[Congressional Record Volume 149, Number 44 (Wednesday, March 19, 2003)]
[Senate]
[Pages S4018-S4020]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REED (for himself, Mr. Dodd, Mr. Kennedy, and Mrs. 
        Murray):
  S. 668. A bill to amend the Child Care and Development Block Grant 
Act of 1990 to provide incentive grants to improve the quality of child 
care; to the Committee on Health, Education, Labor, and Pensions.
  Mr. REED. Mr. President, I rise today to introduce the Child Care 
Quality Incentive Act of 2003.
  This legislation seeks to address low child care payment or 
reimbursement rates. Payment rates determine the level at which States 
will reimburse child care providers who care for those low-income 
children who receive a subsidy.
  Low payment rates directly affect the kind of care children get and 
whether families can find quality child care in their communities. Low 
payment rates mean limited parental access to quality child care.
  Child care providers are also affected when rates are set below the 
market rate. Low payment rates force child care providers serving low-
income children to cut corners in ways that lower the quality of child 
care such as reducing staff or decreasing salaries and benefits, 
eliminating professional development opportunities, and forgoing books 
and other literacy materials. Providers who avoid this route may simply 
not accept low-income children with subsidies or may even go out of 
business.
  These dilemmas can be avoided if we help states set payment rates 
that keep pace with the marketplace.
  Currently, the Child Care and Development Block Grant, CCDBG, 
requires States to ensure that their rates are sufficient to ``ensure 
equal access'' for eligible families to child care services comparable 
to those available to non-eligible families in the private market. 
CCDBG regulations require states to conduct market rate surveys every

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other year, but there is no requirement for states to actually use the 
market rate surveys to set payment rates.
  Unfortunately, more than half of the States do not make payment rates 
based on the 75th percentile, by which families could access care from 
75 out of 100 local providers, of a current market survey.
  The need for quality child care has never been greater, as our 
welfare reform policy directs more of our low-income families to find 
work and our educational policy demands more of our students and 
schools. Yet, States, due to severe budget crunches, are cutting back 
on rates and other quality initiatives and restricting eligibility for 
subsidies.
  I am pleased to be joined by Senators Dodd, Kennedy, and Murray in 
once again introducing the Child Care Quality Incentive Act, which 
seeks to redouble our child care efforts and renew the child care 
partnership with the States by providing incentive funding to increase 
payment rates.
  Our legislation establishes a new, mandatory pool of funding under 
the Child Care and Development Block Grant, CCDBG. This new funding, 
coupled with mandatory, current market rate surveys, will form the 
foundation for significant increases in state payment rates for the 
provision of quality child care.
  We have received overwhelming support for this bill from the child 
care community, including endorsements from USA Child Care, Children's 
Defense Fund, Catholic Charities of USA, YMCA of USA, the National 
Child Care Association, and a host of organizations and agencies across 
the country.
  Children are the hope of America, and they need the best of America. 
We cannot ask working families to choose between paying the rent, 
buying food, and being able to afford the quality care their children 
need. We've made a lot of progress in improving the health, safety, and 
well-being of children in this country. If we are serious about putting 
parents to work and protecting children, we must invest more in child 
care help for families.
  This year, Congress is slated to reauthorize the Child Care and 
Development Block Grant. The time for action on rates is now. I urge my 
colleagues to join Senators Dodd, Kennedy, Murray, and me in this 
endeavor to improve the quality of child care by cosponsoring the Child 
Care Quality Incentive Act and working to include its provisions in the 
CCDBG reauthorization.
  I ask unanimous consent that the text of this legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 668

