(3) if the project will expand on State and pri-
vate systems of wage replacement for eligible indi-
viduals, information on the manner in which the 
project will expand on the systems; and 
(4) information demonstrating the manner in 
which the wage replacement assistance provided 
through the project will assist families in which an 
individual takes leave or is absent from employment 
as described in subsection (d)(2). 
(f) SELECTION CRITERIA.—In selecting entities to re-
ceive grants for projects under this section, the Secretary 
shall—
(1) take into consideration—
(A) the scope of the proposed projects; 
(B) the cost-effectiveness, feasibility, and 
financial soundness of the proposed projects;
(C) the extent to which the proposed 
projects would expand access to wage replace-
ment in response to family caregiving needs, 
particularly for low-wage employees, in the area 
served by the grant; and 
(D) the benefits that would be offered to 
families and children through the proposed 
projects; and
(2) to the extent feasible, select entities pro-
posing projects that utilize diverse mechanisms, in-
cluding expansion of State unemployment compensa-
tion benefit programs, and establishment or expan-
sion of State temporary disability insurance pro-
grams, to provide the wage replacement. 
(g) FEDERAL SHARE.—
(1) IN GENERAL.—The Federal share of the 
cost described in subsection (a) shall be—
(A) 50 percent for the first year of the 
grant period; 
(B) 40 percent for the second year of that 
period; 
(C) 30 percent for the third year of that 
period; and 
(D) 20 percent for each subsequent year. 
(2) NON-FEDERAL
SHARE.—The non-Federal 
share of the cost may be in cash or in kind, fairly 
evaluated, including plant, equipment, and services 
and may be provided from State, local, or private 
sources, or Federal sources other than this subtitle. 
(h) SUPPLEMENT NOT SUPPLANT.—Funds appro-
priated pursuant to the authority of this subtitle shall be 
used to supplement and not supplant other Federal, State,
and local public funds and private funds expended to pro-
vide wage replacement. 
(i) EFFECT ON EXISTING RIGHTS.—Nothing in this 
subtitle shall be construed to supersede, preempt, or other-
wise infringe on the provisions of any collective bargaining 
agreement or any employment benefit program or plan 
that provides greater rights to employees than the rights 
established under this subtitle. 
SEC. 105. NOTIFICATION. 
An eligible entity that provides partial or full wage 
replacement to an eligible individual under this subtitle 
shall notify (in a form and manner prescribed by the Sec-
retary)—
(1) the employer of the individual of the 
amount of the wage replacement provided; and 
(2) the individual and the employer of the indi-
vidual that the employer shall count an appropriate 
period of leave, calculated under section 102(g) of 
the Family and Medical Leave Act of 1993 (29 
U.S.C. 2612(g)), as added by section 108, against 
the total amount of leave (if any) to which the em-
ployee is entitled under section 102(a)(1) of that Act 
(29 U.S.C. 2612(a)(1)).
SEC. 106. REPORT. 
Not later than 3 years after the beginning of the 
grant period for the first grant made under section 104, 
and annually thereafter, the Secretary shall prepare and 
submit to Congress a report that contains a description 
and evaluation of the program under this subtitle for the 
preceding year. 
SEC. 107. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to carry out 
this subtitle $400,000,000 for fiscal year 2004 and such 
sums as may be necessary for each subsequent fiscal year. 
SEC. 108. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) IN GENERAL.—Section 102 of the Family and 
Medical Leave Act of 1993 (29 U.S.C. 2612) is amended 
by adding at the end the following: 
‘‘(g) RELATIONSHIP TO FIRST INSURANCE.—
‘‘(1) FULL WAGE REPLACEMENT.—If an eligible 
entity provides full wage replacement to an employee 
for a period under title I of the Family and Work-
place Balancing Act of 2003, the employee’s em-
ployer shall count an amount of leave, equal to that 
period, against the total amount of leave (if any) to 
which the employee is entitled under subsection 
(a)(1). 
‘‘(2) PARTIAL WAGE REPLACEMENT.—If an eli-
gible entity provides partial wage replacement to an
employee for a period under title I of the Family 
and Workplace Balancing Act of 2003, the employ-
ee’s employer shall—
‘‘(A) total the amount of partial wage re-
placement provided for that period; 
‘‘(B) convert the total into a corresponding 
amount of full wage replacement provided for a 
proportionately reduced period; and 
‘‘(C) count an amount of leave, equal to 
the period described in subparagraph (B), 
against the total amount of leave (if any) to 
which the employee is entitled under subsection 
(a)(1).’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
Section 102(d)(2) of the Family and Medical Leave Act 
of 1993 (29 U.S.C. 2612(d)(2)) is amended by striking 
‘‘for leave’’ and inserting ‘‘for any unpaid leave’’. 
Subtitle B—Family and Medical 
Leave Enhancement Act of 2003
SEC. 111. SHORT TITLE. 
