[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3524 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3524

  To amend the Child Care and Development Block Grant Act of 1990 to 
 provide access to early care and education so that families can work 
            and children can receive quality custodial care.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 19, 2001

 Mr. George Miller of California (for himself, Mr. Andrews, Mr. Owens, 
 Mr. Moran of Virginia, Mr. Hinojosa, Ms. Lee, Mr. Frank, Ms. Woolsey, 
  Mr. Green of Texas, Mr. Kildee, Ms. McCollum, Mr. Abercrombie, Mr. 
 McGovern, Ms. DeLauro, Mr. Nadler, Mr. Brown of Ohio, Mr. Stark, and 
  Mrs. McCarthy of New York) introduced the following bill; which was 
   referred to the Committee on Education and the Workforce, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Child Care and Development Block Grant Act of 1990 to 
 provide access to early care and education so that families can work 
            and children can receive quality custodial care.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Child Development 
and Family Employment Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
             TITLE I--CHILD CARE SUBSIDIES DEVELOPMENT FUND

Sec. 101. Purpose and goals.
Sec. 102. Authorization of appropriations.
Sec. 103. State plan requirements.
Sec. 104. Payment rates.
Sec. 105. Child care accountability improvements.
Sec. 106. Incentive grants to States.
Sec. 107. Administration and enforcement.
Sec. 108. Reports.
Sec. 109. Amounts reserved.
Sec. 110. Definitions.
Sec. 111. Conforming amendments.
                TITLE II--CHILD CARE QUALITY IMPROVEMENT

Sec. 201. Short title.
Sec. 202. Findings and purpose.
Sec. 203. Definitions.
Sec. 204. Funds for child care provider development and retention 
                            grants and for child care provider 
                            scholarships.
Sec. 205. Allotments to States.
Sec. 206. Application and plan.
Sec. 207. Child care provider development and retention grant program.
Sec. 208. Child care provider scholarship program.
Sec. 209. Annual report.
Sec. 210. Authorization of appropriations.

             TITLE I--CHILD CARE SUBSIDIES DEVELOPMENT FUND

SEC. 101. PURPOSE AND GOALS.

    (a) Purpose and Goals.--Section 658A of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9801 note) is amended--
            (1) in the heading by striking ``and goals'' and inserting 
        ``, purpose, and goals'';
            (2) in subsection (b)--
                    (A) in subparagraph (4) by striking ``and'' at the 
                end;
                    (B) in subparagraph (5) by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding the end the following:
            ``(6) to assist States to provide access to high quality 
        child care that promotes early learning and facilitates school 
        readiness.''; and
                    (D) by redesignating such subsection as subsection 
                (c); and
            (3) by inserting after subsection (a) the following:
    ``(b) Statement of Purpose.--It is the purpose of this subchapter 
to provide low-income families access to safe, quality child care so 
that families can work and young children can receive the high quality 
early care and learning they need to start school ready to learn and 
school-age children can receive after-school care and enrichment.''.

SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

    (a) Child Care and Development Block Grant Act of 1990.--Section 
658B of the Child Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858) is amended to read as follows:

``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS; AMOUNTS AVAILABLE FOR 
              INCENTIVE GRANTS TO IMPROVE QUALITY OF CHILD CARE 
              SERVICES.

    ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this subchapter--
            ``(1) $4,000,000,000 for each of the fiscal year 2003;
            ``(2) $5,000,000,000 for each of the fiscal year 2004;
            ``(3) $6,000,000,000 for each of the fiscal year 2005;
            ``(4) $7,000,000,000 for each of the fiscal year 2006; and
            ``(5) $8,000,000,000 for each of the fiscal year 2007.
    ``(b) Amounts Available for Incentive Grants To Improve Quality of 
Child Care Services.--Of the amounts made available under section 
418(c)(2) of the Social Security Act (42 U.S.C. 618(c)(2)) to carry out 
activities under this subchapter--
            ``(1) $500,000,000 for fiscal year 2003;
            ``(2) $500,000,000 for fiscal year 2004;
            ``(3) $500,000,000 for fiscal year 2005;
            ``(4) $750,000,000 for fiscal year 2006; and
            ``(5) $750,000,000 for fiscal year 2007;
shall be used to make grants under section 658H after reserving the 
amounts required by section 658O(a)(3).''.
    (b) Social Security Act.--Section 418 of the Social Security Act 
(42 U.S.C. 618) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1) by inserting ``and subsection 
                (c)(2)'' after ``paragraph (3)''; and
                    (B) in paragraph (3) by striking subparagraphs (A) 
                through (F) and inserting the following:
                    ``(A) $4,217,000,000 for fiscal year 2003;
                    ``(B) $5,317,000,000 for fiscal year 2004;
                    ``(C) $6,417,000,000 for fiscal year 2005;
                    ``(D) $7,517,000,000 for fiscal year 2006; and
                    ``(E) $8,617,000,000 for fiscal year 2007.''; and
            (2) in subsection (c)--
                    (A) by inserting ``(1)'' before 
                ``Notwithstanding'';
                    (B) by inserting ``and except as provided in 
                paragraph (2)'' after ``law''; and
                    (C) by adding at the end the following:
    ``(2) Notwithstanding any other provision of law, from the amounts 
appropriated under subsection (a)(3) for fiscal years 2003 through 
2007, the Secretary shall carry out section 658B(b) of the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 9858(b)).''.

