1.This Act may be cited as the Children’s Development Commission Act (Kiddie Mac)
.
2.The Congress finds the following:
(1)The need for quality nursery schools, both full-time and part-time child care centers and after-school programs, neighborhood-run mothers-day-out programs, and family child care providers has grown among working parents, and parents who stay at home, who want their children to have access to early childhood education.
(2)All parents should have access to safe, stimulating, and educational early childhood education programs for their children, whether such programs are carried out in a child care center, a part-time nursery school (including a nursery school operated by a religious organization), or a certified child care provider’s home.
(3)The number of available enrollment opportunities for children to receive quality child care services is not meeting the demand for such services.
(4)In 1995 there were about 21,000,000 children less than 6 years of age, of whom 31 percent were participating in center-based child care services and 14 percent were receiving child care in homes. Between 1992 and 2005 the participation of women 24 to 54 years of age in the labor force is projected to increase from 75 percent to 83 percent.
(5)In States that have set up a mechanism to provide capital improvements for child care facilities, the demand for services of such facilities still has not been met.
(6)The United States is behind other western, industrialized countries when it comes to providing child care services. In France, almost 100 percent of all children 3 to 5 years of age attend nursery school. In Germany this number is 78 percent. In Japan 90 percent of such children attend some form of preschool care. In all of these countries early childhood care has proven to increase children’s development and performance.
3.Insurance for mortgages on new and rehabilitated child care and development facilitiesTitle II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the following new section:
257.Mortgage insurance for child care and development facilities
(a)The purpose of this section is to facilitate and assist in the provision and development of licensed child care and development facilities.
(b)General insurance authorityThe Secretary may insure mortgages (including advances on such mortgages during construction) in accordance with the provisions of this section and upon such terms and conditions as the Secretary may prescribe and may make commitments for insurance of such mortgages before the date of their execution or disbursement thereon.
(c)To carry out the purpose of this section, the Secretary may insure any mortgage that covers a new child care and development facility, including a new addition to an existing child care and development facility (regardless of whether the existing facility is being rehabilitated), or a substantially rehabilitated child care and development facility, including equipment to be used in the operation of the facility, subject to the following conditions:
(1)The mortgage shall be executed by a mortgagor approved by the Secretary. The Secretary may, in the discretion of the Secretary, require any such mortgagor to be regulated or restricted as to charges and methods of financing and, if the mortgagor is a corporate entity, as to capital structure and rate of return. As an aid to the regulation or restriction of any mortgagor with respect to any of the foregoing matters, the Secretary may make such contracts with and acquire for not more than $100 such stock or interest in such mortgagor as the Secretary may consider necessary. Any stock or interest so purchased shall be paid for out of the General Insurance Fund, and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Secretary under the insurance.
(2)
(A)Except as provided in subparagraph (B), the mortgage shall involve a principal obligation in an amount not to exceed 80 percent of the estimated value of the property or project, or 85 percent of the estimated value of the property or project in the case only of a mortgagor that is a private nonprofit corporation or association (as such term is defined pursuant to section 221(d)(3)), including—
(i)equipment to be used in the operation of the facility when the proposed improvements are completed and the equipment is installed; or
(ii)a solar energy system (as defined in subparagraph (3) of the last paragraph of section 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.
(B)Increase for certain distressed areasIn the case of any mortgage for a child care and development facility that is located in a distressed area and for which more than 50 percent of the children served by the facility are children of families or individuals who are eligible for assistance under a State program for temporary assistance for needy families that is funded under part A of title IV of the Social Security Act, the mortgage shall involve principal obligation in an amount not to exceed the sum of the amount determined under subparagraph (A) for the mortgagor and 5 percent of the estimated value of the property or project.
(3)Amortization and interestThe mortgage shall—
(A)provide for complete amortization by periodic payments under such terms as the Secretary shall prescribe;
(B)have a maturity satisfactory to the Secretary, but in no event longer than 25 years; and
(C)bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee, and the Secretary shall not issue any regulations or establish any terms or conditions that interfere with the ability of the mortgagor and mortgagee to determine the interest rate.
