I 
109TH CONGRESS 
2D SESSION 
H. R. 6392 
To provide for the construction and rehabilitation of child care facilities 
in areas of the Gulf Coast affected by Hurricanes Katrina and Rita. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 6, 2006 
Mr. JEFFERSON introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To provide for the construction and rehabilitation of child 
care facilities in areas of the Gulf Coast affected by 
Hurricanes Katrina and Rita. 
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 ‘‘Emergency Gulf Coast 
Child Care Construction and Rebuilding Act’’. 
SEC. 2. CONGRESSIONAL FINDINGS. 
The Congress finds that— 
(1) the Bureau of the Census has reported that, 
before Hurricane Katrina occurred, there were in 
New Orleans— 
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(A) 25,000 two-parent families with chil-
dren under the age of 18; 
(B) 26,000 female-headed households with 
children under 18 and no husband present; and 
(C) more than 18,000 households con-
sisting of an individual more than 65 years old 
living alone; 
(2) studies have determined that reopening 
child care facilities after Hurricane Katrina was cru-
cial for helping parents get back to work and busi-
nesses to recover; 
(3) studies have shown that a lack of available 
and affordable child care greatly impedes economic 
recovery and reduces worker productivity; 
(4) the National Association of Child Care Re-
source and Referral Agencies reported in a study 
published by the Mississippi State University Early 
Childhood Institute that between 62 and 94 percent 
of the licensed child care slots in the three coastal 
counties in Mississippi hardest hit by Hurricanes 
Katrina and Rita were lost;
(5) initial assessments determined that one- 
fourth of the licensed child care centers, in Jackson 
County, Mississippi, representing 11 percent of the 
county’s licensed child care capacity, were damaged 
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beyond repair and another 39 percent of centers 
needed repairs; 
(6) before Hurricanes Katrina and Rita, New 
Orleans had 1,912 day care slots at 266 licensed 
child care centers, but now 75 percent of those slots 
and 80 percent of those centers are gone;
(7) studies have determined that— 
(A) 33 of 61 neighborhoods in New Orle-
ans lost all their licensed day care centers; 
(B) another 19 neighborhoods lost at least 
some day care slots; and 
(C) several neighborhoods completely lack-
ing licensed child care have already shown 
strong signs of recovery, including Bywater and 
Broadmoor, while areas such as Central City, 
Mid-City, and Uptown have lost 60 percent or 
more of their centers; 
(8) only 55 child care centers were open in New 
Orleans at the end of September 2006 and of those 
10 participated in the Federal Head Start program, 
which is one-third the participation level pre- 
Katrina; 
(9) a recent study found that the New Orleans 
still lacks any coordinated plan for returning child 
care to neighborhoods that need it most; and 
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(10) studies have stated that the most effective 
way to rebuild the child care infrastructure is to 
help child care programs in the disaster area reopen 
as rapidly as is safe, by giving priority to licensed 
early childhood facilities and by recruiting, training, 
and retaining child-care professionals. 
SEC. 
3. 
USE 
OF 
COMMUNITY 
DEVELOPMENT 
BLOCK 
GRANTS TO ESTABLISH CHILD CARE FACILI-
TIES IN THE GULF COAST. 
Section 105(a) of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5305(a)) is amended— 
(1) in paragraph (24), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (25), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(26) the construction and rebuilding of child 
care facilities that are located in any area for which 
the President declared that a major disaster exists, 
in accordance with section 401 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance 
Act (42 U.S.C. 5170), as a consequence of Hurri-
cane Katrina or Rita of 2005.’’. 
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SEC. 4. INSURANCE FOR MORTGAGES ON NEW AND REHA-
BILITATED CHILD CARE FACILITIES IN THE 
GULF COAST. 
Title II of the National Housing Act (12 U.S.C. 1707 
et seq.) is amended by adding at the end the following: 
‘‘SEC. 257. MORTGAGE INSURANCE FOR CHILD CARE FA-
CILITIES IN THE GULF COAST. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) CHILD CARE FACILITY.—The term ‘child 
care facility’— 
‘‘(A) means a public or private facility 
that— 
‘‘(i) has as its purpose the care and 
development of— 
‘‘(I) children who are less than 
16 years of age; or 
‘‘(II) school-age children and 
youth during non-school hours; and 
‘‘(ii) is operated in accordance with all 
applicable State and local laws and regula-
tions; and 
‘‘(B) does not include any facility for 
school-age children that is primarily for use 
during normal school hours. 
‘‘(2) EQUIPMENT.—The term ‘equipment’ in-
cludes— 
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‘‘(A) machinery, utilities, and built-in 
equipment, and any necessary enclosure or 
structure to house them; and 
‘‘(B) any other items necessary for the 
functioning of a particular facility as a child 
care facility, including necessary furniture, 
books, and curricular and program materials. 
