENT.—To be eligible to re-
ceive a grant under this section a State shall provide as-
surances to the Secretary that, with respect to the costs 
to be incurred by an entity receiving assistance in carrying
out activities under this section, the entity will make avail-
able (directly or through donations from public or private 
entities) non-Federal contributions to such costs in an 
amount equal to— 
(1) for the first fiscal year in which the entity 
receives such assistance, not less than 50 percent of 
such costs ($1 for each $1 of assistance provided to 
the entity under the grant); 
(2) for the second fiscal year in which the enti-
ty receives such assistance, not less than 662⁄3 per-
cent of such costs ($2 for each $1 of assistance pro-
vided to the entity under the grant); and 
(3) for the third fiscal year in which the entity 
receives such assistance, not less than 75 percent of 
such costs ($3 for each $1 of assistance provided to 
the entity under the grant). 
(f) REQUIREMENTS OF PROVIDERS.—To be eligible 
to receive assistance under a grant awarded under this 
section a child care provider shall comply with all applica-
ble State and local licensing and regulatory requirements 
and all applicable health and safety standards in effect 
in the State. 
(g) ADMINISTRATION.— 
(1) STATE
RESPONSIBILITY.—A State shall 
have responsibility for administering a grant award-