[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2539 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  2d Session
                                S. 2539

 To amend the Social Security Act to provide for mandatory funding, to 
ensure that the families that have infants and toddlers, have a family 
 income of not more than 200 percent of the applicable Federal poverty 
 guideline, and need child care have access to high-quality infant and 
   toddler child care by the end of fiscal year 2026, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 10, 2016

Mr. Casey (for himself, Mrs. Gillibrand, Mr. Franken, Ms. Baldwin, Mr. 
 Reed, Ms. Warren, Mr. Durbin, Ms. Hirono, and Mr. Merkley) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Social Security Act to provide for mandatory funding, to 
ensure that the families that have infants and toddlers, have a family 
 income of not more than 200 percent of the applicable Federal poverty 
 guideline, and need child care have access to high-quality infant and 
   toddler child care by the end of fiscal year 2026, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Child Care Access to Resources for 
Early-learning Act'' or the ``Child CARE Act''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to provide funding to ensure that the families that 
        have infants and toddlers, that have a family income of not 
        more than 200 percent of the applicable Federal poverty 
        guideline, and that need child care have access to high-quality 
        infant and toddler child care by the end of fiscal year 2026, 
        in order to promote family economic security and parental 
        employment, to support parents in balancing work and family 
        obligations, and to promote children's health, early care, and 
        learning;
            (2) to provide sufficient funding to ensure that both 
        families and child care providers have the resources they need 
        to support high-quality early care and learning for infants and 
        toddlers;
            (3) to ensure that provider payment rates, for infant and 
        toddler child care providers, are set at a level high enough to 
        support high-quality child care for infants and toddlers, 
        including infants and toddlers with disabilities;
            (4) to assist eligible infant and toddler child care 
        providers in improving the quality of their programs--
                    (A) by strengthening the skills, competencies, and 
                compensation of the workforce of those providers, in a 
                manner aligned with the report entitled ``Transforming 
                the Workforce for Children Birth Through Age 8: A 
                Unifying Foundation'', issued by the National Academy 
                of Sciences in April 2015; and
                    (B) by helping those providers ensure that children 
                receive the comprehensive services they need, by 
                coordinating activities with other community service 
                providers; and
            (5) to ensure that high-quality infant and toddler child 
        care is a strong component of a continuum of quality early care 
        and learning activities within States and Indian and Native 
        Hawaiian communities, starting with prenatal care and 
        continuing through activities in the early school years, with 
        seamless transitions between programs.

       TITLE I--CHILD CARE ACCESS TO RESOURCES FOR EARLY LEARNING

SEC. 101. APPROPRIATION.

    Title IV of the Social Security Act is amended by inserting after 
section 418 (42 U.S.C. 618) the following:

``SEC. 418A. APPROPRIATION.

    ``For grants under the Child CARE Act, there is appropriated--
            ``(1) $3,664,862,604 for fiscal year 2017;
            ``(2) $4,121,731,861 for fiscal year 2018;
            ``(3) $4,819,546,318 for fiscal year 2019;
            ``(4) $5,843,784,371 for fiscal year 2020; and
            ``(5) $6,887,236,056 for fiscal year 2021.''.

SEC. 102. DEFINITIONS.

    In this Act:
            (1) Child care and development fund.--The term ``Child Care 
        and Development Fund'' means the funds appropriated under the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858 et seq.) and the funds appropriated under section 418 of 
        the Social Security Act (42 U.S.C. 618).
            (2) Eligible family.--The term ``eligible family'' means a 
        family that has, and needs child care for, an infant or 
        toddler, and is a low-income family.
            (3) Eligible infant or toddler.--The term ``eligible infant 
        or toddler'' means an infant or toddler from a low-income 
        family.
            (4) Indian; indian tribe.--The terms ``Indian'' and 
        ``Indian tribe'' have the meanings given the terms in section 4 
        of the Indian Self-Determination and Education Assistance Act 
        (25 U.S.C. 450b).
            (5) High-quality.--The term ``high-quality'', used with 
        respect to child care (including early care and learning), 
        means child care provided in a manner consistent with the 
        quality standards described in section 105(a)(3).
            (6) Infant or toddler.--The term ``infant or toddler'' 
        means a child under age 4.
            (7) Infant or toddler with a disability.--The term ``infant 
        or toddler with a disability'' has the meaning given the term 
        in section 632 of the Individuals with Disabilities Education 
        Act (20 U.S.C. 1432).
            (8) Low-income family.--The term ``low-income family'' 
        means a family with a family income of not more than 200 
        percent of the applicable Federal poverty guideline.
            (9) Native hawaiian.--The term ``Native Hawaiian'' has the 
        meaning given the term in section 6207 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 7517).
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (11) State.--The term ``State'' means any of the several 
        States, the District of Columbia, the Virgin Islands of the 
        United States, the Commonwealth of Puerto Rico, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands.
            (12) Tribal organization.--The term ``tribal organization'' 
        has the meaning given the term in section 658P of the Child 
        Care and Development Block Grant Act of 1990 (42 U.S.C. 9858n).