This subtitle may be cited as the ‘‘Family and Med-
ical Leave Enhancement Act of 2003’’.
SEC. 112. ADDITIONAL LEAVE FOR PARENTAL INVOLVE-
MENT. 
(a) LEAVE REQUIREMENT.—Section 102(a) of the 
Family and Medical Leave Act of 1993 (29 U.S.C. 
2612(a)) is amended by adding at the end the following: 
‘‘(3) ENTITLEMENT TO ADDITIONAL LEAVE FOR 
PARENTAL INVOLVEMENT.—
‘‘(A) IN
GENERAL.—Subject to section 
103(f), in addition to leave available under 
paragraph (1), an eligible employee shall be en-
titled to a total of 4 hours of leave during any 
30-day period, and a total of 24 hours of leave 
during any 12-month period to participate in or 
attend an activity that—
‘‘(i) is sponsored by a school or com-
munity organization; and 
‘‘(ii) relates to a program of the 
school or organization that is attended by 
a son or daughter or a grandchild of the 
employee. 
‘‘(B) DEFINITIONS.—As used in this para-
graph: 
‘‘(i) 
SCHOOL.—The 
term 
‘school’ 
means an elementary school or secondary 
school (as such terms are defined in the 
Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6301 et seq.)), a Head 
Start program assisted under the Head 
Start Act (42 U.S.C. 9831 et seq.), and a 
child care facility licensed under State law. 
‘‘(ii) COMMUNITY
ORGANIZATION.—
The term ‘community organization’ means 
a private nonprofit organization that is 
representative of a community or a signifi-
cant segment of a community and provides 
activities for individuals described in sub-
paragraph (A) or (B) of section 101(12), 
such as a scouting or sports organiza-
tion.’’. 
(b) SCHEDULE.—Section 102(b)(1) of such Act (29 
U.S.C. 2612(b)(1)) is amended by inserting after the sec-
ond sentence the following: ‘‘Leave under subsection 
(a)(3)(A) may be taken intermittently or on a reduced 
leave schedule.’’. 
(c) 
SUBSTITUTION
OF
PAID
LEAVE.—Section 
102(d)(2)(A) of such Act (29 U.S.C. 2612(d)(2)(A)) is 
amended—
(1) by striking ‘‘under’’ and inserting the fol-
lowing: ‘‘under—
‘‘(i)’’; and
(2) inserting before the period at the end the 
following: ‘‘; or 
‘‘(ii) subsection (a)(3)(A) for any part 
of the 24-hour period of such leave under 
such subsection’’. 
(d) NOTICE.—Section 102(e)(1) of such Act (29 
U.S.C. 2612(e)(1)) is amended by adding at the end the 
following: ‘‘In any case in which an employee requests 
leave under subsection (a)(3)(A), the employee shall pro-
vide the employer with not less than 7 days’ notice, before 
the date the leave is to begin, of the employee’s intention 
to take leave under such subsection.’’. 
(e) CERTIFICATION.—Section 103 of such Act (29 
U.S.C. 2613) is amended by adding at the end the fol-
lowing: 
‘‘(f) CERTIFICATION FOR PARENTAL INVOLVEMENT 
LEAVE.—An employer may require that a request for 
leave under section 102(a)(3)(A) be supported by a certifi-
cation issued at such time and in such manner as the Sec-
retary may by regulation prescribe.’’. 
SEC. 113. PARENTAL INVOLVEMENT LEAVE FOR CIVIL 
SERVANTS. 
(a) LEAVE REQUIREMENT.—Section 6382(a) of title 
5, United States Code, is amended by adding at the end 
the following:
‘‘(3)(A) Subject to section 6383(f), in addition to 
leave available under paragraph (1), an employee shall be 
entitled to a total of 4 hours of leave during any 30-day 
period, and a total of 24 hours of leave during any 12-
month period to participate in or attend an activity that—
‘‘(i) is sponsored by a school or community or-
ganization; and 
‘‘(ii) relates to a program of the school or orga-
nization that is attended by a son or daughter or a 
grandchild of the employee. 
‘‘(B) For the purpose of this paragraph: 
‘‘(i) The term ‘school’ means an elementary 
school or secondary school (as such terms are de-
fined in the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 6301 et seq.)), a Head Start 
program assisted under the Head Start Act (42 
U.S.C. 9831 et seq.), and a child care facility li-
censed under State law. 
‘‘(ii) The term ‘community organization’ means 
a private nonprofit organization that is representa-
tive of a community or a significant segment of a 
community and provides activities for individuals de-
scribed in subparagraph (A) or (B) of section 
6381(6), such as a scouting or sports organization.’’.
(b) SCHEDULE.—Section 6382(b)(1) of such title is 
amended by inserting after the second sentence the fol-
lowing: ‘‘Leave under subsection (a)(3)(A) may be taken 
intermittently or on a reduced leave schedule.’’. 
