I
107TH CONGRESS
2D SESSION
H. R. 5291
To amend the National Housing Act to authorize the Secretary of Housing
and Urban Development to insure mortgages for the acquisition, con-
struction, or substantial rehabilitation of child care and development
facilities and to establish the Children’s Development Commission (Kiddie
Mac) to certify such facilities for such insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 26, 2002
Mrs. MALONEY of New York (for herself, Mr. GILMAN, Mr. KANJORSKI, Mr.
FROST, Mr. GUTIERREZ, Ms. HOOLEY of Oregon, Mr. SANDLIN, Mr.
GONZALEZ, Ms. LEE, Mr. ISRAEL, Mr. SHOWS, Mr. CROWLEY, Mr. JACK-
SON of Illinois, Mr. PAYNE, Mr. SAWYER, Mr. ALLEN, Ms. BERKLEY, and
Ms. JACKSON-LEE of Texas) introduced the following bill; which was re-
ferred to the Committee on Financial Services
A BILL
To amend the National Housing Act to authorize the Sec-
retary of Housing and Urban Development to insure
mortgages for the acquisition, construction, or substan-
tial rehabilitation of child care and development facilities
and to establish the Children’s Development Commission
(Kiddie Mac) to certify such facilities for such insurance,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Children’s Develop-
ment Commission Act (Kiddie Mac)’’.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) The need for quality nursery schools, both
full-time and part-time child care centers and after-
school programs, neighborhood-run mothers-day-out
programs, and family child care providers has grown
among working parents, and parents who stay at
home, who want their children to have access to
early childhood education.
(2) All parents should have access to safe, stim-
ulating, and educational early childhood education
programs for their children, whether such programs
are carried out in a child care center, a part-time
nursery school (including a nursery school operated
by a religious organization), or a certified child care
provider’s home.
(3) The number of available enrollment oppor-
tunities for children to receive quality child care
services is not meeting the demand for such services.
(4) In 1995 there were about 21,000,000 chil-
dren less than 6 years of age, of whom 31 percent
were participating in center-based child care services
and 14 percent were receiving child care in homes.
Between 1992 and 2005 the participation of women
24 to 54 years of age in the labor force is projected
to increase from 75 percent to 83 percent.
(5) In States that have set up a mechanism to
provide capital improvements for child care facilities,
the demand for services of such facilities still has
not been met.
(6) The United States is behind other western,
industrialized countries when it comes to providing
child care services. In France, almost 100 percent of
all children 3 to 5 years of age attend nursery
school. In Germany this number is 65 to 70 percent.
In Japan 90 percent of such children attend some
form of preschool care. In all of these countries early
childhood care has proven to increase children’s de-
velopment and performance.
SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHA-
BILITATED CHILD CARE AND DEVELOPMENT
FACILITIES.
Title II of the National Housing Act (12 U.S.C. 1707
et seq.) is amended by adding at the end the following
new section:
‘‘MORTGAGE INSURANCE FOR CHILD CARE AND
DEVELOPMENT FACILITIES
‘‘SEC. 257. (a) PURPOSE.—The purpose of this sec-
tion is to facilitate and assist in the provision and develop-
ment of licensed child care and development facilities.
‘‘(b) GENERAL INSURANCE AUTHORITY.—The Sec-
retary may insure mortgages (including advances on such
mortgages during construction) in accordance with the
provisions of this section and upon such terms and condi-
tions as the Secretary may prescribe and may make com-
mitments for insurance of such mortgages before the date
of their execution or disbursement thereon.
‘‘(c) ELIGIBLE MORTGAGES.—To carry out the pur-
pose of this section, the Secretary may insure any mort-
gage that covers a new child care and development facility,
including a new addition to an existing child care and de-
velopment facility (regardless of whether the existing facil-
ity is being rehabilitated), or a substantially rehabilitated
child care and development facility, including equipment
to be used in the operation of the facility, subject to the
following conditions:
‘‘(1) APPROVED
MORTGAGOR.—The mortgage
shall be executed by a mortgagor approved by the
Secretary. The Secretary may, in the discretion of
the Secretary, require any such mortgagor to be reg-
ulated or restricted as to charges and methods of fi-
nancing and, if the mortgagor is a corporate entity,
as to capital structure and rate of return. As an aid
to the regulation or restriction of any mortgagor
with respect to any of the foregoing matters, the
Secretary may make such contracts with and acquire
for not more than $100 such stock or interest in
such mortgagor as the Secretary may consider nec-
essary. Any stock or interest so purchased shall be
paid for out of the General Insurance Fund, and
shall be redeemed by the mortgagor at par upon the
termination of all obligations of the Secretary under
the insurance.