‘‘(3) FIRST MORTGAGE.—The term ‘first mort-
gage’— 
‘‘(A) means such classes of first liens as 
are commonly given to secure advances (includ-
ing advances during construction) on, or the 
unpaid purchase price of, real estate under the 
laws of the State in which the real estate is lo-
cated, together with the credit instrument or in-
struments (if any) secured thereby; and 
‘‘(B) includes any mortgage in the form of 
1 or more trust mortgages or mortgage inden-
tures or deeds of trust, securing notes, bonds, 
or other credit instruments, that, by the same 
instrument or by a separate instrument, creates 
a security interest in initial equipment, whether 
or not attached to the realty. 
‘‘(4) MORTGAGE.—The term ‘mortgage’ means 
a first mortgage on real estate in fee simple, or on 
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the interest of either the lessor or lessee thereof 
under a lease having a period of not less than 7 
years to run beyond the maturity date of the mort-
gage. 
‘‘(5) MORTGAGOR.—The term ‘mortgagor’ has 
the meaning given the term in section 207(a). 
‘‘(b) INSURANCE OF MORTGAGES.—In order to facili-
tate the establishment and rehabilitation of child care fa-
cilities, the Secretary may— 
‘‘(1) insure a mortgage that is secured by a 
property or project that is— 
‘‘(A) a new child care facility, including a 
new addition to an existing child care facility 
(regardless of whether the existing facility is 
being rehabilitated), that meets the require-
ments of subsection (c); or 
‘‘(B) a substantially rehabilitated child 
care facility, including equipment to be used in 
the operation of the facility, that meets the re-
quirements of subsection (c); and 
‘‘(2) make a commitment to insure any mort-
gage described in paragraph (1) before the date of 
execution or disbursement of the mortgage. 
‘‘(c) TERMS AND CONDITIONS.— 
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‘‘(1) ELIGIBLE CHILD CARE FACILITIES.—Each 
mortgage insured under this section shall be secured 
by a child care facility that meets the following re-
quirements: 
‘‘(B) LOCATION IN GULF COAST.—The fa-
cility is located, or to be located, in an area for 
which the President declared that a major dis-
aster exists, in accordance with section 401 of 
the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5170), as 
a consequence of Hurricane Katrina or Rita of 
2005. 
‘‘(A) COMPLIANCE
WITH
STANDARDS.— 
The facility complies with any laws, standards, 
and requirements applicable 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 located. 
‘‘(2) APPROVED MORTGAGOR.— 
‘‘(A) IN
GENERAL.—Each mortgage in-
sured under this section shall be executed by a 
mortgagor approved by the Secretary. 
‘‘(B) REGULATION.—The Secretary may— 
‘‘(i) require an approved mortgagor 
who executes a mortgage under subpara-
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graph (A) to be regulated with respect to 
charges and methods of financing and, if 
the mortgagor is a corporate entity, with 
respect to capital structure and rate of re-
turn; and 
‘‘(ii) as an aid to the regulation of any 
mortgagor under clause (i), make such 
contracts with and acquire for not more 
than $100 such stock or interest in such 
mortgagor as the Secretary considers to be 
necessary. 
‘‘(C) STOCK OR INTEREST.—Any stock or 
interest purchased under subparagraph (B)(ii) 
shall be— 
‘‘(i) paid for out of the General Insur-
ance Fund; and 
‘‘(ii) redeemed by the mortgagor at 
par upon the termination of all obligations 
of the Secretary under the insurance. 
‘‘(3) PRINCIPAL OBLIGATION.—Each mortgage 
insured under this section shall involve a principal 
obligation in an amount not to exceed 90 percent of 
the estimated value of the property or project, or 95 
percent of the estimated value of the property or 
project in the case of a mortgagor that is a private 
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nonprofit corporation or association (as defined pur-
suant to section 221(d)(3)), including— 
‘‘(A) equipment to be used in the operation 
of the facility when the proposed improvements 
are completed and the equipment is installed; or 
‘‘(B) a solar energy system (as defined in 
subparagraph (3) of the last paragraph of sec-
tion 2(a)) or residential energy conservation 
measures (as defined in subparagraphs (A) 
through (G) and (I) of section 210(11) of the 
National Energy Conservation Policy Act), in 
cases in which the Secretary 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. 
‘‘(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 40 
years; and 
‘‘(C) bear interest at such rate as may be 
agreed upon by the mortgagor and the mort-
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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-
sections to section 207 shall be construed, for pur-
poses of mortgage insurance under this section, to 
refer to this section. 
‘‘(d) MORTGAGE INSURANCE
FOR FIRE SAFETY 
EQUIPMENT LOANS.— 
‘‘(1) AUTHORITY.—The Secretary may, upon 
such terms and conditions 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 facilities to provide 
for the purchase and installation of fire safety equip-
ment necessary for compliance with the 1967 edition 
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of the Life Safety Code of the National Fire Protec-
tion Association (or any subsequent 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 estimate by the Sec-
retary of the reasonable cost of the equipment 
fully installed; 
‘‘(B) bear interest at such rate as may be 
agreed upon by the mortgagor and the mort-
gagee; 
‘‘(C) have a maturity date satisfactory to 
the Secretary; 
‘‘(D) be made by a financial institution or 
other mortgagee approved by the Secretary as 
eligible for insurance under section 2 or a mort-
gagee approved under section 203(b)(1); 
‘‘(E) comply with other such terms, condi-
tions, and restrictions as the Secretary may 
prescribe; and 
‘‘(F) be made with respect to a child care 
facility for which a certification of compliance 
has been issued by the Secretary under section 
258(c) during the 12-month period preceding 
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the date on which the commitment to insure is 
issued under this subsection. 