SEC. 103. FUNDING ALLOTMENTS.

    (a) Distribution by Activity.--From the amounts appropriated under 
this Act for each fiscal year, the Secretary shall--
            (1) reserve a portion for providing the allotments 
        described in subsection (b) (relating to expanding access to 
        high-quality child care);
            (2) reserve a portion of not less than 2 percent of the 
        appropriated amounts for providing the allotments described in 
        subsection (d) (relating to Indian and Native Hawaiian child 
        care);
            (3) reserve a portion, of not more than 0.5 percent of the 
        appropriated amounts, for carrying out research and evaluation 
        activities under this Act;
            (4) reserve a portion, of not more than 0.5 percent of the 
        appropriated amounts, for carrying out technical assistance 
        activities under this Act;
            (5) reserve 6 percent of the appropriated amounts for 
        making grants under subsection (e) (relating to child care 
        provided during nontraditional and unpredictable hours); and
            (6) use the remainder for providing the allotments 
        described in subsection (c) (relating to maintaining access to 
        child care).
    (b) Allotments for Expanding Access to High-Quality Child Care.--
            (1) Allotments.--Using funds reserved under subsection 
        (a)(1) for a fiscal year, the Secretary shall allot to each 
        eligible State an amount that bears the same relationship to 
        the reserved funds as the number of infants and toddlers from 
        low-income families in the State bears to the total number of 
        such infants and toddlers in all eligible States.
            (2) Use of funds.--A State that receives an allotment under 
        this subsection shall use the allotment funds--
                    (A) to expand access to high-quality child care for 
                infants and toddlers who do not receive child care 
                funded through the Child Care and Development Fund;
                    (B) to increase, as described in this Act, the 
                quality of child care for infants and toddlers who 
                receive child care funded through the Child Care and 
                Development Fund;
                    (C)(i) to support payment rates, for child care 
                providers that serve infants and toddlers, that reflect 
                the cost of high-quality child care and are sufficient 
                to attract, support, and retain providers who meet 
                quality standards that relate to the unique needs of 
                infants and toddlers, including infants and toddlers 
                with disabilities; and
                    (ii) to increase the compensation of, and provide 
                other financial incentives for, the highly qualified 
                infant and toddler child care workforce; and
                    (D) as otherwise described in section 105.
    (c) Allotments for Maintaining Access to Child Care.--
            (1) Allotments.--Using the remainder described in 
        subsection (a)(6) for a fiscal year, the Secretary shall allot 
        to each eligible State an amount that bears the same 
        relationship to the reserved funds as the amount the State 
        receives for the fiscal year under section 418(a)(2)(B) of the 
        Social Security Act (42 U.S.C. 618(a)(2)(B)) bears to the total 
        amount received by all eligible States under that section.
            (2) Use of funds.--A State that receives an allotment under 
        this subsection shall use the allotment funds in accordance 
        with the Child Care and Development Block Grant Act of 1990.
    (d) Allotments for Indian and Native Hawaiian Child Care.--
            (1) Formula.--
                    (A) In general.--In order to ensure that Indian and 
                Native Hawaiian children have equal access to high-
                quality infant and toddler child care, the Secretary 
                shall develop a formula for allotting the funds 
                reserved under subsection (a)(2) to Indian tribes and 
                tribal organizations.
                    (B) Formula factors.--In developing the formula, 
                the Secretary shall--
                            (i) provide for a level of funding that 
                        will ensure that, by the end of fiscal year 
                        2026, the Indian and Native Hawaiian infants 
                        and toddlers in eligible families will receive 
                        a level of services that is equivalent to the 
                        high-quality child care received by infants and 
                        toddlers in the general population under this 
                        Act;
                            (ii) take into consideration the unique 
                        needs and circumstances of individuals in 
                        Indian and Native Hawaiian communities, such as 
                        unemployment rates; and
                            (iii) the cost of providing high-quality 
                        child care that addresses Indian and Native 
                        Hawaiian culture and language.
            (2) Use of funds.--An Indian tribe or tribal organization 
        that receives an allotment under this subsection shall use the 
        allotment funds as described in section 107.
    (e) Grants for Child Care During Unconventional Hours.--
            (1) In general.--Using funds reserved under subsection 
        (a)(5) for a fiscal year, the Secretary may make grants to 
        States for child care provided during nontraditional and 
        unpredictable hours.
            (2) Adjustments.--The Secretary may adjust the requirement 
        that providers serving children that require child care during 
        those hours meet quality standards as described in section 
        105(a)(3), as necessary to address the need for nontraditional 
        and unpredictable hours care.
            (3) Applicable requirements.--Except as provided in 
        paragraph (2), a State that receives a grant under this 
        subsection shall use the grant funds in accordance with the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9859 et seq.) and this Act.

