To improve access by working families to affordable early education programs, to increase the number of employers offering an early education benefit to employees, and to develop innovative models of public-private partnerships in the provision of affordable early education.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Early Education Employee Benefit Act 
of 2002''.

SEC. 2. AUTHORITY TO MAKE GRANTS.

    The Secretary of Health and Human Services may make grants on a 
competitive basis, and payable during a period of not less than 2 years 
and not more than 5 years, to eligible States and political 
subdivisions of States--
            (1) to establish innovative partnerships with private 
        partners to reduce the cost incurred by employees and union 
        members to obtain early education (including child care, 
        preschool, and other early childhood programs), or
            (2) to assist private partners to pay part of the cost of 
        acquiring, building, and renovating physical premises to be 
        used as new early education facilities.

SEC. 3. ELIGIBILITY OF STATES AND POLITICAL SUBDIVISIONS OF STATES TO 
              RECEIVE GRANTS.

    To be eligible to receive a grant under section 2, a State or a 
political subdivision of a State shall submit to the Secretary an 
application at such time, in such form, and containing such information 
as the Secretary may require by rule, including--
            (1) the agency designated by the State, or the political 
        subdivision of a State, to serve as the lead agency that will 
        administer such grant,
            (2) a description of the program such applicant intends to 
        carry out with such grant,
            (3) a description of the source, and increasing annual 
        amount, of the funds such applicant will use to pay the non-
        Federal share of the cost to carry out such program during a 
        period not less than 2 years and not more than 5 years, and
            (4) an agreement that such State or such political 
        subdivision--
                    (A) will contribute (from non-Federal funds) to 
                carry out such program, an amount equal to 50 percent 
                of the amount of such grant,
                    (B) will not require a private partner to offer on-
                site early education as a condition for participation 
                in an Early Education Benefit Agreement, and
                    (C) will use such grant to supplement, not 
                supplant, spending by such State, such political 
                subdivision, and private partners to improve access to 
                and enhance the quality of early education.

SEC. 4. SELECTION OF APPLICANTS TO RECEIVE GRANTS.

    In making grants under this Act, the Secretary shall give priority 
to eligible applicants that--
            (1) are, in the judgment of the Secretary, most likely to 
        increase the number of employees and members who receive an 
        Early Education Benefit through their employers and unions,
            (2) propose innovative public-private partnerships that 
        will carry out early education programs that are likely to be 
        replicated,
            (3) are likely to be sustainable beyond the period during 
        which such grant is expended,
            (4) are developed in consultation with child care resource 
        and referral agencies and networks, and with employers and 
        unions,
            (5) demonstrate the intention and ability to provide--
                    (A) with funds to be expended for the use described 
                in section 5(1), Early Education Benefits through Early 
                Education Benefit Agreements to a significant number of 
                employees of private employers with fewer than 50 
                employees, or
                    (B) with funds to be expended for the use described 
                in section 5(2), Early Education Start-up Grants to 
                private employers with fewer than 50 employees, and
                    (6) have experience working on early childhood 
                issues and working in partnership with the business 
                community, or have an agreement to implement the 
                program funded by a grant made under section 2 through 
                a nonprofit entity with such experience.

SEC. 5. USES OF FUNDS.

    A recipient of a grant made under section 2 shall use such grant--
            (1) to enter into Early Education Benefit Agreements to 
        provide Early Education Benefits, or
            (2) to provide funds to private partners to establish new 
        early education facilities,
except that not more than 5 percent of such grant may be used to pay 
administrative costs incurred by such recipient to carry out this Act, 
including providing outreach to private partners.

SEC. 6. EARLY EDUCATION BENEFIT AGREEMENTS.

    (a) Eligibility.--To be eligible to receive funds to be used for 
the purpose specified in section 5(1) from a grant made under section 
2, a private partner, or consortia of private partners, shall enter 
into an Early Education Benefit Agreement with the recipient of such 
grant that includes the following:
            (1) An assurance that such private partner, or such 
        consortia, will pay not less than--
                    (A) \1/3\ of the cost of such Early Education 
                Benefit, or
                    (B) \1/5\ of such cost if such private partner, or 
                such consortia, creates a new early education facility 
                that--
                            (i) serves children less than 2 years of 
                        age or children with disabilities, or
                            (ii) is available during nontraditional 
                        work hours.
            (2) An assurance that such private partner, or such 
        consortia, shall offer such Early Education Benefit on a 
        priority basis to such employees or such members who have lower 
        incomes if such Early Education Benefit is not offered to all 
        such employees or all such members.
            (3) An assurance that if such private partner, or such 
        consortia, requires that such Early Education Benefit received 
        by an employee or member be expended at a limited number of 
        sites where early education (including child care, preschool, 
        and other early childhood programs) is provided, then 
there shall be at least 1 provider of early education (including child 
care, preschool, and other early childhood programs) for which such 
Early Education Benefit may be expended, that is--
                    (A) located at or near the residence or place of 
                employment of such employee or such member, and
                    (B) accredited by the National Association for the 
                Education of Young Children or the National Association 
                for Family Child Care, or taking steps to obtain such 
                accreditation.
            (4) An assurance that early education paid for in whole or 
        in part by such Early Education Benefit will be provided by a 
        provider that is licensed or regulated by the State.
            (5) A detailed description of--
                    (i) the nature of the Early Education Benefit to be 
                provided,
                    (ii) the respective financial contributions of such 
                private partner, or such consortia, and such grant 
                recipient, and the procedures by which such 
                contributions will be made,
                    (iii) the number of employees or members expected 
                to receive the Early Education Benefit provided under 
                such Agreement, and
                    (iv) the estimated total cost of such Benefit to 
                such private partner (or such consortia), such grant 
                recipient, and such employees or such members.
    (b) Selection of Private Partners To Enter Into Early Education 
Benefit Agreements.--In selecting private partners with which to enter 
into Early Education Benefit Agreements, a recipient of a grant made 
under section 2 shall give priority to--
            (1) private partners that will make larger financial 
        contributions to the Early Education Benefit,
            (2) private partners with fewer employees or members,
            (3) private partners that will make an Early Education 
        Benefit available to employees and members on a sliding scale 
        inversely proportional to their level of earned income, and
            (4) private partners that have a history of personnel 
        policies and practices that enable their employees or their 
        members to balance work commitments with family obligations.