(c) 
SUBSTITUTION
OF
PAID
LEAVE.—Section 
6382(d) of such title is amended by inserting before ‘‘, 
except’’ the following: ‘‘, or for leave provided under sub-
section (a)(3)(A) any of the employee’s accrued or accu-
mulated annual leave under subchapter I for any part of 
the 24-hour period of such leave under such subsection’’. 
(d) NOTICE.—Section 6382(e)(1) of such title is 
amended by adding at the end the following: ‘‘In any case 
in which an employee requests leave under subsection 
(a)(3)(A), the employee shall provide the employing agen-
cy with not less than 7 days’ notice, before the date the 
leave is to begin, of the employee’s intention to take leave 
under such subsection.’’. 
(e) CERTIFICATION.—Section 6383 of such title is 
amended by adding at the end the following: 
‘‘(f) An employing agency may require that a request 
for leave under section 6382(a)(3)(A) be supported by a 
certification issued at such time and in such manner as 
the Office of Personnel Management may by regulation 
prescribe.’’.
SEC. 114. CLARIFICATION OF LEAVE ENTITLEMENT. 
Section 102(a)(1) of the Family and Medical Leave 
Act of 1993 (29 U.S.C. 2612(a)(1)) and section 
6382(a)(1) of title 5, United States Code, are each amend-
ed by adding at the end the following: 
‘‘(E) In order to meet routine family med-
ical needs, including transportation of a son or 
daughter or a grandchild for medical and dental 
appointments for annual checkups and vaccina-
tions. 
‘‘(F) In order to meet the routine medical 
care needs of elderly individuals who are related 
to the eligible employee, including visits to 
nursing homes and group homes.’’. 
SEC. 115. DEFINITION OF GRANDCHILD. 
(a) NON-CIVIL-SERVICE EMPLOYEES.—Section 101 
of the Family and Medical Leave Act (29 U.S.C. 2611) 
is amended by adding at the end the following new para-
graph: 
‘‘(14) GRANDCHILD.—The term ‘grandchild’ 
means a son or daughter of an employee’s child.’’. 
(b) CIVIL SERVICE EMPLOYEES.—Section 6381 of 
title 5, United States Code, is amended—
(1) in paragraph (5)(B), by striking ‘‘and’’ at 
the end;
(2) in paragraph (6)(B), by striking the period 
at the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(7) the term ‘grandchild’ means a son or 
daughter of an employee’s child.’’. 
TITLE II—CHILD CARE 
EXPANSION AND IMPROVEMENT 
Subtitle A—Care for Young 
Children 
SEC. 201. EXPANDING CHILD CARE FOR YOUNG CHILDREN. 
(a) GOALS.—Section 658A(b) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9801 
note) is amended— 
(1) in paragraph (4), by striking ‘‘and’’; 
(2) in paragraph (5), by striking the period and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) to assist States in improving child care 
services for young children.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
658B of the Child Care and Development Block Grant Act 
of 1990 (42 U.S.C. 9858) is amended—
(1) by striking ‘‘There’’ and inserting ‘‘(a) IN 
GENERAL.—There’’; and
(2) by adding at the end the following: 
‘‘(b) CHILD CARE ACTIVITIES FOR YOUNG CHIL-
DREN.—In addition to amounts appropriated under sub-
section (a), there is authorized to be appropriated to carry 
out child care activities for young children under this sub-
chapter $500,000,000 for each of the fiscal years 2004, 
2005, and 2006.’’. 
(c) CHILD CARE ACTIVITIES
FOR YOUNG CHIL-
DREN.—The Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9801 et seq.) is amended by in-
serting after section 658G the following: 
‘‘SEC. 658H. CHILD CARE ACTIVITIES FOR YOUNG CHIL-
DREN. 
‘‘Child care activities for young children for which 
funds under this subchapter may be used include activities 
that are designed to accomplish the following: 
‘‘(1) Increase the availability of child care serv-
ices for young children with disabilities. 
‘‘(2) Provide support services for networks of 
family child care providers. 
‘‘(3) Provide or support programs that provide 
training, services, materials, equipment, or other 
support to caregivers, eligible child care providers, 
and family child care providers that provide child 
care to young children. Such support may include
the purchase of equipment such as cribs and high 
chairs. 
‘‘(4) Provide funds to increase compensation of-
fered and provide bonuses to caregivers, eligible 
child care providers, and family child care providers 
who provide child care to children under the age of 
3 years, especially those caregivers and providers 
who have formal education in early childhood devel-
opment. 
‘‘(5) Provide and support networks between 
health care providers and caregivers, eligible child 
care providers, and family child care providers that 
provide child care to young children. 
‘‘(6) Provide child care services for young chil-
dren who are enrolled in Head Start programs under 
the Head Start Act (42 U.S.C. 9831 et seq.).’’. 