(d)Certification by children’s development CommissionThe Secretary may not insure a mortgage under this section unless the Children’s Development Commission established under section 258 certifies that the facility is in compliance, or will be in compliance not later than 12 months after such certification, with—
(1)any laws, standards, and requirements 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; and
(2)after the effective date of the standards and requirements established under section 258(c)(2), such standards and requirements.
(e)The Secretary may not insure a mortgage under this section unless the mortgage certifies, to the satisfaction of the Secretary, that not less than 20 percent of the children served by the facility during the period that the mortgage is outstanding shall be children of families having incomes less than the median income for the metropolitan statistical area in which the facility is located.
(f)The Secretary may consent to the release of a part or parts of the mortgaged property or project from the lien of any mortgage insured under this section upon such terms and conditions as the Secretary may prescribe.
(g)The provisions of subsections (d), (e), (g), (h), (i), (j), (k), (l), and (n) of section 207 shall apply to mortgages insured under this section, except that all references in such subsections to section 207 shall be considered, for purposes of mortgage insurance under this section, to refer to this section.
(h)Mortgage insurance for fire safety equipment loans
(1)The Secretary may, upon such terms and condition as the Secretary may prescribe, make commitments to insure and insure loans made by financial institutions or other approved mortgagees to child care and development facilities to provide for the purchase and installation of fire safety equipment necessary for compliance with the 1967 edition of the Life Safety Code of the National Fire Protection Association (or any subsequent edition specified by the Secretary of Health and Human Services).
(2)To be eligible for insurance under this subsection a loan shall—
(A)not exceed the Secretary’s estimate of the reasonable cost of the equipment fully installed;
(B)bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee;
(C)have a maturity 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 mortgagee approved under section 203(b)(1);
(E)comply with other such terms, conditions, and restrictions as the Secretary may prescribe; and
(F)be made with respect to a child care and development facility that complies with the requirement under subsection (d).
(3)The provisions of paragraphs (5), (6), (7), (9), and (10) of section 220(h) shall apply to loans insured under this subsection, except that all references in such paragraphs to home improvement loans shall be considered, for purposes of this subsection, to refer to loans under this subsection. The provisions of subsections (c), (d), and (h) of section 2 shall apply to loans insured under this subsection, except that all references in such subsections to this section
or this title
shall be considered, for purposes of this subsection, to refer to this subsection.
(i)The Secretary shall establish schedules and deadlines for the processing and approval (or provision of notice of disapproval) of applications for mortgage insurance under this section.
(j)For the purposes of this section, the following definitions shall apply:
(1)Child care and development facilityThe term child care and development facility means a public facility, proprietary facility, or facility of a private nonprofit corporation or association that—
(A)has as its purpose the care and development of children less than 12 years of age; and
(B)is licensed or regulated by the State in which it is located (or, if there is no State law providing for such licensing and regulation by the State, by the municipality or other political subdivision in which the facility is located).The term does not include facilities for school-age children primarily for use during normal school hours. The term includes facilities for training individuals to provide child care and development services.
(2)The term distressed area means an area that—
(A)meets the requirements under subchapter U of chapter I of the Internal Revenue Code (26 U.S.C. 1391 et seq.) for designation as an enterprise community or empowerment zone under such subchapter; or
(B)is a census tract that has a median income that does not exceed 50 percent of the median income for the region in which the census tract is located, as determined by the Secretary.For purposes of subparagraph (B), a region shall be determined by the Secretary in the same manner as areas are determined for purposes of determining income limitations for assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).
(3)The term equipment includes machinery, utilities, and built-in equipment and any necessary enclosures or structures to house them, and any other items necessary for the functioning of a particular facility as a child care and development facility, including necessary furniture. Such term includes books, curricular, and program materials.
(4)Mortgage; first mortgage; mortgageeThe term mortgage means a first mortgage on real estate in fee simple, or on 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 mortgage. The term first mortgage means such classes of first liens as are commonly given to secure advances (including advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instrument or instruments (if any) secured thereby, and any mortgage may be in the form of one or more trust mortgages or mortgage indentures or deeds of trust, securing notes, bonds, or other credit instruments, and, by the same instrument or by a separate instrument, may create a security interest in initial equipment, whether or not attached to the realty. The term mortgagor has the meaning given the term in section 207(a).