SEC. 7. EARLY EDUCATION START-UP GRANTS.

    (a) Eligibility To Receive Funds.--To be eligible to receive funds 
for the use specified in section 5(2) from a grant made under section 
2, a private partner shall agree--
            (1) to subsidize attendance at the proposed new early 
        education facility for children of lower-paid employees or 
        members, and
            (2) to pay not less than \1/3\ of the cost of acquiring, 
        building, and renovating physical premises to be used as such 
        facility.
    (b) Selection of Private Partners To Receive Funds.--In providing 
funds to private partners from a grant received for the use specified 
in section 5(2), a recipient of a grant made under section 2 shall give 
priority to--
            (1) private partners that will create a facility to provide 
        early education that--
                    (A) serves children less than 2 years of age or 
                children with disabilities, or
                    (B) is available during nontraditional hours during 
                which their parents are employed,
            (2) private partners that will operate such a facility that 
        is accredited, has a low ratio of children to adults, or 
        demonstrates other facts that show such facility offers an 
        early education program of high quality,
            (3) private partners that will pay with nongovernmental 
        funds a larger share of the cost of the use for which the Early 
        Education Start-up Grant funds will be expended,
            (4) private partners that have fewer employees or members, 
        and
            (5) private partners that have a history of personnel 
        policies and practices that enable their employees or members 
        to balance work commitments with family obligations.

SEC. 8. REPORTS.

    (a) Reports by Grantees.--The Secretary shall issue rules that 
require each recipient of a grant made under section 2 to submit 
annually to the Secretary a report that includes the following 
information for the fiscal year for which such report is submitted:
            (1) The number of Early Education Benefit Agreements 
        participated in and Start-Up Grants made.
            (2) Information about the private partners, including the 
        industry of which they are a part and their size.
            (3) Information about the number of employees who are both 
        offered and are receiving Early Education Benefits as a result 
        of such grant,including the number and average incomes of 
        employees who are receiving Early Education Benefits and the 
        number of employees who were offered and declined Early 
        Education Benefits.
            (4) Information about the amount of private spending on 
        Early Education Benefits and on the investment in new early 
        education facilities leveraged by the grants.
            (5) If appropriate and available, information about whether 
        and at what level private partners have continued to provide 
        Early Education Benefits after the conclusion of the grantee's 
        participation in an Early Education Benefit Agreement.
    (b) Reports by the Secretary.--The Secretary shall submit to the 
Congress biennially a report that includes the following information 
for the period of 2 fiscal years for which such report is submitted:
            (1) Summaries of the reports received under subsection (a) 
        by the Secretary for such period.
            (2) A description of the implementation of this Act, and 
        its impact on employees' access to early education programs for 
        their children, during such period.

SEC. 9. DEFINITIONS.

    For purposes of this Act:
            (1) Child.--The term ``child'' means an individual who is 
        less that 6 years of age.
            (2) Early Education Benefit.--The term ``Early Education 
        Benefit'' means assistance, in cash or in kind, to pay any part 
        of the cost incurred by employees and union members to obtain 
        early education (including child care, preschool, and other 
        early childhood programs) for their children.
            (3) Early Education Benefit Agreement.--The term ``Early 
        Education Benefit Agreement'' means a contract under which a 
        recipient of a grant under section 2 and a private partner that 
        receives from such recipient funds provided for the use 
        described in section 5(1) agree to provide jointly an Early 
        Education Benefit for children of the members or employees of 
        such private partner.
            (4) Private Partner.--The term ``private partner'' means a 
        private employer, labor union, and consortia of employers or 
        labor unions.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this Act such 
sums as may be necessary for fiscal years 2003 through 2007.

Summary: Early Education Employee Benefit Act of 2002 - Authorizes the Secretary of Health and Human Services (HHS) to make competitive matching grants to States and local governments to: (1) enter Early Education Benefit Agreements with private partners to provide part of the cost of Early Education Benefits, which reduce costs incurred by employees and union members to obtain early education (including child care, preschool, and other early childhood programs); or (2) make Early Education Start-Up Grants to assist private partners to pay part of the cost of acquiring, building, and renovating physical premises to be used as new early education facilities, if such partners subsidize attendance at those facilities for children of lower-paid employees or union members.