SEC. 104. STATE APPLICATION.

    (a) In General.--To be eligible to receive a grant under this Act 
through allotments made under subsection (b), (c), or (e) of section 
103, a State shall submit to the Secretary an application, as a 
supplement to the State plan described in section 658E of the Child 
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858c).
    (b) Information.--Each such application shall include a description 
of each of the following:
            (1)(A) How the State will increase the number of high-
        quality child care slots for eligible families, to ensure, by 
        the end of fiscal year 2026, access to high-quality infant and 
        toddler child care for the eligible families in the State 
        (referred to in this section as ``universal high-quality child 
        care'').
            (B) The ambitious goals and measurable benchmarks that the 
        State will use to demonstrate progress toward achieving 
        universal high-quality child care, including--
                    (i) substantially increasing the percentage of 
                eligible families served; and
                    (ii) addressing the needs identified in the needs 
                assessment under section 105(a)(4).
            (2) How the State will measurably improve, by the end of 
        fiscal year 2026, the quality of child care available to 
        children who are infants and toddlers, including such children 
        who are dual language learners or are children with 
        disabilities, and the ambitious goals and measurable benchmarks 
        that the State will use to demonstrate progress toward 
        achieving this improvement.
            (3) How the State will maintain, using the Child Care and 
        Development Fund and the funds made available under section 
        103(c), the caseload of children that were served using the 
        Child Care and Development Fund on the date of enactment of 
        this Act.
            (4)(A) How the State will conduct a study on the cost of 
        high-quality child care for infants and toddlers, at least once 
        every 3 years, consistent with this supplement--
                    (i) to determine provider payment rates that are 
                sufficient--
                            (I) to ensure fair and competitive 
                        compensation for high-quality infant and 
                        toddler child care providers;
                            (II) to recognize child care providers who 
                        have the specialized knowledge and competencies 
                        of early childhood educators; and
                            (III) to recognize child care providers who 
                        offer a rich learning environment, use 
                        evidence-based classroom practices, and have 
                        provider competencies in engaging in 
                        stimulating, warm, and responsive adult-child 
                        interactions, consistent with the program 
                        performance standards referred to in section 
                        641A(a)(1) of the Head Start Act (42 U.S.C. 
                        9836a), appropriate to the age of the child; 
                        and
                    (ii) to assess the compensation levels necessary to 
                attract, support, and retain a workforce of child care 
                providers described in clause (i).
            (B) Whether the State proposes to conduct the study 
        required under subparagraph (A) by carrying out a cost of 
        quality study or survey that the State is currently conducting, 
        as a requirement of its State plan under section 658E of the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858c).
            (C) How the State will incorporate into the study 
        information gathered through a public hearing to solicit input 
        from relevant stakeholders including the infant and toddler 
        child care workforce.
            (D) How the State will use the results of the study to 
        establish and annually update reimbursement rates for high-
        quality infant and toddler child care providers in the State.
            (5) How the State will ensure and demonstrate that--
                    (A) the higher provider payment rates that the 
                State proposes to pay under this Act are sufficient to 
                achieve the compensation levels described in paragraph 
                (4)(A)(ii), and attract, support, and retain child care 
                providers described in paragraph (4)(A)(i); and
                    (B) the rates described in subparagraph (A) will 
                keep pace with inflation.
            (6) The need in the State for high-quality child care for 
        infants and toddlers, based on a needs assessment--
                    (A) that is conducted prior to the receipt of the 
                corresponding allotment and at least once every 3 years 
                consistent with the State plan;