(d) DEFINITIONS.—Section 658P of the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 
9858n) is amended by adding at the end the following: 
‘‘(15) YOUNG
CHILDREN.—The term ‘young 
children’ means eligible children who are less than 3 
years of age.’’.
Subtitle B—Improving Child Care 
Quality Through Teacher Incen-
tives 
SEC. 221. PURPOSE. 
The purposes of this subtitle are—
(1) to establish the Child Care Provider Devel-
opment and Retention Grant Program, the Child 
Care Provider Scholarship Program, and a program 
of child care provider health benefits coverage; and 
(2) to help children receive the high quality 
child care and early education the children need for 
positive cognitive and social development, by reward-
ing and promoting the retention of committed, quali-
fied child care providers and by providing financial 
assistance to improve the educational qualifications 
of child care providers. 
SEC. 222. DEFINITIONS. 
In this subtitle: 
(1) CHILD CARE PROVIDER.—The term ‘‘child 
care provider’’ means an individual who provides a 
service directly to a child on a person-to-person basis 
for compensation for—
(A) a center-based child care provider that 
is licensed or regulated under State or local law 
and that satisfies the State and local require-
ments applicable to the child care services pro-
vided; 
(B) a licensed or regulated family child 
care provider that satisfies the State and local 
requirements applicable to the child care serv-
ices provided; or 
(C) an out-of-school time program that is 
licensed or regulated under State or local law 
and that satisfies the State and local require-
ments applicable to the child care services pro-
vided. 
(2) FAMILY CHILD CARE PROVIDER.—The term 
‘‘family child care provider’’ has the meaning given 
such term in section 658P of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 
9858n). 
(3) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given such term in section 4 of the 
Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450b). 
(4) LEAD AGENCY.—The term ‘‘lead agency’’ 
means the agency designated under section 658D of 
the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858b).
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(6) STATE.—The term ‘‘State’’ means any of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands of 
the United States, Guam, American Samoa, or the 
Commonwealth of the Northern Mariana Islands. 
(7) TRIBAL ORGANIZATION.—The term ‘‘tribal 
organization’’ has the meaning given the term in 
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 
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 
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.—
(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-
tions, in the second fiscal year for which 
the State receives such funds; 
(iii) not more than 80 percent of the 
cost of each grant made under such sec-
tions, in the third fiscal year for which the 
State receives such funds; and 
(iv) not more than 75 percent of the 
cost of each grant made under such sec-
tions, in any subsequent fiscal year for 
which the State receives such funds. 
(B) NON-FEDERAL SHARE.—
(i) IN GENERAL.—The State may pro-
vide the non-Federal share of the cost in 
cash or in the form of an in-kind contribu-
tion, fairly evaluated by the Secretary. 
(ii) IN-KIND CONTRIBUTION.—In this 
subparagraph, the term ‘‘in-kind contribu-
tion’’ means payment of the costs of par-
ticipation of eligible child care providers in 
health insurance programs or retirement 
programs. 
(2) CHILD CARE PROVIDER HEALTH BENEFITS 
COVERAGE.—
(A) FEDERAL SHARE.—The Federal share 
of the cost of carrying out activities under sec-
tion 228, with funds allotted under this section 
and distributed by the Secretary to a State, 
shall be not more than 50 percent of such cost. 
(B) NON-FEDERAL
SHARE.—The State 
may provide the non-Federal share of the cost 
in cash or in kind, fairly evaluated by the Sec-
retary, including plant, equipment, or services. 
The State shall provide the non-Federal share 
directly or through donations from public or 
private entities. Amounts provided by the Fed-
eral Government, or services assisted or sub-
sidized to any significant extent by the Federal 
Government, may not be included in deter-
mining the amount of such share. 
(g) AVAILABILITY OF ALLOTTED FUNDS DISTRIB-
UTED TO STATES.—Of the funds allotted under this sec-
tion for activities described in sections 226 and 227 and 
distributed by the Secretary to a State for a fiscal year—
(1) not less than 67.5 percent shall be available 
to the State for grants under section 226; 
(2) not less than 22.5 percent shall be available 
to the State for grants under section 227; and 
(3) not more than 10 percent shall be available 
to pay administrative costs incurred by the State to 
carry out activities described in sections 226 and 
227. 
(h) DEFINITION.—For the purposes of subsections 
(a) through (e), the term ‘‘State’’ includes only the 50 
States, the District of Columbia, and the Commonwealth 
of Puerto Rico. 
SEC. 225. APPLICATION AND PLAN. 
(a) APPLICATION.—To be eligible to receive a dis-
tribution of funds allotted under section 224, a State shall 
submit to the Secretary an application at such time, in 
such manner, and containing such information as the Sec-
retary may require by rule and shall include in such appli-
cation—
(1) a State plan that satisfies the requirements 
of subsection (b); and
(2) assurances of compliance satisfactory to the 
Secretary with respect to the requirements of section 
228. 