(k)Limitation on insurance authority
(1)No mortgage may be insured under this section or section 223(h) after September 30, 2014, except pursuant to a commitment to insure issued on or before such date.
(2)Aggregate principal amount limitationThe aggregate principal amount of mortgages for which the Secretary enters into commitments to insure under this section or section 223(h) on or before the date under paragraph (1) may not exceed $2,000,000,000. If, upon the date under paragraph (1), the aggregate insurance authority provided under this paragraph has not been fully used, the Secretary of the Treasury shall submit a report to the Congress evaluating the need for continued mortgage insurance under this section.
(l)The Secretary shall issue any regulations necessary to carry out this section. In issuing such regulations, the Secretary shall consult with the Secretary of Health and Human Services with respect to any aspects of the regulations regarding child care and development facilities..
4.Insurance for mortgages for acquisition or refinancing debt of existing child care and development facilitiesSection 223 of the National Housing Act (12 U.S.C. 1715n) is amended by adding at the end the following new subsection:
(h)Mortgage insurance for purchase or refinancing of existing child care and development facilities
(1)Notwithstanding any other provision of this Act, the Secretary may insure under any section of this title a mortgage executed in connection with the purchase or refinancing of an existing child care and development facility, the purchase of a structure to serve as a child care and development facility, or the refinancing of existing debt of an existing child care and development facility.
(2)Purchase of existing facilities and structuresIn the case of the purchase under this subsection of an existing child care and development 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 and development facility; and
(B)the facility complies with the same requirements applicable under section 257(d) to facilities having mortgages insured under such section.
(3)Refinancing of existing facilitiesIn the case of refinancing of an existing child care and development 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 refinancing) of the existing facility;
(B)the proceeds of any refinancing will be employed only to retire the existing indebtedness and pay the necessary cost of refinancing on the existing facility;
(C)the existing facility is economically viable; and
(D)the facility complies with the same requirements applicable under section 257(d) to facilities having mortgages insured under such section.
(4)For purposes of this subsection, the terms defined in section 257(j) shall have the same meanings as provided under such section.
(5)Limitation on insurance authorityThe authority of the Secretary to enter into commitments to insure mortgages under this subsection is subject to the limitations under section 257(k)..
5.Children’s development CommissionTitle II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end (after section 257, as added by section 3 of this Act) the following new section:
258.Children’s development Commission (Kiddie Mac)
(a)There is hereby established a commission to be known as the Children’s Development Commission or Kiddie Mac.
(b)
(1)The Commission shall be composed of 7 members appointed by the President, not later than the expiration of the 3-month period beginning upon the enactment of this section, by and with the advice and consent of the Senate, as follows:
(A)The Secretary of Housing and Urban Development or the Secretary’s designee.
(B)The Secretary of Health and Human Services or the Secretary’s designee.
(C)The Secretary of the Treasury or the Secretary’s designee.
(D)4 members shall be appointed from among 12 individuals recommended jointly by the Speaker of the House of Representatives, the Majority Leader of the Senate, Minority Leader of the House of Representatives, the Minority Leader of the Senate.
(2)Qualifications of congressionally recommended membersOf the members appointed under paragraph (1)(D)—
(A)each shall be an individual who actively participates or is employed in the field of child care and has academic, licensing, or other credentials relating to such participation or employment; and
(B)not more than 2 may be of the same political party.
(3)Each appointed member of the Commission shall serve for a term of 3 years.
(4)Any member appointed to fill a vacancy occurring before the expiration of the term for which the member’s predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member’s term until a successor has taken office. A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
(5)The chairperson of the Commission shall be designated by the President at the time of appointment.
(6)A majority of the members of the Commission shall constitute a quorum for the transaction of business.
(7)Each member of the Commission shall be entitled to 1 vote, which shall be equal to the vote of every other member of the Commission.
(8)Prohibition on additional payMembers of the Commission shall serve without compensation, but shall be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of their duties as members of the Commission.