                    (B) that is conducted by the State Advisory Council 
                on Early Childhood Education and Care (designated or 
                established pursuant to section 642B(b)(1)(A)(i) of the 
                Head Start Act (42 U.S.C. 9837b(b)(1)(A)(i))) or 
                another entity as determined by the State; and
                    (C) that identifies such need for geographic areas 
                and special populations of infants and toddlers, 
                including children with disabilities, children 
                experiencing cognitive issues as a result of exposure 
                to lead or another toxic substance (as the terms 
                ``cognitive issues'', ``exposure'', and ``toxic 
                substance'' are defined by the Secretary), homeless 
                children, children in foster care, children who are 
                dual language learners, children living in rural areas, 
                and children whose families work nontraditional hours.
            (7) A unified approach to early care and learning that 
        begins prenatally and supports children and their families at 
        least until the children enter kindergarten, which includes a 
        description of how the State will align infant and toddler 
        child care with--
                    (A) other early care and learning programs, 
                including State-supported programs of quality preschool 
                if applicable; and
                    (B) programs carried out under section 619 and part 
                C of the Individuals with Disabilities Education Act 
                (20 U.S.C. 1419, 1431 et seq.).
            (8) How the State will support early childhood educators 
        and K-3 teachers, including the best practices that the State 
        will use to support transitions into kindergarten and alignment 
        of curricula, professional development, and early learning 
        standards, to reflect an integrated approach to enabling 
        children to achieve substantial gains in key skill areas across 
        their development.
            (9) How the State will coordinate activities with other 
        public or private agencies to ensure that, to the extent that 
        services are available in the community, infants and toddlers 
        are referred to local agencies or other appropriate providers, 
        including community-based organizations, for comprehensive 
        health, mental health, family, and nutrition services similar 
        to those provided through Early Head Start programs.
            (10) How the State will address infant and toddler child 
        care needs for populations that have acute barriers to 
        accessing high-quality child care and the State's plan to 
        increase the supply of high-quality child care slots for 
        populations for which the unmet need is greatest, including 
        populations listed in section 658E(c)(2)(M) of the Child Care 
        and Development Block Grant Act of 1990 (42 U.S.C. 
        9858c(c)(2)(M)), with methods such as grants and contracts.
            (11) How the State will, at the option of an Indian tribe 
        or tribal organization in the State, collaborate and coordinate 
        activities with the Indian tribe or tribal organization in the 
        development of the State plan.
            (12) A plan that describes how the State will ensure 
        successful engagement by parents and families in their child's 
        early care and learning and how this plan will promote 
        engagement that continues from infant and toddler programs into 
        preschool programs and beyond.
            (13) How the State will collaborate and coordinate 
        activities with early childhood educators and organizations 
        that foster the professional development and collective 
        engagement of the child care workforce.
    (c) Assurances.--Each such application shall include each of the 
following:
            (1) An assurance that the State will maintain, using the 
        Child Care and Development Fund and the funds made available 
        under section 103(c), the caseload of children that were served 
        using the Child Care and Development Fund on the date of 
        enactment of this Act.
            (2) An assurance that the State will establish and support 
        standards for high-quality child care for infants and toddlers 
        in the State as described in section 105(a)(3).
            (3) An assurance that the State will contribute a 
        percentage toward the cost of activities authorized under 
        section 103(b), toward the cost of activities authorized under 
        section 103(c), and toward the cost of activities authorized 
        under section 103(e), that is equal to the percentage that the 
        State contributes under section 418(a)(2)(C) of the Social 
        Security Act (42 U.S.C. 618(a)(2)(C)) toward the cost of the 
        child care authorized under section 418 of that Act (42 U.S.C. 
        618).