(b) REQUIREMENTS OF PLAN.—
(1) LEAD AGENCY.—The State plan shall iden-
tify the lead agency to make grants under this sub-
title for the State. 
(2) RECRUITMENT AND RETENTION OF CHILD 
CARE
PROVIDERS.—The State plan shall describe 
how the lead agency will encourage both the recruit-
ment of qualified child care providers who are new 
to the child care field and the retention of qualified 
child care providers who have a demonstrated com-
mitment to the child care field. 
(3) NOTIFICATION OF AVAILABILITY OF GRANTS 
AND BENEFITS.—The State plan shall describe how 
the lead agency will identify all eligible child care 
providers in the State and notify the providers of the 
availability of grants and benefits under this sub-
title. 
(4) DISTRIBUTION
OF
GRANTS.—The State 
plan shall describe how the lead agency will make 
grants under sections 226 and 227 to eligible child 
care providers in selected geographical areas in the 
State in compliance with the following requirements:
(A) 
SELECTION
OF
GEOGRAPHICAL 
AREAS.—For the purpose of making such 
grants for a fiscal year, the State shall—
(i) select a variety of geographical 
areas, determined by the State, that, col-
lectively—
(I) include urban areas, suburban 
areas, and rural areas; and 
(II) are areas whose residents 
have diverse income levels; and 
(ii) give special consideration to geo-
graphical areas selected under this sub-
paragraph for the preceding fiscal year. 
(B) SELECTION
OF
CHILD
CARE
PRO-
VIDERS
TO
RECEIVE
GRANTS.—In making 
grants under section 226, the State may make 
grants only to eligible child care providers in 
geographical areas selected under subparagraph 
(A), but may give special consideration in such 
areas to eligible child care providers—
(i) who have attained a higher rel-
evant educational credential; 
(ii) who provide a specific kind of 
child care services;
(iii) who provide child care services to 
populations who meet specific economic 
characteristics; or 
(iv) who meet such other criteria as 
the State may establish. 
(C) LIMITATION.—The State shall describe 
how the State will ensure that grants made 
under section 226 to child care providers will 
not be used to offset reductions in the com-
pensation of such providers. 
(D) REPORTING REQUIREMENT.—With re-
spect to each particular geographical area se-
lected under subparagraph (A), the State shall 
provide an assurance that the State will, for 
each fiscal year for which such State receives a 
grant under section 226—
(i) include in the report required by 
section 229, detailed information regard-
ing—
(I) the continuity of employment 
of the grant recipients as child care 
providers with the same employer; 
(II) with respect to each em-
ployer that employed such a grant re-
cipient, whether such employer was
accredited by a recognized national or 
State accrediting body during the pe-
riod of employment; and 
(III) to the extent practicable 
and available to the State, the rate 
and frequency of employment turnover 
of 
qualified 
child 
care 
providers 
throughout such area, 
during the 2-year period ending on the 
deadline for submission of applications for 
grants under section 226 for that fiscal 
year; and 
(ii) provide a follow-up report, not 
later than 90 days after the end of the suc-
ceeding fiscal year that includes informa-
tion regarding—
(I) the continuity of employment 
of the grant recipients as child care 
providers with the same employer; 
(II) with respect to each em-
ployer that employed such a grant re-
cipient, whether such employer was 
accredited by a recognized national or 
State accrediting body during the pe-
riod of employment; and
(III) to the extent practicable 
and available to the State, detailed in-
formation regarding the rate and fre-
quency of employment turnover of 
qualified child care providers through-
out such area, 
during the 1-year period beginning on the 
date on which the grant to the State was 
made under section 226. 
(5) CHILD CARE PROVIDER DEVELOPMENT AND 
RETENTION GRANT PROGRAM.—The State plan shall 
describe how the lead agency will determine the 
amounts of grants to be made under section 226 in 
accordance with the following requirements: 
(A) SUFFICIENT
AMOUNTS.—The State 
shall demonstrate that the amounts of indi-
vidual grants to be made under section 226 will 
be sufficient—
(i) to encourage child care providers 
to improve their qualifications; and 
(ii) to retain qualified child care pro-
viders in the child care field. 
(B) AMOUNTS
TO
CREDENTIALED
PRO-
VIDERS.—Such grants made to eligible child 
care providers who have a child development as-
sociate credential (or equivalent) and who are 
employed full-time to provide child care services 
shall be in an amount that is not less than 
$1,000 per year. 
(C) AMOUNTS TO PROVIDERS WITH HIGH-
ER LEVELS OF EDUCATION.—The State shall 
make such grants in amounts greater than 
$1,000 per year to eligible child care providers 
who have higher levels of education than the 
education required for a credential such as a 
child development associate credential (or equiv-
alent), according to the following requirements: 
(i) PROVIDERS WITH BACCALAUREATE 
DEGREES IN RELEVANT FIELDS.—An eligi-
ble child care provider who has a bacca-
laureate degree in the area of child devel-
opment or early child education shall re-
ceive a grant under section 226 in an 
amount that is not less than twice the 
amount of the grant that is made under 
section 226 to an eligible child care pro-
vider who has an associate of the arts de-
gree in the area of child development or 
early child education.