SEC. 103. STATE PLAN REQUIREMENTS.

    Section 658E(c)(2) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858c(c)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (ii) by striking ``and'' at the end;
                    (B) in clause (iii) by adding ``and'' at the end; 
                and
                    (C) by inserting after clause (iii) the following:
                            ``(iv) in order to help ensure that parents 
                        have the freedom to choose quality center-based 
                        child care services, the State shall make 
                        significant effort to develop contracts with 
                        accredited child care providers in low-income 
                        and rural communities;'';
            (2) by amending subparagraph (D) to read as follows:
                    ``(D) Consumer education information.--Certify that 
                the State will collect and disseminate to parents of 
                eligible children and the general public, consumer 
                education information that will promote informed child 
                care choices, and describe how the State will inform 
                parents receiving assistance under a State program 
                funded under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.) and other low-income 
                parents about eligibility for assistance under this 
                subchapter.'';
            (3) by amending subparagraph (H) to read as follows:
                    ``(H) Meeting the needs of certain populations.--
                Demonstrate the manner in which the State will meet the 
                specific child care needs of families who are receiving 
                assistance under a State program under part A of title 
                IV of the Social Security Act, families who are 
                attempting through work activities to transition off of 
                such assistance program, families with children with 
                special needs, low-income families not receiving cash 
                assistance under a State program under part A of title 
                IV of the Social Security Act, and families that are at 
                risk of becoming dependent on such assistance.''; and
            (4) by adding at the end the following:
                    ``(I) Availability of staff.--Describe how the 
                State will ensure that staff from the lead agency 
                described in section 658D will be available, at the 
                offices of the State program funded under part A of 
                title IV of the Social Security Act, to provide 
                information about eligibility for assistance under this 
                subchapter and to assist individuals in applying for 
                such assistance.
                    ``(J) Eligibility redetermination.--Demonstrate 
                that each child that receives assistance under this 
                subchapter in the State will receive such assistance 
                for not less than 1 year before the State redetermines 
                the eligibility of the child under this subchapter.
                    ``(K) Establishment of training requirements.--
                Certify that there are training requirements in effect 
                within the State, under State or local law, that are 
                designed to support the learning and development of 
                children and that are applicable to all child care 
                providers that provide services for which assistance is 
                made available under this subchapter. Such requirements 
                shall include requirements relating to preservice 
                training in childhood development. Such training shall 
                be relevant to the ages of the children for whom such 
                provider delivers care.
                            ``(i) For States that do not presently 
                        require preservice training in child 
                        development meeting the requirements specified 
                        in this subparagraph--
                                    ``(I) the State shall submit as 
                                part of its plan, how it will ensure 
                                that this subparagraph is implemented 
                                not later than 1 year after the date of 
                                the enactment of Child Development and 
                                Family Employment Act of 2002; and
                                    ``(II) the State may elect for a 
                                child care provider who is not required 
                                to be registered, licensed, or 
                                regulated but who must comply with 
                                section 658E(c)(F), to consider 
                                inservice training in child development 
                                that is completed not later than 60 
                                days after a child's first day of 
                                enrollment with such provider, as 
                                compliance with this subparagraph.
                            ``(ii) Nothing in clause (i) shall be 
                        considered to preempt or supersede any State or 
                        local law that requires child care providers to 
                        have preservice training in child development.
                    ``(L) Insuring the safety of children.--Certify 
                that there are requirements in effect within the State, 
                under State or local law, that require that evaluators 
                from an appropriate State or local agency make not less 
                than 2 unannounced visits annually to each child care 
                provider in the State that provides services for which 
                assistance is made available under this subchapter. A 
                State may elect to exempt from this subparagraph child 
                care providers who are not required to be licensed or 
                regulated but who are required to comply with 
                subparagraph (F).
                    ``(M) Supplement not supplant.--Provide assurances 
                that the amounts paid to a  State under this subchapter 
shall be used to supplement and not supplant other State or local funds 
expended or otherwise available to support payments for child care 
assistance and to increase the quality of available child care for 
eligible families under this subchapter.''.

SEC. 104. PAYMENT RATES.

    Section 658E(c)(4)(A) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858c(c)(4)(A)) is amended--
            (1) by striking ``such access'' and inserting ``equal 
        access to comparable quality and types of services''; and
            (2) by adding at the end the following:
                            ``(i) Market rate surveys (that reflect 
                        variations in the cost of child care services 
                        by locality) shall be conducted by the State 
                        not less often than at 2-year intervals, and 
                        the results of such surveys shall be used to 
                        implement payment rates that ensure equal 
                        access to comparable services as required by 
                        this subparagraph.
                            ``(ii) Payment rates shall be adjusted at 
                        intervals between such surveys to reflect 
                        increases in the cost of living, in such manner 
                        as the Secretary may specify.
                            ``(iii) Payment rates shall reflect 
                        variations in the cost of providing child care 
                        services for children of different ages and 
                        providing different types of care.''.