SEC. 105. STATE EXPANSION AND QUALITY ENHANCEMENT ACTIVITIES.

    (a) Expanding Access to High-Quality Child Care.--
            (1) In general.--Using funds made available through an 
        allotment under section 103(b), the State shall reserve at 
        least 80 percent for direct services provided through grants, 
        contracts, or certificates, to expand access to high-quality 
        child care for infants and toddlers and to increase parental 
        options for and access to such care.
            (2) Promotion of quality.--During the period beginning not 
        later than the date on which the allotment is made and ending 
        not later than 6 months after that date, and every third year 
        thereafter, the State shall use the cost of high-quality child 
        care study, described in section 104(b)(4), to ensure that, for 
        all infant and toddler child care slots--
                    (A) the child care is of sufficient quality;
                    (B) the providers of the care are supported along a 
                career pathway to achieve higher levels of training and 
                education; and
                    (C) provider payment rates are sufficient as 
                described in section 104(b)(4)(A)(i).
            (3) Quality standards.--The State shall ensure that all 
        infant and toddler child care providers, who participate in 
        activities funded through the Child Care and Development Fund, 
        meet quality standards by the end of fiscal year 2026, 
        including--
                    (A) ensuring that the providers enable lead 
                teachers and educators, regardless of setting, to 
                receive program quality funds reserved under subsection 
                (b), through grants, contracts, or certificates, to 
                prepare for meeting higher standards of quality and to 
                progress through professional development goals; and
                    (B)(i) offering full-day, full-year care or 
                otherwise meeting the needs of working families;
                    (ii) meeting the requirements described in section 
                104(b)(4)(A)(i)(III);
                    (iii) ensuring individuals working directly with 
                infants and toddlers have the qualifications, 
                knowledge, and skills to promote the healthy social, 
                emotional, cognitive, and physical development of 
                children as appropriate to the children's age, and 
                attain the compensation levels necessary to attract, 
                support, and retain a well-qualified workforce, in a 
                manner aligned with the findings in the study entitled 
                ``Transforming the Workforce for Children Birth Through 
                Age 8: A Unifying Foundation'', issued by the National 
                Academy of Sciences in April 2015;
                    (iv) aligning its activities with the State's Early 
                Learning and Development Guidelines that apply to 
                infants and toddlers and the Head Start Early Learning 
                Outcomes Framework;
                    (v) coordinating activities with other public or 
                private agencies to ensure that, to the extent that 
                services are available in the community, infants and 
                toddlers are referred to local agencies or other 
                appropriate providers, including community-based 
                organizations, for comprehensive health, mental health, 
                family, and nutrition services, similar to those 
                provided through Early Head Start programs; and
                    (vi) engaging with parents in their roles as first 
                teachers and partnering with parents in their child's 
                early care and learning and transition to pre-
                kindergarten or a Head Start program.
            (4) Addressing underserved geographic areas and special 
        populations.--
                    (A) Identification.--Based on a valid needs 
                assessment referred to in section 104(b)(6), the State 
                shall identify geographic areas and special populations 
                described in that section.
                    (B) Increasing availability of child care.--The 
                State shall develop and implement a plan to increase 
                the availability of high-quality child care (including 
                by stabilizing the income of providers of such care)--
                            (i) in geographic areas and for populations 
                        identified under subparagraph (A); and
                            (ii) to the extent practicable, in hard-to-
                        serve areas or populations.
    (b) Enhancing the Quality of Infant and Toddler Child Care.--
            (1) Findings.--Congress finds that the activities described 
        in paragraph (3) are interconnected and that each of the 
        activities is critical to enhancing the quality of infant and 
        toddler child care.
            (2) General authority.--The State shall reserve at least 12 
        percent of funds made available through each allotment made 
        under subsection (b), (c), or (e) of section 103 to carry out 
        activities described in paragraph (3), to increase the quality 
        of child care programs for infants and toddlers in eligible 
        families.
            (3) Activities.--The activities referred to in paragraph 
        (2) shall consist of--
                    (A) activities that improve the skills and 
                competencies of the infant and toddler child care 
                workforce, including competencies specific to working 
                with children who are culturally and linguistically 
                diverse and children with disabilities, by providing a 
                pathway to higher levels of training and education 
                consistent with the findings in the National Academy of 
                Sciences study described in subsection (a)(3)(B)(iii);
                    (B) activities that support training and technical 
                assistance through a statewide network of infant and 
                toddler specialists, infant and early childhood mental 
                health consultants, or coach mentors, that provide 
                onsite assistance directly to providers who receive 
                funds under this Act;
                    (C) activities that provide startup grants, to 
                purchase equipment and materials needed to provide 
                high-quality early care and learning experiences to 
                infants and toddlers, such as cribs, changing tables, 
                safety equipment, infant and toddler curricula, and 
                age- and developmentally appropriate toys; or
                    (D) activities that establish networks of family 
                child care providers to share workforce training and 
                technical assistance.
            (4) Standards.--The State shall use the funds described in 
        paragraph (2) to ensure that infant and toddler child care 
        providers meet relevant standards and shall develop statewide 
        plans to improve the knowledge and competencies of the infant 
        and toddler child care workforce, by implementing 1 or more of 
        the activities described in paragraph (3).
            (5) Coordination.--The State shall coordinate the 
        activities carried out under this subsection with other quality 
        enhancement efforts funded through the Child Care and 
        Development Fund.
    (c) Applicable Requirements.--In carrying out activities under this 
section, a State shall comply with the requirements of this Act and the 
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
seq.).
    (d) Supplement Not Supplant.--Amounts made available under this Act 
shall be used to supplement and not supplant other Federal, State, and 
local public funds expended to provide child care for children under 
age 13.