(ii) PROVIDERS WITH ASSOCIATE DE-
GREES.—An eligible child care provider 
who has an associate of the arts degree in 
the area of child development or early child 
education shall receive a grant under sec-
tion 226 in an amount that is not less 
than 150 percent of the amount of the 
grant that is made under section 226 to an 
eligible child care provider who has a child 
development associate credential (or equiv-
alent) and is employed full-time to provide 
child care services. 
(iii) OTHER PROVIDERS WITH BACCA-
LAUREATE DEGREES.—
(I) IN GENERAL.—Except as pro-
vided in subclause (II), an eligible 
child care provider who has a bacca-
laureate degree in a field other than 
child development or early child edu-
cation shall receive a grant under sec-
tion 226 in an amount equal to the 
amount of the grant that is made 
under section 226 to an eligible child 
care provider who has an associate of
the arts degree in the area of child de-
velopment or early child education. 
(II) EXCEPTION.—If an eligible 
child care provider who has such a 
baccalaureate degree obtains addi-
tional educational training in the area 
of child development or early child 
education, as specified by the State, 
such provider shall receive a grant 
under section 226 in an amount equal 
to the amount of the grant that is 
made under section 226 to an eligible 
child care provider who has a bacca-
laureate degree specified in clause (i). 
(D) 
AMOUNTS
TO
FULL-TIME
PRO-
VIDERS.—The State shall make a grant under 
section 226 to an eligible child care provider 
who works full-time in a greater amount than 
the amount of the grant that is made under 
section 226 to an eligible child care provider 
who works part-time, based on the State defini-
tions of full-time and part-time work. 
(E) AMOUNTS
TO
EXPERIENCED
PRO-
VIDERS.—The State shall make grants under 
section 226 in progressively larger amounts to
eligible child care providers to reflect the num-
ber of years worked as child care providers. 
(6) DISTRIBUTION OF CHILD CARE PROVIDER 
SCHOLARSHIPS.—The State plan shall describe how 
the lead agency will make grants for scholarships in 
compliance with section 227 and shall specify the 
types of educational and training programs for 
which the scholarship grants made under such sec-
tion may be used, including only programs that—
(A) are administered by institutions of 
higher education that are eligible to participate 
in student financial assistance programs under 
title IV of the Higher Education Act of 1965 
(20 U.S.C. 1070 et seq.); and 
(B) lead to a State or nationally recog-
nized credential in the area of child develop-
ment or early child education, an associate of 
the arts degree in the area of child development 
or early child education, or a baccalaureate de-
gree in the area of child development or early 
child education. 
(7) EMPLOYER
CONTRIBUTION.—The State 
plan shall describe how the lead agency will encour-
age employers of child care providers to contribute
to the attainment of education goals by eligible child 
care providers who receive grants under section 227. 
(8) SUPPLEMENTATION.—The State plan shall 
provide assurances that amounts received by the 
State to carry out sections 226, 227, and 228 will 
be used only to supplement, and not to supplant, 
Federal, State, and local funds otherwise available to 
support existing services and activities (as of the 
date the amounts are used) that—
(A) encourage child care providers to im-
prove their qualifications and that promote the 
retention of qualified child care providers in the 
child care field; or 
(B) provide health benefits coverage for 
child care providers. 
SEC. 226. CHILD CARE PROVIDER DEVELOPMENT AND RE-
TENTION GRANT PROGRAM. 
(a) IN GENERAL.—A State that receives funds allot-
ted under section 224 and made available to carry out this 
section shall expend such funds to pay for the Federal 
share of the cost of making grants to eligible child care 
providers in accordance with this section, to improve the 
qualifications and promote the retention of qualified child 
care providers.
(b) ELIGIBILITY TO RECEIVE GRANTS.—To be eligi-
ble to receive a grant under this section, a child care pro-
vider shall—
(1) have a child development associate creden-
tial (or equivalent), an associate of the arts degree 
in the area of child development or early child edu-
cation, a baccalaureate degree in the area of child 
development or early child education, or a bacca-
laureate degree in an unrelated field; and 
(2) be employed as a child care provider for not 
less than 1 calendar year, or (if the provider is em-
ployed on the date of the eligibility determination in 
a child care program that operates for less than a 
full calendar year) the program equivalent of 1 cal-
endar year, ending on the date of the application for 
such grant, except that not more than 3 months of 
education related to child development or to early 
child education obtained during the corresponding 
calendar year may be treated as employment that 
satisfies the requirements of this paragraph. 
