[Congressional Record Volume 144, Number 78 (Tuesday, June 16, 1998)]
[Senate]
[Pages S6416-S6420]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL (for himself and D'Amato):
  S. 2178. A bill to amend the National Housing Act to authorize the 
Secretary of Housing and Urban Development to insure mortgages for the 
acquisition, construction, or substantial rehabilitation of child care 
and development facilities and to establish the Children's Development 
Commission to certify such facilities for such insurance, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.


                 Children's Development Commission Act

 Mr. KOHL. Mr. President, today I introduce the Children's 
Development Commission Act. I am pleased to be joined in this by my 
friend, Senator D'Amato. He brings to this endeavor a deep 
understanding of the nation's capital markets and a deep concern for 
the well being of this country's children. In the House of 
Representatives, Representatives Maloney and Baker have already 
introduced a companion measure, H.R. 3637.
  Our legislation is designed to address the credit market's failure to 
provide sufficient long term financing for the building and renovation 
of child care centers, after-school care programs, infant care, and 
family child care homes. Because the profit margin in such centers is 
very low, and the perceived risk is great, lenders are often unwilling 
to lend to child care operations. This is true despite the fact that an 
overwhelming number of studies show a shortage in the supply of quality 
child care--especially in urban areas, in low income areas, and for 
certain types of care (infant care, school age care, off-hour care).
  The Children's Development Commission Act creates a loan guarantee 
program through HUD to provide insurance to lenders willing to put up 
money for child care center mortgages, leases, or renovations. The 
program is modeled closely on the successful Section 232 HUD program 
that provides mortgage insurance for elder-care facilities.
  The bill also creates a ``Children's Development Commission'' or 
``Kiddie Mac'' which: (1) certifies child care development facilities 
eligible for guaranteed financing; (2) establishes the standards 
necessary to make such certification; (3) makes small purpose loans to 
child care facilities for reconstruction and renovation; (4) develops a 
plan to offer low cost liability and fire insurance to child care 
providers; and (5) creates a research foundation to support research 
into child care supply issues, fund pilot programs for improving child 
care, and publishes material for those interested in getting mortgage 
insurance through HUD.

[[Page S6417]]

  Congress will make one $10 million appropriation to fund the Kiddie 
Mac's incorporation and its micro-loan program; after that, a stock 
offering will fund Kiddie Mac until its financial activities and fee 
collection make it self-financing.
  The need, and the will, to take this sort of step to increase the 
supply of quality child care is evident. When I ran for Congress in 
1988, I talked about the importance of child care. At best, I received 
a polite smile of interest, and then the discussion would move on to 
the pressing issues of the day--the environment, the budget deficit, 
health care.
  Today, child care is being discussed earnestly at dinner tables 
across the nation and in Committee rooms all over the Capitol. Almost 
everyone has a personal story about trying to secure good child care, 
about trying to help an employee find good child care, about the 
terrible shortage of quality child care in their town or city.
  We have always talked about the necessities of life as being food, 
clothing and shelter. I think it is time we add a fourth--quality child 
care. It is necessary to give our children the strong start they need. 
It is necessary if we are going to take advantage of the tremendous 
ability to learn in the first three years of life.
  And quality child care is necessary in order for the growing number 
of families in which both parents work, for the growing number of 
single parent families to be able to earn a living, and for businesses 
that want to attract and retain productive, happy employees.
  Unfortunately, by every measure and in every state, quality child 
care is in short supply. And in most areas of the country, the sweeping 
welfare reform we passed last year has exacerbated existing shortages. 
In my State of Wisconsin, the State's welfare reform plan will generate 
the need for 8000 new child care slots in Milwaukee Country alone. And 
in New York City, by the year 2001, there will be 30,000 more children 
who need child care than there are child care spaces for them.
  The shortage is not just one of child care slots, but of quality 
child care slots. One major study showed that seven out of ten child 
care centers provide mediocre care, while one in eight is so inadequate 
that the health and safety of the children are threatened. Another 
survey found that more than half of parents with children in child care 
worry weekly about whether their children are well-served in their 
current arrangements.
  Kiddie Mac will help address these shortfalls in several ways. It 
will lower the costs of those setting up child care facilities, home 
child care, or pre-schools. By guaranteeing child care facility 
mortgages and leases, Kiddie Mac lowers the start-up costs to 
facilities allowing them to pass the savings on to teachers in the form 
of higher salaries and parents in the form of lower fees. Kiddie Mac 
will also provide loan guarantees to facilities that want to upgrade 
and providing micro-loans for small repairs related to licensing. This 
will allow existing centers and homes, even very small ones, to bring 
their facilities up to--and beyond--code.
  Kiddie Mac is a market-based, small-government approach to moving 
capital toward a very wise investment in quality child care. Kiddie 
Mac's services will be available to any organization who can show they 
will provide quality child care: businesses, non-profits, churches or 
synagogues, family home providers, or after-school programs. Decisions 
as to how much and how the care will be provided are left where they 
belong: with the local providers, with local communities, and with the 
parents.
  Mr. President, I ask unanimous consent that the text of the 
Children's Development Act be included in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2178

       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 ``Children's Development 
     Commission Act''.