‘‘(3) INSURANCE REQUIREMENTS.— 
‘‘(A) SECTION
2.—Subsections (c), (d), 
and (h) of section 2 shall apply to any loan in-
sured under this subsection, except that all ref-
erences in such subsections to ‘this section’ or 
‘this title’ shall be construed, for purposes of 
this subsection, to refer to this subsection. 
‘‘(B) SECTION 220.—Paragraphs (5), (6), 
(7), (9), and (10) of section 220(h) shall apply 
to any loan insured under this subsection, ex-
cept that all references in such paragraphs to 
home improvement loans shall be construed, for 
purposes of this subsection, to refer to loans 
under this subsection. 
‘‘(e) SCHEDULES AND DEADLINES.—The Secretary 
shall establish schedules and deadlines for the processing 
and approval (or provision of notice of disapproval) of ap-
plications for mortgage insurance under this section. 
‘‘(f) LIMITATION ON INSURANCE AUTHORITY.— 
‘‘(1) TERMINATION.—No mortgage may be in-
sured under this section or section 223(h) after De-
cember 30, 2008, except pursuant to a commitment 
to insure issued on or before such date. 
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‘‘(2) AGGREGATE PRINCIPAL AMOUNT LIMITA-
TION.— 
‘‘(A) IN GENERAL.—The aggregate prin-
cipal amount of mortgages for which the Sec-
retary enters into commitments to insure under 
this section or section 223(h) on or before the 
date described in paragraph (1) may not exceed 
$100,000,000. 
‘‘(B) REPORT.—If, on the date described 
in paragraph (1), the aggregate insurance au-
thority provided under this paragraph has not 
been fully used, the Secretary of the Treasury 
shall submit to Congress a report evaluating the 
need for continued mortgage insurance under 
this section. 
‘‘(g) NONDISCRIMINATION REQUIREMENT.— 
‘‘(1) IN GENERAL.—A child care facility receiv-
ing assistance under this title may not discriminate 
on the basis of race, color, or national origin (to the 
extent provided in title VI of the Civil Rights Act of 
1964 (42 U.S.C. 2000d et seq.)), religion (subject to 
subparagraph (B)), national origin, sex (to the ex-
tent provided in title IX of the Education Amend-
ments of 1972 (20 U.S.C. 1681 et seq.)), or dis-
ability (to the extent provided in section 504 of the 
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Rehabilitation Act of 1973 (29 U.S.C. 794)), under 
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— 
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‘‘(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 $100,000. 
‘‘(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 
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‘‘(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 
$10,000,000 for fiscal year 2006, 2007, and 2008, to re-
main available until expended, of which not more than 3 
percent may be used for loans under subsection (i).’’. 
SEC. 5. INSURANCE FOR MORTGAGES FOR ACQUISITION OR 
REFINANCING DEBT OF EXISTING CHILD 
CARE FACILITIES IN THE GULF COAST. 
(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 IN THE 
GULF COAST.— 
‘‘(1) DEFINITIONS.—In this subsection, the 
terms that are defined in section 257(a) have the 
same meanings as provided 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— 
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‘‘(A) the purchase or refinancing of an ex-
isting child care facility that is located in an 
area for which the President declared that a 
major disaster exists, in accordance with section 
401 of the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. 
5170), as a consequence of Hurricane Katrina 
or Rita of 2005; 
‘‘(B) the purchase of a structure located in 
such an area to serve as a child care facility; or 
‘‘(C) the refinancing of existing debt of an 
existing child care facility located in such an 
area. 
‘‘(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 complies with any laws, 
standards, and requirements applicable to such 
facilities under the laws of the State, munici-
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pality, or other unit of general local government 
in which the facility is or is to be located. 
‘‘(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 complies with any laws, 
standards, and requirements applicable to such 
facilities under the laws of the State, munici-
pality, or other unit of general local government 
in which the facility is or is to be located. 
‘‘(5) LIMITATION ON INSURANCE AUTHORITY.— 
The authority of the Secretary to enter into commit-
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ments to insure mortgages under this subsection is 
subject to section 257(f).’’. 
SEC. 6. 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 on new and rehabilitated child care fa-
cilities and mortgages for acquisition and refi-
nancing debt of existing child care facilities, includ-
ing 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, particularly facilities located in 
areas for which the President declared that a major 
disaster exists, in accordance with section 401 of the 
Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5170), as a consequence 
of Hurricane Katrina or Rita of 2005, or would 
lower development costs of such facilities; and 
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(3) the extent to which such a market or other 
activities to provide credit enhancement for loans for 
child care facilities, particularly for facilities located 
in the areas referred to in paragraph (2), is needed 
to meet the demand for such facilities. 
(b) REPORT.—Not later than 1 year 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. 7. 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 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; 
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