No funds reserved under this paragraph or para-
graph (3) may be combined with funds appropriated 
under any other Act if the purpose of combining 
funds is to make a single discretionary grant or a 
single discretionary payment, unless such funds ap-
propriated under this subchapter are separately 
identified in such grant or payment and are used for 
the purposes of this subchapter. 
‘‘(3) QUALITY IMPROVEMENT FUNDS.—
‘‘(A) DETERMINATION OF FUNDS.—
‘‘(i) For each of the fiscal years 2008 
through 2012, to provide assistance for ac-
tivities specified in subparagraph (B), the 
Secretary shall reserve, from the amount 
(if any) by which the funds appropriated 
under section 639(a) for a fiscal year ex-
ceed the adjusted prior year appropriation, 
a share equal to the sum of—
‘‘(I) 60 percent of such excess 
amount; and 
‘‘(II) any additional part of such 
excess amount the Secretary may find 
necessary to address a demonstrated 
need for such activities.
‘‘(ii) As used in clause (i), the term 
‘adjusted prior year appropriation’ means, 
with respect to a fiscal year, the amount 
appropriated under section 639(a) for the 
preceding fiscal year, adjusted to reflect 
the percentage change in the Consumer 
Price Index for All Urban Consumers 
(issued by the Bureau of Labor Statistics) 
during such preceding fiscal year. 
‘‘(B) 
QUALITY
IMPROVEMENT
ACTIVI-
TIES.—Funds reserved under this paragraph 
shall be used to carry out the following activi-
ties: 
‘‘(i) Not less than one-fourth of the 
amount reserved under this paragraph, to 
improve the compensation, salary scales, 
and benefit standards of educational staff, 
family service workers, and child coun-
selors, as described in sections 644(a) and 
653, to ensure that salary levels and bene-
fits are adequate to attract and retain 
qualified staff for such programs. 
‘‘(ii) Providing on-going professional 
development to teachers that improves 
their understanding of child development,
content knowledge, and appropriate teach-
ing strategies needed to provide effective 
instruction and other school readiness serv-
ices in the areas of early language and lit-
eracy, early mathematics, cognitive skills, 
approaches to learning, creative arts, 
science, physical health and development, 
and social and emotional development. 
‘‘(iii) Improving the qualifications and 
skills of educational personnel to meet the 
professional standards established under 
section 648A(a)(1), including providing as-
sistance to complete postsecondary course 
work, subject to section 648A(a)(2)(D). 
‘‘(iv) Ensuring that the physical envi-
ronments of Head Start programs are con-
ducive to providing effective program serv-
ices to children and families, and are ac-
cessible to children with disabilities and 
other individuals with disabilities. 
‘‘(v) Employing additional qualified 
classroom staff necessary to reduce the 
child to teacher ratio in the classroom and 
family to staff ratio for family services 
workers.
‘‘(vi) Ensuring that such programs 
have qualified staff that can promote lan-
guage skills and literacy growth of children 
and that can provide children with a vari-
ety of skills that have been identified, 
through scientifically based reading re-
search, as predictive of later reading 
achievement. 
‘‘(vii) Increasing hours of program op-
eration, including—
‘‘(I) conversion of part-day to 
full-day; and 
‘‘(II) number of weeks operated 
in a calendar year. 
‘‘(viii) Improving the compensation 
and benefits of staff of Head Start agen-
cies in order to improve the quality of 
Head Start programs. 
‘‘(ix) Transportation costs associated 
with transporting Head Start children 
safely, except that—
‘‘(I) no more than ten percent of 
funds under this paragraph may be 
used for such purposes;
‘‘(II) a Head Start agency shall 
demonstrate efforts to leverage the 
costs of transportation through col-
laboration with other entities; and 
‘‘(III) a Head Start agency shall 
submit information to the Secretary 
describing how such use of funds is 
necessary to prevent reduction or ter-
mination of transportation services or, 
in the case of a Head Start agency 
serving a rural community, how such 
use of funds is necessary to improve 
services to such community. 
‘‘(C) ALLOCATION.—
‘‘(i) Funds reserved under subpara-
graph (A) shall be allotted by the Sec-
retary as follows: 
‘‘(I) 80 percent of such funds 
shall be allotted among the States in 
the same proportion as the Secretary 
allots funds among the States under 
paragraph (4) for the respective fiscal 
year. 
‘‘(II) 20 percent of such funds 
shall be allotted among the States,