     SEC. 2. CONGRESSIONAL FINDINGS.

       Congress finds the following:
       (1) The need for quality nursery schools, both full-time 
     and part-time child care centers and after-school programs, 
     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 65 to 70 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.

     SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHABILITATED 
                   CHILD CARE AND DEVELOPMENT FACILITIES.

       Title II of the National Housing Act (12 U.S.C. 1707 et 
     seq.) is amended by adding at the end the following:


     ``mortgage insurance for child care and development facilities

       ``Sec. 257. (a) Purpose.--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 Authority.--The 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) Eligible Mortgages.--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) Approved mortgagor.--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) Principal obligation.--The mortgage shall involve a 
     principal obligation in an amount not to exceed 90 percent of 
     the estimated value of the property or project, or 95 percent 
     of the estimated value of the property or project in the case 
     of a mortgagor that is a private nonprofit corporation or 
     association (as such term is defined pursuant to section 
     221(d)(3)), including--
       ``(A) equipment to be used in the operation of the facility 
     when the proposed improvements are completed and the 
     equipment is installed; or
       ``(B) a solar energy system (as defined in subparagraph (3) 
     of the last paragraph of 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.
       ``(3) Amortization and interest.--The 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

[[Page S6418]]

     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 Commission.--
     The 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) Release.--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.
       ``(f) Mortgage Insurance Terms.--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.
       ``(g) Mortgage Insurance for Fire Safety Equipment Loans.--
       ``(1) Authority.--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) Loan requirements.--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) Insurance requirements.--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.
       ``(h) Schedules and Deadlines.--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.
       ``(i) Definitions.--For the purposes of this section, the 
     following definitions shall apply:
       ``(1) Child care and development facility.--The 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) Equipment.--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.
       ``(3) Mortgage; first mortgage; mortgagee.--The 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).
       ``(j) Limitation on Insurance Authority.--
       ``(1) Termination.--No mortgage may be insured under this 
     section or section 223(h) after September 30, 2005, except 
     pursuant to a commitment to insure issued on or before such 
     date.
       ``(2) Aggregate principal amount limitation.--The 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 Congress evaluating the 
     need for continued mortgage insurance under this section.''.
       ``(k) Regulations.--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.''.

     SEC. 4. INSURANCE FOR MORTGAGES FOR ACQUISITION OR 
                   REFINANCING DEBT OF EXISTING CHILD CARE AND 
                   DEVELOPMENT FACILITIES.

       Section 223 of the National Housing Act (12 U.S.C. 1715n) 
     is amended by adding at the end the following:
       ``(h) Mortgage Insurance for Purchase or Refinancing of 
     Existing Child Care and Development Facilities.--
       ``(1) Authority.--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 structures.--In 
     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 subsections (d) and (e) of section 257 to 
     facilities having mortgages insured under such section.
       ``(3) Refinancing of existing facilities.--In 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) Definitions.--For purposes of this subsection, the 
     terms defined in section 257(i) shall have the same meanings 
     as provided under such section.
       ``(5) Limitation on insurance authority.--The authority of 
     the Secretary to enter into commitments to insure mortgages 
     under this subsection is subject to the limitations under 
     section 257(j).''.

     SEC. 5. CHILDREN'S DEVELOPMENT COMMISSION.

       Title 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:


                  ``children's development commission

       ``Sec. 258. (a) Establishment.--There is hereby established 
     a commission to be known as the Children's Development 
     Commission.
       ``(b) Membership.--
       ``(1) Appointment.--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) 1 member shall be appointed from among 3 individuals 
     recommended by the Secretary of Housing and Urban Development 
     or the Secretary's designee.
       ``(B) 1 member shall be appointed from among 3 individuals 
     recommended by the Secretary of Health and Human Services or 
     the Secretary's designee.
       ``(C) 1 member shall be appointed from among 3 individuals 
     recommended by the Secretary of the Treasury or the 
     Secretary's designee.

[[Page S6419]]