(c) PRESERVATION OF ELIGIBILITY.—A State shall 
not take into consideration whether a child care provider 
is receiving, may receive, or may be eligible to receive any 
funds or benefits under any other provision of this subtitle
for purposes of selecting eligible child care providers to 
receive grants under this section. 
SEC. 227. CHILD CARE PROVIDER SCHOLARSHIP PROGRAM. 
(a) IN GENERAL.—A State that receives funds allot-
ted under section 224 and made available to carry out this 
section shall expend such funds to pay for the Federal 
share of the cost of making scholarship grants to eligible 
child care providers in accordance with this section, to im-
prove their educational qualifications to provide child care 
services. 
(b) ELIGIBILITY REQUIREMENT FOR SCHOLARSHIP 
GRANTS.—To be eligible to receive a scholarship grant 
under this section, a child care provider shall be employed 
as a child care provider for not less than 1 calendar year, 
or (if the provider is employed on the date of the eligibility 
determination in a child care program that operates for 
less than a full calendar year) the program equivalent of 
1 calendar year, ending on the date of the application for 
such grant. 
(c) SELECTION OF GRANTEES.—For purposes of se-
lecting eligible child care providers to receive scholarship 
grants under this section and determining the amounts of 
such grants, a State shall not—
(1) take into consideration whether a child care 
provider is receiving, may receive, or may be eligible
to receive any funds or benefits under any other pro-
vision of this subtitle, or under any other Federal 
or State law that provides funds for educational pur-
poses; or 
(2) consider as resources of such provider any 
funds such provider is receiving, may receive, or may 
be eligible to receive under any other provision of 
this subtitle, under any other Federal or State law 
that provides funds for educational purposes, or 
from a private entity. 
(d) COST-SHARING REQUIRED.—The amount of a 
scholarship grant made under this section to an eligible 
child care provider shall be less than the cost of the edu-
cational or training program for which such grant is made. 
(e) 
ANNUAL
MAXIMUM
SCHOLARSHIP
GRANT 
AMOUNT.—The maximum aggregate dollar amount of a 
scholarship grant made by a State to an eligible child care 
provider under this section in a fiscal year shall be $1,500. 
SEC. 228. CHILD CARE PROVIDER HEALTH BENEFITS COV-
ERAGE. 
(a) SHORT TITLE.—This section may be cited as the 
‘‘Healthy Early Education Workforce Grant Program 
Act’’. 
(b) DEFINITION.—In this section, the terms ‘‘depend-
ent’’, ‘‘domestic partner’’, and ‘‘spouse’’, used with respect
to a State, have the meanings given the terms by the 
State. 
(c) GENERAL AUTHORITY.—A State that receives 
funds allotted under section 224 and made available to 
carry out this section shall expend such funds to pay for 
the Federal share of the cost of providing access to afford-
able health benefits coverage for—
(1) eligible child care providers; and 
(2) at the discretion of the State involved, the 
spouses, domestic partners, and dependents of such 
providers. 
(d) PERMISSIBLE ACTIVITIES.—In carrying out sub-
section (c), the State may expend such funds for any of 
the following: 
(1) To reimburse an employer of an eligible 
child care provider, or the provider, for the employ-
er’s or provider’s share (or a portion of the share) 
of the premiums or other costs for coverage under 
group or individual health plans. 
(2) To offset the cost of enrolling eligible child 
care providers in public health benefits plans, such 
as the medicaid program under title XIX of the So-
cial Security Act (42 U.S.C. 1396 et seq.), the State 
children’s health insurance program under title XXI
of such Act (42 U.S.C. 1397aa et seq.), or public 
employee health benefit plans. 
(3) To otherwise subsidize the cost of health 
benefits coverage for eligible child care providers. 
(e) ELIGIBILITY CRITERIA FOR HEALTH BENEFITS 
COVERAGE.—The State may establish criteria to limit the 
child care providers who may receive benefits through the 
allotment. 
(f) SELECTION OF GRANTEES.—For purposes of se-
lecting eligible child care providers to receive benefits 
under this section for a fiscal year, a State shall give—
(1) highest priority to—
(A) providers that meet any applicable cri-
teria established in accordance with subsection 
(e) and received such assistance during the pre-
vious fiscal year; and 
(B) at the State’s discretion, the spouses, 
domestic partners, and dependents of such pro-
viders; and 
(2) second highest priority to—
(A) providers that meet any applicable cri-
teria established in accordance with subsection 
(e) and are accredited by the National Associa-
tion for the Education of Young Children or the
National Association for Family Child Care; 
and 
(B) at the State’s discretion, the spouses, 
domestic partners, and dependents of such pro-
viders. 
SEC. 229. ANNUAL REPORT. 