SEC. 105. CHILD CARE ACCOUNTABILITY IMPROVEMENTS.

    Section 658G of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858e) is amended--
            (1) by amending the heading to read as follows:

``SEC. 658G. CHILD CARE ACCOUNTABILITY IMPROVEMENTS.'',

            (2) by amending the matter following the section heading to 
        read as follows:
    ``(a) Activities To Improve the Quality of Child Care.--
            ``(1) In general.--A State that receives funds to carry out 
        this subchapter shall reserve and use not less than 16 percent 
        of the funds for improvements in the quality of child care 
        services provided in the State and in political subdivisions of 
        the State.
                    ``(A) Not less than 35 percent of the funds 
                reserved under this paragraph shall be used for 
                activities that are designed to increase the quality 
                and supply of child care services for children from 
                birth through 3 years of age.
                    ``(B) Funds reserved under this paragraph shall be 
                used for 1 or more activities consisting of--
                            ``(i) providing directly, or providing 
                        financial assistance to private nonprofit 
                        organizations or public entities (including 
                        units of general purpose local government) for 
                        the development, establishment, expansion, 
                        operation, and coordination of, child care 
                        resource and referral services;
                            ``(ii) making grants or providing loans to 
                        eligible child care providers to assist the 
                        providers in meeting applicable State and local 
                        child care standards and recognized 
                        accreditation standards;
                            ``(iii) improving the ability of State or 
                        local government, as applicable, to monitor 
                        compliance with, and to enforce, State and 
                        local licensing and regulatory requirements 
                        (including registration requirements) 
                        applicable to child care providers;
                            ``(iv) providing training and technical 
                        assistance in areas relating to the provision 
                        of child care services, such as training 
                        relating to promotion of health and safety, 
                        promotion of good nutrition, provision of first 
                        aid, recognition of communicable diseases, 
                        child abuse detection and prevention, and care 
                        of children with special needs;
                            ``(v) improving salaries and other 
                        compensation paid to full-time and part-time 
                        staff who provide child care services for which 
                        assistance is made available under this 
                        subchapter;
                            ``(vi) making grants or providing financial 
                        assistance to eligible child care providers for 
                        training in child development and early 
                        education;
                            ``(vii) making grants or providing 
                        financial assistance to eligible child care 
                        providers to support delivery of early 
                        education and child development activities;
                            ``(viii) making grants or providing 
                        financial assistance to eligible child care 
                        providers to make minor renovations to such 
                        providers' physical environments that enhance 
                        the quality of the child care services they 
                        provide;
                            ``(ix) improving and expanding the supply 
                        of child care services for children with 
                        special needs;
                            ``(x) supporting the system described in 
                        paragraph (2); and
                            ``(xi) other activities that can be 
                        demonstrated to increase the quality of child 
                        care services and parental choice.
            ``(2) Child care resource and referral system.--The State 
        shall use a portion of the funds reserved under paragraph (1) 
        to support a system of local child care resource and referral 
        organizations coordinated by a statewide-led child care 
        resource and referral organization. The local child care 
        resource and referral organizations shall--
                    ``(A) provide parents in the State with information 
                and support concerning child care options in their 
                communities;
                    ``(B) collect data on the supply of and demand for 
                child care in political subdivisions within the State;
                    ``(C) develop links with the business community or 
                other organizations involved in providing child care 
                services;
                    ``(D) increase the supply and improve the quality 
                of child care in the State and in political 
                subdivisions in the State;
                    ``(E) hire specialists in health, mental health, 
                early literacy, special needs, and infant and toddler 
                care to support or supplement community child care 
                providers; or
                    ``(F) provide training or facilitate connections 
                for training to community child care providers.''.

SEC. 106. INCENTIVE GRANTS TO STATES.

    The Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
9858 et seq.) is amended by inserting after section 658G the following:

``SEC. 658H. INCENTIVE GRANTS TO STATES.