(c)The Commission shall carry out the following functions:
(1)Certification of complianceThe Commission shall collect such information and make such determinations as may be necessary to determine, for purposes of section 257(d), whether child care and development facilities comply, or will be in compliance within 12 months, with—
(A)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, and
(B)after the effective date of the standards and requirements established under paragraph (2), such standards and requirements,and shall issue certifications of such compliance.
(2)Establishment of standards
(A)Not later than 12 months after the date on which appointment of initial membership of the Commission is completed, the Commission, in consultation with the Secretary of Housing and Urban Development and the Secretary of Health and Human Services, shall conduct a study to determine the laws, standards, and requirements referred to in paragraph (1)(A) that are applicable in each State. Taking into consideration the findings of the study, the Secretary shall establish standards and requirements regarding child care and development facilities that are designed to ensure that mortgage insurance is provided under section 257 and section 223(h) only for safe, clean, and healthy facilities that provide appropriate care and development services for children.
(B)The Commission shall issue regulations providing for the standards and requirements established under subparagraph (A) to take effect, for purposes of sections 257(d)(2) and 223(h)(2)(B) and paragraph (1)(B) of this section, not later than 18 months after the date of the enactment of this section.
(3)The Commission shall, to the extent amounts are made available for such purpose pursuant to subsection (i) and qualified requests are received, make loans, directly or indirectly to providers of child care and development facilities for reconstruction or renovation of such facilities, subject to the following requirements:
(A)Loans under this paragraph shall be made only for such facilities that are financially and operationally viable, as determined under standards and guidelines to be established by the Commission.
(B)The aggregate amount of loans made under this paragraph to a single borrower may not exceed $50,000.
(C)A loan made under this paragraph may not have a term exceeding 15 years.
(D)Loans under this paragraph shall bear interest at rates and be made under such other conditions and terms as the Commission shall provide.
(4)The Commission shall take such actions as may be necessary to publicize the availability of the programs for mortgage insurance under sections 257 and 223(h) and loans under paragraph (3) of this subsection in a manner that ensures that information concerning such programs will be available to child care providers throughout the United States.
(5)The Commission shall make available, to mortgagors of mortgages insured under section 257 or 223(h) and to borrowers under paragraph (3) of this subsection, technical assistance and expertise in the business aspects of operating child care and development facilities (including business planning and quality control assistance). The Commission shall provide such assistance and expertise directly and in coordination with appropriate Federal agencies (including the Department of Housing and Urban Development, the Department of Health and Human Services, the Department of Defense, and the Small Business Administration),
(6)The Commission shall—
(A)not later than 12 months after the date on which appointment of initial membership of the Commission is completed—
(i)establish standards and guidelines, applicable to mortgage insurance under sections 257 and 223(h) and loans under paragraph (3) of this subsection, that require child care providers operating child care and development facilities assisted under such provisions to obtain and maintain liability insurance in such amounts and subject to such requirements as the Commission considers appropriate; and
(ii)submit a report to the Congress that analyzes the need for making financial and technical assistance available to such child care providers to identify and obtain liability insurance adequate to comply with such standards and guidelines, identifies appropriate methods of providing such assistance, sets forth a program for the Commission to provide such technical assistance, and makes recommendations for any legislation necessary to implement a program to provide such appropriate financial assistance; and
(B)beginning not later than the effective date of the standards and guidelines established under subparagraph (A)(i), carry out the technical assistance program set forth in the report under subparagraph (A)(ii).
(7)Not later than 12 months after the date of the enactment of this section, the Commission shall submit a report to the Congress recommending a plan for establishing and funding a foundation that is an entity independent of the Commission (but which maintains association with the Commission)—
(A)which shall have as its purpose—
(i)to support research relating to child care and development facilities;
(ii)to fund pilot programs to test innovative methods for improving child care; and
(iii)to engage in activities and publish materials to assist persons interested in mortgage insurance under sections 257 and 223(h) and other assistance provided by the Commission; and
(B)which shall have the authority to accept, use, and dispose of gifts, bequests, or devises of services or property, both real and personal, for the purpose of aiding or facilitating the work of the foundation.