SEC. 106. TRIBAL APPLICATION.

    To be eligible to receive a grant under this Act through an 
allotment made under section 103(d), an Indian tribe or tribal 
organization shall submit to the Secretary an application, as a 
supplement to the application the tribe or tribal organization submits 
under section 658O(c) of the Child Care and Development Block Grant Act 
of 1990 (42 U.S.C. 9858m(c)). Each such application shall contain such 
information as the Secretary may require, including:
            (1) Information demonstrating that the Indian tribe or 
        tribal organization meets the requirements for a grant or 
        contract on section 658O(c) of such Act.
            (2) At the election of the Indian tribe or tribal 
        organization, a plan--
                    (A) to align programs for child care funded through 
                the Child Care and Development Fund, Head Start 
                (including Early Head Start) programs, early childhood 
                home visitation programs under section 511 of the 
                Social Security Act (42 U.S.C. 711), preschool 
                programs, and early childhood programs relating to 
                Indian and Native Hawaiian culture and language, to 
                create more aligned and seamless early care and 
                learning in tribal communities; and
                    (B) to combine funding for the programs described 
                in subparagraph (A).
            (3)(A) Information describing how the Indian tribe or 
        tribal organization will increase the number of high-quality 
        child care slots for eligible families with Indian or Native 
        Hawaiian children, to ensure, by the end of fiscal year 2026, 
        access to high-quality, culturally and linguistically 
        appropriate infant and toddler child care for such eligible 
        families in the tribal community (referred to in this section 
        as ``universal high-quality child care'').
            (B) The ambitious goals and measurable benchmarks that the 
        Indian tribe or tribal organization will use to demonstrate 
        progress toward achieving universal high-quality child care.

SEC. 107. TRIBAL EARLY CARE AND LEARNING EXPANSION ACTIVITIES.