    ``(a) Authority.--
            ``(1) In general.--The Secretary shall use the amount made 
        available under section 658B(b) for a fiscal year to make 
        grants to eligible States in accordance with this section.
            ``(2) Annual payments.--The Secretary shall make an annual 
        payment for such a grant to each eligible State out of the 
        allotment for that State determined under subsection (c).
    ``(b) Eligible States.--
            ``(1) In general.--In this section, the term `eligible 
        State' means a State that--
                    ``(A) has conducted a survey of the market rates 
                for child care services in the State within the 2 years 
                preceding the date of the submission of an application 
                under paragraph (2); and
                    ``(B) submits an application in accordance with 
                paragraph (2).
            ``(2) Application.--
                    ``(A) In general.--To be eligible to receive a 
                grant under this section, a State shall submit an 
                application to the Secretary at such time, in such 
                manner, and accompanied by such information, in 
                addition to the information required under subparagraph 
                (B), as the Secretary may require.
                    ``(B) Information required.--Each application 
                submitted for a grant under this section shall--
                            ``(i) detail the methodology and results of 
                        the State market rates survey conducted 
                        pursuant to paragraph (1)(A);
                            ``(ii) describe the State's plan to 
                        increase payment rates from the initial 
                        baseline determined under clause (i);
                            ``(iii) describe how the State will 
                        increase payment rates in accordance with the 
                        market survey results, for all types of child 
                        care providers who provide services for which 
                        assistance is made available under this 
                        subchapter;
                            ``(iv) describe how rates are set to 
                        reflect the variations in the cost of providing 
                        care for children of different ages and 
                        different types of care; and
                            ``(v) describe how the State will 
                        prioritize increasing payment rates for care of 
                        higher-than-average quality, such as care by 
                        accredited providers, care that includes the 
                        provision of comprehensive services, care 
                        provided at nonstandard hours, care for 
                        children with special needs, care in low-income 
                        and rural communities, and care of a type that 
                        is in short supply.
            ``(3) Continuing eligibility requirement.--The Secretary 
        may make an annual payment under this section to an eligible 
        State only if--
                    ``(A) the Secretary determines that the State has 
                made progress, through the activities assisted under 
                this subchapter, in maintaining increased payment 
                rates; and
                    ``(B) at least once every 2 years, the State 
                conducts an update of the survey described in paragraph 
                (1)(A).
            ``(4) Requirement of matching funds.--
                    ``(A) In general.--To be eligible to receive a 
                grant under this section, the State shall agree to make 
                available State contributions from State sources toward 
                the costs of the activities to be carried out by a 
                State pursuant to subsection (d) in an amount that is 
                not less than 20 percent of such costs.
                    ``(B) Determination of state contributions.--State 
                contributions shall be in cash. Amounts provided by the 
                Federal Government may not be included in determining 
                the amount of such State contributions.
    ``(c) Allotments to Eligible States.--The amount made available 
under section 658B(b) for a fiscal year shall be allotted among the 
eligible States in the same manner as amounts are allotted under 
section 658O(b).
    ``(d) Use of Funds.--An eligible State that receives a grant under 
this section shall use the funds received to significantly increase the 
payment rate for the provision of child care assistance in accordance 
with this subchapter up to the 150th percentile of the market rate 
survey described in subsection (b)(1)(A).
    ``(e) Evaluations and Reports.--
            ``(1) State evaluations.--Each eligible State shall submit 
        to the Secretary, at such time and in such form and manner as 
        the Secretary may require, information regarding the State's 
        efforts to increase payment rates and the impact increased 
        rates are having on the quality of, and accessibility to, child 
        care in the State.
            ``(2) Reports to congress.--The Secretary shall submit 
        biennial reports to Congress on the information described in 
        paragraph (1). Such reports shall include data from the 
        applications submitted under subsection (b)(2) as a baseline 
        for determining the progress of each eligible State in 
        maintaining increased payment rates.
    ``(f) Payment Rate.--In this section, the term `payment rate' means 
the rate of reimbursement to providers for subsidized child care.''.

SEC. 107. ADMINISTRATION, ENFORCEMENT, AND EVALUATION.

     Section 658I of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858g) is amended--
            (1) in the heading by striking ``and enforcement'' and 
        inserting ``, enforcement, and evaluation'';
            (2) in subsection (a)(3) by inserting before the period at 
        the end ``and including the establishment of a national 
        training and technical assistance center specializing in infant 
        and toddler care and their families''; and
            (3) by adding at the end the following:
    ``(c) Federal Administration and Evaluation Activities.--The 
Secretary shall--
            ``(1) establish a national data system through grants, 
        contracts or cooperative agreements to develop statistics on 
        the supply of, demand for, and quality of child care, early 
        education, and non-school-hours programs, including use of data 
        collected through child care resource and referral 
        organizations at the national, State, and local levels; and
            ``(2) prepare and submit to Congress an annual report on 
        the supply of, demand for, and quality of child care, early 
        education, and non-school-hours programs, using data collected 
        through State and local child care resource and referral 
        organizations and other sources.''.

SEC. 108. REPORTS.

    Section 658K(a) of the Child Care and Development Block Grant Act 
of 1990 (42 U.S.C. 9858i(a)) is amended--
            (1) in paragraph (1)(B)--
                    (A) in clause (ix) by striking ``and'' at the end;
                    (B) in clause (x) by adding ``and'' at the end; and
                    (C) by inserting after clause (x) the following:
                            ``(xi) whether the child care provider is 
                        accredited by a national or State accrediting 
                        body;''; and
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A) by 
                striking ``aggregate data concerning'';
                    (B) in subparagraph (D) by striking ``and'' at the 
                end;
                    (C) in subparagraph (E) by adding ``and'' at the 
                end; and
                    (D) by indenting the left margin of subparagraphs 
                (A) through (E) 2 ems to the right and redesignating 
                such subparagraphs as clauses (i) through (v), 
                respectively;
                    (E) by inserting after clause (v), as so 
                redesignated, the following:
                            ``(vi) findings from market rate surveys, 
                        disaggregated by the types of services provided 
                        and by the sub-State localities, as 
                        appropriate;''; and
                    (F) by inserting before clause (i), as so 
                redesignated, the following:
                    ``(A) information on how all of the funds reserved 
                under section 658G were allocated and spent, and 
                information on the effect of those expenditures, to the 
                maximum extent practicable; and
                    ``(B) aggregate date concerning--''.