A State that receives funds appropriated to carry out 
this subtitle for a fiscal year shall submit to the Secretary, 
not later than 90 days after the end of such fiscal year, 
a report—
(1) specifying the uses for which the State ex-
pended such funds, and the aggregate amount of 
funds (including State funds) expended for each of 
such uses; 
(2) containing available data relating to grants 
made and benefits provided with such funds, includ-
ing—
(A) the number of eligible child care pro-
viders who received such grants and benefits; 
(B) the amounts of such grants and bene-
fits; 
(C) any other information that describes or 
evaluates the effectiveness of this subtitle;
(D) the particular geographical areas se-
lected under section 225 for the purpose of 
making such grants; 
(E) with respect to grants made under sec-
tion 226—
(i) the number of years grant recipi-
ents have been employed as child care pro-
viders; 
(ii) the level of training and education 
of grant recipients; 
(iii) to the extent practicable and 
available to the State, detailed information 
regarding the salaries and other compensa-
tion received by grant recipients to provide 
child care services before, during, and after 
receiving such grants; 
(iv) the number of children who re-
ceived child care services provided by grant 
recipients; 
(v) information on family demo-
graphics of such children; 
(vi) the types of settings described in 
subparagraphs (A), (B), and (C) of section 
222(1) in which grant recipients are em-
ployed; and
(vii) the ages of the children who re-
ceived child care services provided by grant 
recipients; 
(F) with respect to grants made under sec-
tion 227—
(i) the number of years grant recipi-
ents have been employed as child care pro-
viders; 
(ii) the level of training and education 
of grant recipients; 
(iii) to the extent practicable and 
available to the State, detailed information 
regarding the salaries and other compensa-
tion received by grant recipients to provide 
child care services before, during, and after 
receiving such grants; 
(iv) the types of settings described in 
subparagraphs (A), (B), and (C) of section 
222(1) in which grant recipients are em-
ployed; 
(v) the ages of the children who re-
ceived child care services provided by grant 
recipients;
(vi) the number of course credits or 
credentials obtained by grant recipients; 
and 
(vii) the amount of time taken for 
completion of the educational and training 
programs for which such grants were 
made; and 
(G) such other information as the Sec-
retary may require by rule. 
SEC. 230. EVALUATION OF HEALTH BENEFITS PROGRAMS 
BY SECRETARY. 
(a) EVALUATION.—The Secretary shall conduct an 
evaluation of several State programs carried out with 
grants made under section 228, representing various ap-
proaches to raising the rate of child care providers with 
health benefits coverage. 
(b) ASSESSMENT OF IMPACTS.—In evaluating State 
programs under subsection (a), the Secretary may con-
sider any information appropriate to measure the success 
of the programs, and shall assess the impact of the pro-
grams on the following: 
(1) The rate of child care providers with health 
benefits coverage. 
(2) The take-up rate by eligible child care pro-
viders.
(3) The turnover rate in the child care field. 
(4) The average wages paid to a child care pro-
vider. 
(c) REPORT.—Not later than 3 years after the date 
of enactment of this subtitle, the Secretary shall prepare 
and submit a report to Congress containing the results 
of the evaluation conducted under subsection (a), together 
with recommendations for strengthening programs carried 
out with grants made under section 228. 
SEC. 231. AUTHORIZATION OF APPROPRIATIONS. 
(a) CHILD CARE PROVIDER DEVELOPMENT, RETEN-
TION, AND SCHOLARSHIPS.—There are authorized to be 
appropriated to carry out the activities described in sec-
tions 226 and 227 $500,000,000 for fiscal year 2004 and 
such sums as may be necessary for each of fiscal years 
2005 through 2008. 
(b) CHILD CARE PROVIDER HEALTH BENEFITS COV-
ERAGE.—There is authorized to be appropriated to carry 
out the activities described in section 228 $200,000,000 
for fiscal year 2004 and such sums as may be necessary 
for each of fiscal years 2005 through 2008.
under the minimum property standards and will 
be cost-effective over the life of the measure. 
‘‘(4) AMORTIZATION
AND
INTEREST.—Each 
mortgage insured under this section shall—
‘‘(A) provide for complete amortization by 
periodic payments under such terms as the Sec-
retary shall prescribe; 
‘‘(B) have a maturity date satisfactory to 
the Secretary, but in no event longer than 25 
years; and 
‘‘(C) bear interest at such rate as may be 
agreed upon by the mortgagor and the mort-
gagee, and the Secretary shall not issue any 
regulations or establish any terms or conditions 
that interfere with the ability of the mortgagor 
and mortgagee to determine the interest rate. 
‘‘(5) RELEASE.—The Secretary may consent to 
the release of a part or parts of the mortgaged prop-
erty or project from the lien of any mortgage in-
sured under this section upon such terms and condi-
tions as the Secretary may prescribe. 
‘‘(6) MORTGAGE
INSURANCE
TERMS.—Sub-
sections (d), (e), (g), (h), (i), (j), (k), (l), and (n) of 
section 207 apply to any mortgage insured under 
this section, except that all references in such sub-