    (a) In General.--An Indian tribe or tribal organization that 
receives a grant through an allotment made under section 103(d) shall 
use the grant funds to provide, by the end of fiscal year 2026, access 
to high-quality, culturally and linguistically appropriate child care 
(or, in the case of an entity that submits a plan described in section 
106(2), high-quality, culturally and linguistically appropriate early 
care and learning) (including related supports) for infants and 
toddlers for such eligible families in the tribal community.
    (b) Applicable Requirements.--In carrying out activities under this 
section, an Indian tribe or tribal organization shall comply with the 
requirements of this Act and the Child Care and Development Block Grant 
Act of 1990 (42 U.S.C. 9858 et seq.).

                    TITLE II--INVERTED CORPORATIONS

SEC. 201. MODIFICATIONS TO RULES RELATING TO INVERTED CORPORATIONS.

    (a) In General.--Subsection (b) of section 7874 of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(b) Inverted Corporations Treated as Domestic Corporations.--
            ``(1) In general.--Notwithstanding section 7701(a)(4), a 
        foreign corporation shall be treated for purposes of this title 
        as a domestic corporation if--
                    ``(A) such corporation would be a surrogate foreign 
                corporation if subsection (a)(2) were applied by 
                substituting `80 percent' for `60 percent', or
                    ``(B) such corporation is an inverted domestic 
                corporation.
            ``(2) Inverted domestic corporation.--For purposes of this 
        subsection, a foreign corporation shall be treated as an 
        inverted domestic corporation if, pursuant to a plan (or a 
        series of related transactions)--
                    ``(A) the entity completes after February 10, 2016, 
                the direct or indirect acquisition of--
                            ``(i) substantially all of the properties 
                        held directly or indirectly by a domestic 
                        corporation, or
                            ``(ii) substantially all of the assets of, 
                        or substantially all of the properties 
                        constituting a trade or business of, a domestic 
                        partnership, and
                    ``(B) after the acquisition, more than 50 percent 
                of the stock (by vote or value) of the entity is held--
                            ``(i) in the case of an acquisition with 
                        respect to a domestic corporation, by former 
                        shareholders of the domestic corporation by 
                        reason of holding stock in the domestic 
                        corporation, or
                            ``(ii) in the case of an acquisition with 
                        respect to a domestic partnership, by former 
                        partners of the domestic partnership by reason 
                        of holding a capital or profits interest in the 
                        domestic partnership.
            ``(3) Exception for corporations with substantial business 
        activities in foreign country of organization.--A foreign 
        corporation described in paragraph (2) shall not be treated as 
        an inverted domestic corporation if after the acquisition the 
        expanded affiliated group which includes the entity has 
        substantial business activities in the foreign country in which 
        or under the law of which the entity is created or organized 
        when compared to the total business activities of such expanded 
        affiliated group. For purposes of subsection (a)(2)(B)(iii) and 
        the preceding sentence, the term `substantial business 
        activities' shall have the meaning given such term under 
        regulations in effect on February 10, 2016, except that the 
        Secretary may issue regulations increasing the threshold 
        percent in any of the tests under such regulations for 
        determining if business activities constitute substantial 
        business activities for purposes of this paragraph.''.
    (b) Conforming Amendments.--
            (1) Clause (i) of section 7874(a)(2)(B) of such Code is 
        amended by striking ``after March 4, 2003,'' and inserting 
        ``after March 4, 2003, and before February 11, 2016,''.
            (2) Subsection (c) of section 7874 of such Code is 
        amended--
                    (A) in paragraph (2)--
                            (i) by striking ``subsection 
                        (a)(2)(B)(ii)'' and inserting ``subsections 
                        (a)(2)(B)(ii) and (b)(2)(B)'', and
                            (ii) by inserting ``or (b)(2)(A)'' after 
                        ``(a)(2)(B)(i)'' in subparagraph (B),
                    (B) in paragraph (3), by inserting ``or (b)(2)(B), 
                as the case may be,'' after ``(a)(2)(B)(ii)'',
                    (C) in paragraph (5), by striking ``subsection 
                (a)(2)(B)(ii)'' and inserting ``subsections 
                (a)(2)(B)(ii) and (b)(2)(B)'', and
                    (D) in paragraph (6), by inserting ``or inverted 
                domestic corporation, as the case may be,'' after 
                ``surrogate foreign corporation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after February 10, 2016.
                                 <all>