SEC. 109. AMOUNTS RESERVED.

    Section 658O(a) of the Child Care and Development Block Grant Act 
of 1990 (42 U.S.C. 9858m(a)) is amended by adding at the end the 
following:
            ``(3) Administration.--The Secretary shall reserve not more 
        than 2 percent of the amount made available to carry out this 
        subchapter (including the amount made available under section 
        418(c)(2) of the Social Security Act) for each fiscal year to 
        carry out section 658I.''.

SEC. 110. DEFINITIONS.

    Section 658P(4)(C) of the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858n(4)(C)) is amended--
            (1) in clause (i) by striking ``or'' at the end;
            (2) in clause (ii) by striking the period and inserting ``; 
        or''; and
            (3) by adding at the end the following:
                            ``(iii) is a foster child.''.

SEC. 111. CONFORMING AMENDMENTS.

    The Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
9858 et seq.) is amended--
            (1) in section 658E(c)(3)--
                    (A) in subparagraph (B) by striking ``through (5) 
                of section 658A(b)'' and inserting ``through (6) of 
                section 658A(c)''; and
                    (B) in subparagraph (D) by striking ``1997 through 
                2002'' and inserting ``2003 through 2007'';
            (2) in section 658K(a)(2) by striking ``1997'' and 
        inserting ``2003''; and
            (3) in section 658L--
                    (A) by striking ``July 31, 1998'' and inserting 
                ``October 1, 2004'';
                    (B) by striking ``Economic and Educational 
                Opportunities'' and inserting ``Education and the 
                Workforce''; and
                    (C) by striking ``Labor and Human Resources'' and 
                inserting ``Health, Education, Labor, and Pensions''.

                TITLE II--CHILD CARE QUALITY IMPROVEMENT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Focus On Committed and Underpaid 
Staff for Children's Sake Act'' or as the ``FOCUS Act''.

SEC. 202. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) Research on early brain development and early childhood 
        demonstrates that the experiences children have and the 
        attachments children form early in life have a decisive, long-
        lasting impact on their later development and learning.
            (2) High-quality, developmentally appropriate child care 
        beginning in early childhood and continuing through the years 
        that children are in school improves the scholastic success and 
educational attainment of children, and the success and attainment 
persist into adulthood.
            (3) According to a growing body of research, the single 
        most important determinant of child care quality is the 
        presence of consistent, sensitive, well-trained, and well-
        compensated child care providers. However, child care programs 
        nationwide experience high turnover in teaching staff, fueled 
        by poor compensation and few opportunities for advancement.
            (4) Despite the important role child care providers can 
        play in early child development and learning, in 1999 the 
        average wage for a child care provider was $7.42 per hour, or 
        $15,430 annually. For full-time, full-year work, the average 
        annual wage for a child care provider was not much above the 
        1999 poverty line of $13,423 for a family consisting of a 
        parent and 2 children. Family child care providers earned even 
        less. The median weekly wage of a family child care provider in 
        1999 was $264, which equals an annual wage of $13,728.
            (5) To offer compensation that would be sufficient to 
        attract and retain qualified child care providers, child care 
        programs would have to charge parents fees that many parents 
        could not afford. For programs that serve low-income children 
        whose families qualify for Federal and State child care 
        subsidies, the reimbursement rates set by the State strongly 
        influence the level of compensation that staff receive. Current 
        reimbursement rates for center-based child care services and 
        family child care services are insufficient to recruit and 
        retain qualified child care providers and to ensure high-
        quality services for children.
            (6) As a result of low wages and limited benefits, many 
        child care providers do not work for long periods in the child 
        care field. Approximately 30 percent of all teaching staff 
        employed at child care centers leaves employment with a child 
        care center each year. Teachers leaving the profession are 
        being replaced by staff with less education and formal training 
        in early child development.
            (7) Child care providers, as well as the children, 
        families, and businesses that depend upon the providers, suffer 
        the consequences of inadequate compensation. This is true, with 
        few exceptions, for providers in all types of programs, 
        including subsidized and nonsubsidized programs, programs 
        offered by for-profit and nonprofit entities, and programs in 
        large and small child care settings.
            (8) Because of the severe nationwide shortage of qualified 
        staff available for employment by child care programs, several 
        States have recently initiated programs to improve the quality 
        of child care by increasing the training and compensation of 
        child care providers. Such programs encourage the training, 
        education, and increased retention of qualified child care 
        providers by offering financial incentives, including 
        scholarships and increases in compensation, that range from 
        $350 to $6,500 annually.
    (b) Purposes.--The purposes of this title are--
            (1) to establish the Child Care Provider Development and 
        Retention Grant Program and the Child Care Provider Scholarship 
        Program; and
            (2) to help children receive the high quality child care 
        and early education the children need for positive cognitive 
        and social development, by rewarding and promoting the 
        retention of committed, qualified child care providers and by 
        providing financial assistance to improve the educational 
        qualifications of child care providers.