       ``(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 
     members.--Of 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) Terms.--Each appointed member of the Commission shall 
     serve for a term of 3 years.
       ``(4) Vacancies.--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) Chairperson.--The chairperson of the Commission shall 
     be designated by the President at the time of appointment.
       ``(6) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum for the transaction of business.
       ``(7) Voting.--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 pay.--Members 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) Functions.--The Commission shall carry out the 
     following functions:
       ``(1) Certification of compliance.--The 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) Study.--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) Publication.--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 
     enactment of this section.
       ``(3) Small purpose loans.--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 
     to maturity exceeding 7 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) Notification.--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) Liability insurance.--Not later than 12 months after 
     the date on which appointment of initial membership of the 
     Commission is completed, the Commission shall establish 
     standards and guidelines, applicable to mortgage insurance 
     under sections 257 and 223(h) and loans under paragraph (3) 
     of this subsection, requiring 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.
       ``(6) Research foundation.--Not later than 12 months after 
     the date of enactment of this section, the Commission shall 
     submit a report to 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), the purpose of which shall 
     be--
       ``(A) to support research relating to child care and 
     development facilities;
       ``(B) to fund pilot programs to test innovative methods for 
     improving child care; and
       ``(C) 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.
       ``(d) Nondiscrimination Requirement.--
       ``(1) In general.--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 organizations.--The 
     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) Certification.--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) Powers.--
       ``(1) Assistance from federal agencies.--The 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 administration.--The 
     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 
     development.--Upon 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) Mails.--The Commission may use the United States 
     mails in the same manner and under the same conditions as 
     other Federal agencies.
       ``(f) Staff.--
       ``(1) Executive director.--The Commission shall appoint an 
     executive director of the Board, 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) Other personnel.--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) Reports.--Not later than March 31 of each year, the 
     Commission shall submit a report to the President and 
     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 Congress and the 
     President at such other times as the Commission deems 
     desirable.
       ``(h) Definitions.--For purposes of this section, the terms 
     defined in section 257(i) shall have the same meanings as 
     provided under such section.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Commission to carry out 
     this section $10,000,000 for fiscal year 1999, 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).''.

[[Page S6420]]

     SEC. 6. STUDY OF AVAILABILITY OF SECONDARY MARKETS FOR 
                   MORTGAGES ON CHILD CARE FACILITIES.

       (a) Study.--The 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.
       (b) Report.--The Secretary of the Treasury shall submit to 
     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 enactment of this 
     Act.

 Mr. D'AMATO. Mr. President, today I cosponsor the Children's 
Development Commission Act of 1998. I commend my friend and respected 
colleague, Senator Herb Kohl for introducing this critical piece of 
legislation which addresses a serious problem facing American families 
today--the shortage of affordable, quality child care.
  America is facing a shortage of quality child care which is 
approaching crisis levels. This shortage bears most heavily on working 
families, including young working single mothers. Every day more than 5 
million children under age 13 are left unattended after school. The 
parents of these children deserve meaningful, affordable child care 
options.
  The high cost of child care impacts directly on families, affecting 
their ability to pay the rent or mortgage, to put food on the table or 
to save for their children's education. The lack of decent, high 
quality child care also impedes the development of critical learning 
skills these children will need in order to succeed later in life. 
Social and medical research continues to stress the importance of the 
first three years of development on a child's well-being and ability to 
learn.
  In New York, the average cost of day care is over $6,000 per year--
and many families end up paying nearly $10,000 per year. Many families 
are unable to locate quality child care at all, as evidenced by the 
long waiting lists at existing centers. In New York City, approximately 
28,000 families are on waiting lists for assistance under the Child 
Care Development Block Grant Program.
  Mr. President, as more families make the difficult transition from 
welfare to work, waiting lists for affordable care and assistance will 
likely increase significantly. As a result of welfare reform, by the 
year 2002, there may be as many as 135,000 additional infants and 
toddlers in New York who will need affordable quality child care.
  These high costs and the overall shortage of quality care are found 
in all areas of my home State--cutting across urban and rural 
boundaries. The New York Human Services Administration estimates that 
more than two-thirds of children in the Morrisania section of the Bronx 
and more than seventy percent of children in the Brownsville section of 
Brooklyn are in need of child care.
  This shortage extends to rural areas of New York as well--for 
example, in Allegany, Hamilton, Washington and Yates counties there are 
no registered programs for school age children. Twenty of my State's 
sixty two counties have three or fewer registered school-age programs.
  The Child Care Development Commission Act will employ a number of 
cost-effective strategies to increase the availability and 
affordability of child care throughout the nation.
  First, the legislation would reduce lender risk by creating a new 
insurance authority within the Department of Housing and Urban 
Development's Federal Housing Administration (FHA). Using this new 
authority, FHA will provide loan guarantees for child care facilities. 
This will in turn spur the provision of private capital for the 
construction of new child care centers, the improvement of existing 
facilities and the cost of purchasing and installing fire safety 
equipment.
  Second, the Act will create a new streamlined Commission--known 
informally as ``Kiddie Mac.'' The Commission will provide reasonable 
low-cost ``micro-loans'' for the renovation and improvement of existing 
facilities. In addition, the Commission will certify that facilities 
receiving FHA insurance meet state and local standards, such as 
licensing and child safety requirements.
  Mr. President, The Children's Development Commission Act is an 
important step in ensuring that child care facilities can gain access 
to private market credit. Representatives Carolyn Maloney and Richard 
Baker have introduced companion legislation (H.R. 3637) in the House of 
Representatives. They deserve our praise for their diligence in 
addressing this issue.
  The Children's Development Commission Act makes an investment in our 
children, an investment in our families and an investment in our 
future. I look forward to working with my Senate and House colleagues 
for its enactment.
                                 ______