(8)Study regarding capital needs of center-based child care in low-income communitiesThe Commission shall provide for the conducting of a study of center-based child care for families in low-income communities and neighborhoods that—
(A)determines the existing supply and quality of such care in such areas;
(B)identifies the economic and other market barriers in such areas to—
(i)creating an adequate supply of center-based child care services; and
(ii)achieving a quality standard in child care centers adequate to support early childhood programs; and
(C)proposes public policy and private sector initiatives that might be taken to ensure that such areas have—
(i)a supply of center-based child care facilities sufficient for child care needs of the areas and to facilitate employment and support the goals of welfare reform;
(ii)appropriate child care choices; and
(iii)sufficient quality of care necessary to prepare at-risk children for school.The Commission shall submit to the Congress a report regarding the results of the study conducted under this section not later than the expiration of the 18-month period beginning on the date of the appointment of the executive director pursuant to subsection (f)(1).
(d)Nondiscrimination requirement
(1)The Commission may not certify under subsection (c)(1) or carry out any activities of the Commission with respect to any child care and development facility if the provider of the facility discriminates on account of race, color, religion (subject to paragraph (2)), national origin, sex (to the extent provided in title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.)), or handicapping condition.
(2)Facilities of religious organizationsThe prohibition with respect to religion shall not apply to a child care and development facility which is controlled by or which is closely identified with the tenets of a particular religious organization if the application of this subsection would not be consistent with the religious tenets of such organization.
(3)As a condition of certification under subsection (c)(1) and eligibility for a loan under subsection (c)(3), the provider of a child care and development facility shall certify to the Commission that the provider does not discriminate, as required by the provisions of paragraph (1) of this subsection.
(e)
(1)Assistance from Federal agenciesThe Commission may secure directly from any department or agency of the Federal Government such information as the Commission may require for carrying out its functions. Upon request of the Commission, any such department or agency shall furnish such information.
(2)Assistance from general services administrationThe Administrator of General Services shall provide to the Commission, on a reimbursable basis, such administrative support services as the Commission may request.
(3)Assistance from Department of Housing and Urban DevelopmentUpon the request of the Commission, the Secretary of Housing and Urban Development shall, to the extent possible and subject to the discretion of the Secretary, detail any of the personnel of the Department of Housing and Urban Development, on a nonreimbursable basis, to assist the Commission in carrying out its functions under this section.
(4)The Commission may use the United States mails in the same manner and under the same conditions as other Federal agencies.
(f)
(1)The Commission shall appoint an executive director, who shall be compensated at a rate fixed by the Commission, but which shall not exceed the rate established for level I of the Executive Schedule under title 5, United States Code.
(2)In addition to the executive director, the Commission may appoint and fix the compensation of such personnel as the Commission considers necessary, in accordance with the provisions of title 5, United States Code, governing appointments to the competitive service, and the provisions of chapter 51 and subchapter III of chapter 53 of such title, relating to classification and General Schedule pay rates.
(g)Not later than March 31 of each year, the Commission shall submit a report to the President and the Congress regarding the operations and activities of the Commission during the preceding calendar year. Each annual report shall include a copy of the Commission’s financial statements and such information and other evidence as is necessary to demonstrate that the activities of the Commission during the year for which the report is made. The Commission may also submit reports to the Congress and President at such other times as the Commission deems desirable.
(h)For purposes of this section, the terms defined in section 257(j) shall have the same meanings as provided under such section.
(i)Authorization of appropriationsThere are authorized to be appropriated to the Commission to carry out this section $20,000,000 for fiscal year 2005, to remain available until expended, of which not more than $2,500,000 shall be available for administrative costs of the Commission and the remainder of which shall be available only for loans under subsection (c)(3)..
6.Study of availability of secondary markets for mortgages on child care facilitiesThe Secretary of the Treasury shall conduct a study of the secondary mortgage markets to determine—
(1)whether such a market exists for purchase of mortgages eligible for insurance under sections 223(h) and 257 of the National Housing Act (as added by this Act);
(2)whether such a market would affect the availability of credit available for development of child care and development facilities or would lower development costs of such facilities; and
(3)the extent to which such a market or other activities to provide credit enhancement for child care and development facilities loans is needed to meet the demand for such facilities.The Secretary of the Treasury shall submit to the Congress a report regarding the results of the study conducted under this section not later than the expiration of the 2-year period beginning on the date of the enactment of this Act.