SEC. 203. DEFINITIONS.

    In this title:
            (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 requirements applicable 
                to the child care services provided;
                    (B) a licensed or regulated family child care 
                provider that satisfies the State and local 
                requirements applicable to the child care services 
                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 requirements applicable 
                to the child care services provided.
            (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) In-kind contribution.--The term ``in-kind 
        contribution'' means payment of the costs of participation of 
        eligible child care providers in health insurance programs or 
        retirement programs.
            (5) 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).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (7) State.--The term ``State'' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, Guam, American Samoa, or the Commonwealth of the Northern 
        Mariana Islands.
            (8) Tribal organization.--The term ``tribal organization'' 
        has the meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).

SEC. 204. FUNDS FOR CHILD CARE PROVIDER DEVELOPMENT AND RETENTION 
              GRANTS AND FOR CHILD CARE PROVIDER SCHOLARSHIPS.

    (a) In General.--The Secretary may allot and distribute funds 
appropriated to carry out this title to eligible States and Indian 
tribes and tribal organizations to pay  for the Federal share of the 
cost of making grants under sections 207 and 208 to eligible child care 
providers.
    (b) Allotments.--The funds shall be allotted and distributed by the 
Secretary in accordance with section 205, 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 title.

SEC. 205. ALLOTMENTS TO STATES.

    (a) Amounts Reserved.--
            (1) Territories and possessions.--The Secretary shall 
        reserve not more than \1/2\ of 1 percent of the funds 
        appropriated to carry out this title for any fiscal year for 
        distribution to Guam, American Samoa, and the Commonwealth of 
        the Northern Mariana Islands, to be allotted in accordance with 
        their respective needs, to plan and carry out programs and 
        activities to encourage child care providers to improve their 
        qualifications and to retain qualified child care providers in 
        the child care field.
            (2) Indian tribes and tribal organizations.--The Secretary 
        shall reserve not more than 3 percent of the funds appropriated 
        to carry out this title for any fiscal year for payments to 
        Indian tribes and tribal organizations with applications 
        approved under subsection (c), to plan and carry out programs 
        and activities to encourage child care providers to improve 
        their qualifications and to retain qualified child care 
        providers in the child care field.
    (b) Allotments to Remaining States.--
            (1) General authority.--From the funds appropriated to 
        carry out this title for any fiscal year and remaining after 
        the reservations made under subsection (a), the Secretary shall 
        allot to each State (excluding Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands) an amount equal 
        to the sum of--
                    (A) an amount that bears the same ratio to 50 
                percent of such 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 estimates of population in the States, as 
        provided by the Bureau of the Census.
            (3) School lunch factor.--In this subsection, 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 Department of Agriculture.
            (4) Allotment percentage.--
                    (A) In general.--Except as provided in subparagraph 
                (B), for purposes of this subsection, 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 determined under 
                subparagraph (A)--
                            (i) is more than 1.2 percent, the allotment 
                        percentage of that State shall be considered to 
                        be 1.2 percent; and
                            (ii) is less than 0.8 percent, the 
                        allotment percentage of the State shall be 
                        considered 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 
                        beginning on October 1 of the first fiscal year 
                        beginning after the date such determination is 
                        made; and
                            (iii) equal to the average of the annual 
                        per capita incomes for the most recent 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 Organizations.--
            (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 applications under this subsection, to plan and carry 
        out programs and activities to encourage child care providers 
        to improve their qualifications and to retain qualified child 
        care providers in the child care field.
            (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 
        information as the Secretary may require. The application shall 
        provide that the applicant--
                    (A) will coordinate the programs and activities 
                involved, to the maximum extent practicable, with the 
                lead agency in each State in which the applicant will 
                carry out such programs 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 activities under this title 
                as the Secretary may require.
    (d) Data and Information.--The Secretary shall obtain from each 
appropriate Federal agency, the most recent data and information 
necessary to determine the allotments provided for in subsection (b).
    (e) Reallotments.--
            (1) In general.--Any portion of the 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 allotments made under such 
        subsection to such States for such fiscal year.
            (2) Limitations.--
                    (A) Reduction.--The amount of any reallotment to 
                which a State is entitled under this subsection shall 
                be reduced to the extent that such amount exceeds the 
                amount that the Secretary estimates will be distributed 
                to the State to make grants under this title.
                    (B) Reallotments.--The amount of such reduction 
                shall be reallotted to States for which no reduction in 
                an allotment, or in a reallotment, is required by this 
                subsection, in proportion to the original allotments 
                made under subsection (b) to such States for such 
                fiscal year.
            (3) Amounts reallotted.--For purposes of this title (other 
        than this subsection and subsection (b)), any amount reallotted 
        to a State under this subsection shall be considered to be part 
        of the allotment made under subsection (b) to the State.
    (f) Cost-Sharing.--
            (1) Federal share.--The Federal share of the cost of making 
        grants under sections 207 and 208, with funds allotted under 
        this section and distributed by the Secretary to a State, shall 
        be--
                    (A) not more than 90 percent of the cost of each 
                grant made under such sections, in the 1st fiscal year 
                for which the State receives such funds;
                    (B) not more than 85 percent of the cost of each 
                grant made under such sections, in the 2d fiscal year 
                for which the State receives such funds;
                    (C) not more than 80 percent of the cost of each 
                grant made under such sections, in the 3d fiscal year 
                for which the State receives such funds; and
                    (D) not more than 75 percent of the cost of each 
                grant made under such sections, in any subsequent 
                fiscal year for which the State receives such funds.
            (2) State share.--The non-Federal share of the cost of 
        making such grants shall be paid by the State in cash or in the 
        form of an in-kind contribution, fairly evaluated by the 
        Secretary.
    (g) Availability of Allotted Funds Distributed to States.--Of the 
funds allotted under this section 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 207;
            (2) not less than 22.5 percent shall be available to the 
        State for grants under section 208; and
            (3) not more than 10 percent shall be available to pay 
        administrative costs incurred by the State to carry out this 
        title.

