any program or activity receiving Federal financial 
assistance under this title. 
‘‘(2) FACILITIES
OF
RELIGIOUS
ORGANIZA-
TIONS.—The prohibition with respect to religion 
under paragraph (1) shall not apply to a child care 
facility that is controlled by, or that is closely identi-
fied with, the tenets of a particular religious organi-
zation, if the application of this paragraph would not 
be consistent with the religious tenets of such orga-
nization. 
‘‘(h) LIABILITY INSURANCE.—A child care provider 
operating a child care facility assisted under this section 
or section 223(h) shall obtain and maintain liability insur-
ance in such amounts and subject to such requirements 
as the Secretary considers to be appropriate. 
‘‘(i) SMALL PURPOSE LOANS.—
‘‘(1) IN GENERAL.—To the extent that amounts 
are made available pursuant to subsection (l), the 
Secretary shall make loans, directly or indirectly, to 
providers of child care facilities for reconstruction or 
renovation of such facilities, in accordance with this 
subsection. 
‘‘(2) REQUIREMENTS.—A loan under this sub-
section—
‘‘(A) may be made only for a child care fa-
cility that is financially and operationally viable, 
as determined under standards established by 
the Secretary; 
‘‘(B) may not have a term to maturity ex-
ceeding 7 years; 
‘‘(C) shall bear interest at a rate estab-
lished by the Secretary; and 
‘‘(D) shall be subject to such other terms 
and conditions as the Secretary may establish 
by regulation. 
‘‘(3) AGGREGATE LOAN AMOUNT.—The aggre-
gate amount of loans under this subsection to a sin-
gle provider may not exceed $30,000. 
‘‘(j) NOTIFICATION.—The Secretary shall take such 
actions as may be necessary to publicize the availability 
of the programs for mortgage insurance under this section 
and section 223(h), and the loan program under sub-
section (i) of this section, in a manner that ensures that 
information concerning such programs will be available to 
child care providers throughout the United States. 
‘‘(k) REGULATIONS.—The Secretary shall—
‘‘(1) issue any regulations necessary to carry 
out this section; and
‘‘(2) in carrying out paragraph (1), consult with 
the Secretary of Health and Human Services with 
respect to any aspects of the regulations regarding 
child care facilities. 
‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$30,000,000 for fiscal year 2004, to remain available until 
expended, of which not more than 10 percent may be used 
for loans under subsection (i).’’. 
SEC. 4. 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. 5. STUDY OF AVAILABILITY OF SECONDARY MARKETS 
FOR MORTGAGES ON CHILD CARE FACILI-
TIES. 
(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 Act);
(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. 6. 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 3. 
(2) ELIGIBLE INTERMEDIARY.—The term ‘‘eli-
gible intermediary’’ means a private, nonprofit inter-
mediary organization that has demonstrated experi-
ence in— 
(A) financing the construction and renova-
tion of physical facilities;
(B) providing technical and financial as-
sistance to child care providers or other similar 
entities; 
(C) working with small businesses; and 
(D) securing private sources for capital fi-
nancing; 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 3. 
(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) PAYMENTS FROM FUND.—Subject to sub-
section (f), from amounts deposited into the revolv-
ing loan fund under paragraph (1), each eligible 
intermediary shall provide technical and financial as-
sistance (in the form of loans, grants, investments, 
guarantees, interest subsidies, and other appropriate 
forms of assistance) to eligible recipients for the ac-
quisition or improvement of child care facilities or 
equipment. 
(3) LOAN REPAYMENTS AND INVESTMENT PRO-
CEEDS.—Any amount received by an eligible inter-
mediary from an eligible recipient in the form of a 
loan repayment or investment proceeds shall be de-
posited into the child care revolving fund of the eligi-
ble intermediary for redistribution to other eligible 
recipients in accordance with this section. 
(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 
the renovation or construction of child care facilities 
or the acquisition of equipment by eligible recipients, 
except that the amount made available to any eligi-
ble recipient under this paragraph may not exceed 
40 percent of the total costs incurred by the eligible 
recipient in connection with such renovation, con-
struction, or acquisition; and 
(2) the amount remaining after distribution 
under paragraph (1), shall be used to provide direct 
assistance to eligible recipients in obtaining public or 
private financing for the renovation or construction 
of child care facilities and the acquisition of equip-
ment, including developing and implementing financ-
ing resources, options, and plans for those recipi-
ents. 
(g) DAVIS BACON ACT.—The Act of March 3, 1931 
(popularly known as the Davis-Bacon Act) shall apply to 
actions taken under this Act.
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$10,000,000 for each of fiscal years 2004 through 2008.
Æ