‘‘(2) PRINCIPAL OBLIGATION.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the mortgage shall involve a
principal obligation in an amount not to exceed
80 percent of the estimated value of the prop-
erty or project, or 85 percent of the estimated
value of the property or project in the case only
of a mortgagor that is a private nonprofit cor-
poration or association (as such term is defined
pursuant to section 221(d)(3)), including—
‘‘(i) equipment to be used in the oper-
ation of the facility when the proposed im-
provements are completed and the equip-
ment is installed; or
‘‘(ii) a solar energy system (as defined
in subparagraph (3) of the last paragraph
of section 2(a)) or residential energy con-
servation measures (as defined in subpara-
graphs (A) through (G) and (I) of section
210(11) of the National Energy Conserva-
tion Policy Act), in cases in which the Sec-
retary determines that such measures are
in addition to those required under the
minimum property standards and will be
cost-effective over the life of the measure.
‘‘(B) INCREASE FOR CERTAIN DISTRESSED
AREAS.—In the case of any mortgage for a
child care and development facility that is lo-
cated in a distressed area and for which more
than 50 percent of the children served by the
facility are children of families or individuals
who are eligible for assistance under a State
program for temporary assistance for needy
families that is funded under part A of title IV
of the Social Security Act, the mortgage shall
involve principal obligation in an amount not to
exceed the sum of the amount determined
under subparagraph (A) for the mortgagor and
5 percent of the estimated value of the property
or project.
‘‘(3) 
AMORTIZATION
AND
INTEREST.—The
mortgage shall—
‘‘(A) provide for complete amortization by
periodic payments under such terms as the Sec-
retary shall prescribe;
‘‘(B) have a maturity 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.
‘‘(d) CERTIFICATION BY CHILDREN’S DEVELOPMENT
COMMISSION.—The Secretary may not insure a mortgage
under this section unless the Children’s Development
Commission established under section 258 certifies that
the facility is in compliance, or will be in compliance not
later than 12 months after such certification, with—
‘‘(1) any laws, standards, and requirements ap-
plicable to such facilities under the laws of the
State, municipality, or other unit of general local
government in which the facility is or is to be lo-
cated; and
‘‘(2) after the effective date of the standards
and 
requirements 
established 
under 
section
258(c)(2), such standards and requirements.
‘‘(e) LOW-INCOME CLIENTELE.—The Secretary may
not insure a mortgage under this section unless the mort-
gage certifies, to the satisfaction of the Secretary, that not
less than 20 percent of the children served by the facility
during the period that the mortgage is outstanding shall
be children of families having incomes less than the me-
dian income for the metropolitan statistical area in which
the facility is located.
‘‘(f) RELEASE.—The Secretary may consent to the
release of a part or parts of the mortgaged property or
project from the lien of any mortgage insured under this
section upon such terms and conditions as the Secretary
may prescribe.
‘‘(g) MORTGAGE INSURANCE TERMS.—The provi-
sions of subsections (d), (e), (g), (h), (i), (j), (k), (l), and
(n) of section 207 shall apply to mortgages insured under
this section, except that all references in such subsections
to section 207 shall be considered, for purposes of mort-
gage insurance under this section, to refer to this section.
‘‘(h) MORTGAGE INSURANCE
FOR FIRE SAFETY
EQUIPMENT LOANS.—
‘‘(1) AUTHORITY.—The Secretary may, upon
such terms and condition as the Secretary may pre-
scribe, make commitments to insure and insure
loans made by financial institutions or other ap-
proved mortgagees to child care and development fa-
cilities to provide for the purchase and installation
of fire safety equipment necessary for compliance
with the 1967 edition of the Life Safety Code of the
National Fire Protection Association (or any subse-
quent edition specified by the Secretary of Health
and Human Services).
‘‘(2) LOAN REQUIREMENTS.—To be eligible for
insurance under this subsection a loan shall—
‘‘(A) not exceed the Secretary’s estimate of
the reasonable cost of the equipment fully in-
stalled;
‘‘(B) bear interest at such rate as may be
agreed upon by the mortgagor and the mort-
gagee;
‘‘(C) have a maturity satisfactory to the
Secretary;
‘‘(D) be made by a financial institution or
other mortgagee approved by the Secretary as