SEC. 206. APPLICATION AND PLAN.

    (a) Application.--To be eligible to receive a distribution of funds 
allotted under section 205, a State shall submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require by rule and shall include in 
such application a State plan that satisfies the requirements of 
subsection (b).
    (b) Requirements of Plan.--
            (1) Lead agency.--The State plan shall identify the lead 
        agency to make grants under this 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 recruitment of eligible child care providers who are 
        new to the child care field and the retention of eligible child 
        care providers who have a demonstrated commitment to the child 
        care field.
            (3) Notification of grant availability.--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 under this title.
            (4) Distribution of grants.--The State plan shall describe 
        how the lead agency will make grants under sections 207 and 208 
        to 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, collectively--
                                    (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 
                        geographical areas selected under this 
                        subparagraph for the preceding fiscal year.
                    (B) Selection of child care providers to receive 
                grants.--In making grants under section 207, the State 
                may make grants only to eligible child care providers 
                in geographical areas selected under subparagraph (A), 
                but--
                            (i) may give special consideration in such 
                        areas to eligible child care providers who have 
                        attained a higher relevant educational 
                        credential, who provide a specific kind of 
                        child care services, who provide child care 
                        services to populations who meet  specific 
economic characteristics, or who meet such other criteria as the State 
may establish; and
                            (ii) shall give special consideration to 
                        eligible child care providers who received a 
                        grant under such section in the preceding 
                        fiscal year.
                    (C) Limitation.--The State shall describe how the 
                State will ensure that grants made under section 207 to 
                child care providers will not be used to offset 
                reductions in the compensation of such providers.
                    (D) Reporting requirement.--With respect to each 
                particular geographical area selected 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 207--
                            (i) include in the report required by 
                        section 209, detailed information regarding--
                                    (I) the continuity of employment of 
                                the grant recipients as child care 
                                providers with the same employer;
                                    (II) with respect to each employer 
                                that employed such a grant recipient, 
                                whether such employer was accredited by 
                                a recognized national or State 
                                accrediting body during the period 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 207 for that fiscal year; and
                            (ii) provide a follow-up report, not later 
                        than 90 days after the end of the succeeding 
                        fiscal year that includes information 
                        regarding--
                                    (I) the continuity of employment of 
                                the grant recipients as child care 
                                providers with the same employer;
                                    (II) with respect to each employer 
                                that employed such a grant recipient, 
                                whether such employer was accredited by 
                                a recognized national or State 
                                accrediting body during the period of 
                                employment; and
                                    (III) to the extent practicable and 
                                available to the State, detailed 
                                information regarding the rate and 
                                frequency of employment turnover of 
                                qualified child care providers 
                                throughout such area,
                        during the 1-year period beginning on the date 
                        on which the grant to the State was made under 
                        section 207.
            (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 
        207 in accordance with the following requirements:
                    (A) Sufficient amounts.--The State shall 
                demonstrate that the amounts of individual grants to be 
                made under section 207 will be sufficient--
                            (i) to encourage child care providers to 
                        improve their qualifications; and
                            (ii) to retain qualified child care 
                        providers in the child care field.
                    (B) Amounts to credentialed providers.--Such grants 
                made to child care providers who have a child 
                development associate credential 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 higher levels of 
                education.--The State shall make such grants in amounts 
                greater than $1,000 per year to child care providers 
                who have higher levels of education than the education 
                required for a credential such as a child development 
                associate credential, according to the following 
                requirements:
                            (i) Providers with baccalaureate degrees in 
                        relevant fields.--A child care provider who has 
                        a baccalaureate degree in the area of child 
                        development or early child education shall 
                        receive a grant under section 207 in an amount 
                        that is not less than twice the amount of the 
                        grant that is made under section 207 to a child 
                        care provider who has an associate of the arts 
                        degree in the area of child development or 
                        early child education.
                            (ii) Providers with associate degrees.--A 
                        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 section 207 in an amount that is not less 
                        than 150 percent of the amount of the grant 
                        that is made under section 207 to a child care 
                        provider who has a child development associate 
                        credential and is employed full-time to provide 
                        child care services.
                            (iii) Other providers with baccalaureate 
                        degrees.--
                                    (I) In general.--Except as provided 
                                in subclause (II), a child care 
                                provider who has a baccalaureate degree 
                                in a field other than child development 
                                or early child education shall receive 
                                a grant under section 207 in an amount 
                                equal to the amount of the grant that 
                                is made under section 207 to a child 
                                care provider who has an associate of 
                                the arts degree in the area of child 
                                development or early child education.
                                    (II) Exception.--If a child care 
                                provider who has such a baccalaureate 
                                degree obtains additional 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 207 in an amount equal to the 
                                amount of the grant that is made under 
                                section 207 to a child care provider 
                                who has a baccalaureate degree 
                                specified in clause (i).
                    (D) Amounts to full-time providers.--The State 
                shall make a grant under section 207 to a child care 
                provider who works full-time in a greater amount than 
                the amount of the grant that is made under section 207 
                to a child care provider who works part-time, based on 
                the State definitions of full-time and part-time work.
                    (E) Amounts to experienced providers.--The State 
                shall make grants under section 207 in progressively 
                larger amounts to child care providers to reflect the 
                number 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 208 and shall 
        specify the types of educational and training programs for 
        which the scholarship grants made under such section 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 recognized 
                credential in the area of child development or early 
                child education, an associate of the arts degree in the 
                area of child development or early child education, or 
                a baccalaureate degree in the area of child development 
                or early child education.
            (7) Employer contribution.--The State plan shall describe 
        how the lead agency will encourage employers of child care 
        providers to contribute to the attainment of education goals by 
        child care providers who receive grants under section 208.
            (8) Supplementation.--The State plan shall provide 
        assurances that amounts received by the State to carry out 
        sections 207 and 208 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 encourage child care 
        providers to improve their qualifications and that promote the 
        retention of qualified child care providers in the child care 
        field.

SEC. 207. CHILD CARE PROVIDER DEVELOPMENT AND RETENTION GRANT PROGRAM.

    (a) In General.--A State that receives funds allotted under section 
205 and made available to carry out this section shall expend such 
funds to make 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 eligible to receive a 
grant under this section, a child care provider shall--
            (1) have a child development associate credential or 
        equivalent, an associate of the arts degree in the area of 
        child development or early child education, a baccalaureate 
        degree in the area of child development or early child 
        education, or a baccalaureate 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 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, 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 under section 208 for purposes 
of selecting eligible child care providers to receive grants under this 
section.

SEC. 208. CHILD CARE PROVIDER SCHOLARSHIP PROGRAM.

    (a) In General.--A State that receives funds allotted under section 
205 and made available to carry out this section shall expend such 
funds to make scholarship grants to eligible child care providers in 
accordance with this section, to improve 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 selecting 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 under any other provision of this title, or under any 
        other Federal or State law that provides funds for educational 
        purposes; 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 title, 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 educational 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. 209. ANNUAL REPORT.

    A State that receives funds appropriated to carry out this title 
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 expended 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 with 
        such funds, including--
                    (A) the number of child care providers who received 
                such grants;
                    (B) the amounts of such grants;
                    (C) any other information that describes or 
                evaluates the effectiveness of this title;
                    (D) the particular geographical areas selected 
                under section 206 for the purpose of making such 
                grants;
                    (E) with respect to grants made under section 207--
                            (i) the number of years grant recipients 
                        have been employed as child care providers;
                            (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 compensation 
                        received by grant recipients to provide child 
                        care services before, during, and after 
                        receiving such grant;
                            (iv) the number of children who received 
                        child care services provided by grant 
                        recipients;
                            (v) information on family demographics of 
                        such children;
                            (vi) the types of settings described in 
                        subparagraphs (A), (B), and (C) of section 
                        203(a)(1) in which grant recipients are 
                        employed; and
                            (vii) the ages of the children who received 
                        child care services provided by grant 
                        recipients;
                    (F) with respect to grants made under section 208--
                            (i) the number of years grant recipients 
                        have been employed as child care providers;
                            (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 compensation 
                        received by grant recipients to provide child 
                        care services before, during, and after 
                        receiving such grant;
                            (iv) the types of settings described in 
                        subparagraphs (A), (B), and (C) of section 
                        203(a)(1) in which grant recipients are 
                        employed;
                            (v) the ages of the children who received 
                        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 Secretary may 
                require by rule.

SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $5,000,000,000 in the 
aggregate for fiscal years 2002 through 2006 to carry out this title.
                                 <all>