       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 Quality Incentive 
     Act of 2003''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Recent research on early brain development reveals that 
     much of a child's growth is determined by early learning and 
     nurturing care. Research also shows that quality early care 
     and education leads to increased cognitive abilities, 
     positive classroom learning behavior, increased likelihood of 
     long-term school success, and greater likelihood of long-term 
     economic and social self-sufficiency.
       (2) Each day an estimated 13,000,000 children, including 
     6,000,000 infants and toddlers, spend some part of their day 
     in child care. However, a study in 4 States found that only 1 
     in 7 child care centers provide care that promotes healthy 
     development, while 1 in 8 child care centers provide care 
     that threatens the safety and health of children.
       (3) Full-day child care can cost $4,000 to $12,000 per 
     year.
       (4) Although Federal assistance is available for child 
     care, funding is severely limited. Even with Federal 
     subsidies, many families cannot afford child care. For 
     families with young children and a monthly income under 
     $1,200, the cost of child care typically consumes 25 percent 
     of their income.
       (5) Payment (or reimbursement) rates, which determine the 
     maximum the State will reimburse a child care provider for 
     the care of a child who receives a subsidy, are too low to 
     ensure that quality care is accessible to all families.
       (6) Low payment rates directly affect the kind of care 
     children get and whether families can find quality child care 
     in their communities. In many instances, low payment rates 
     force child care providers serving low-income children to cut 
     corners in ways that impact the quality of care for the 
     children, including reducing the number of staff, eliminating 
     professional development opportunities, and cutting enriching 
     educational activities and services.
       (7) Children in low-quality child care are more likely to 
     have delayed reading and language skills, and display more 
     aggression toward other children and adults.
       (8) Increased payment rates lead to higher quality child 
     care as child care providers are able to attract and retain 
     qualified staff, provide salary increases and professional 
     training, maintain a safe and healthy environment, and 
     purchase basic supplies, children's literature, and 
     developmentally appropriate educational materials.
       (b) Purpose.--The purpose of this Act is to improve the 
     quality of, and access to, child care by increasing child 
     care payment rates.

     SEC. 3. PAYMENT RATES.

       Section 658E(c)(4) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858c(c)(4)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (C);
       (2) in subparagraph (A), by striking ``to comparable child 
     care services'' and inserting ``to child care services that 
     are comparable (in terms of quality and types of services 
     provided) to child care services''; and
       (3) by inserting after subparagraph (A) the following:
       ``(B) Payment rates.--
       ``(i) Surveys.--In order to provide the certification 
     described in subparagraph (A), the State shall conduct 
     statistically valid and reliable market rate surveys (that 
     reflect variations in the cost of child care services by 
     locality), in accordance with such methodology standards as 
     the Secretary shall issue. The State shall conduct the 
     surveys not less often than at 2-year intervals, and use the 
     results of such surveys to implement, not later than 1 year 
     after conducting each survey, payment rates described in 
     subparagraph (A) that ensure equal access to comparable 
     services as required by subparagraph (A).
       ``(ii) Cost of living adjustments.--The State shall adjust 
     the payment rates at intervals between such surveys to 
     reflect increases in the cost of living, in such manner as 
     the Secretary may specify.
       ``(iii) Rates for different ages and types of care.--The 
     State shall ensure that the payment rates reflect variations 
     in the cost of providing child care services for children of 
     different ages and providing different types of care.
       ``(iv) Public dissemination.--The State shall, not later 
     than 30 days after the completion of each survey described in 
     clause (i), make the results of the survey widely available 
     through public means, including posting the results on the 
     Internet.''.

     SEC. 4. INCENTIVE GRANTS TO IMPROVE THE QUALITY OF CHILD 
                   CARE.

       (a) Funding.--Section 658B of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858) is 
     amended--
       (1) by striking ``There'' and inserting the following:
       ``(a) Authorization of Appropriations.--There'';
       (2) in subsection (a), by inserting ``(other than section 
     658H)'' after ``this subchapter''; and
       (3) by adding at the end the following:
       ``(b) Appropriation of Funds for Grants To Improve the 
     Quality of Child Care.--Out of any funds in the Treasury that 
     are not otherwise appropriated, there is authorized to be 
     appropriated and there is appropriated $500,000,000 for each 
     of fiscal years 2004 through 2008, for the purpose of making 
     grants under section 658H.''.
       (b) Use of Block Grant Funds.--Section 658E(c)(3) of the 
     Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
     9858c(c)(3)) is amended--
       (1) in subparagraph (B), by striking ``under this 
     subchapter'' and inserting ``under this subchapter (other 
     than section 658B(b))''; and
       (2) in subparagraph (D), by inserting ``(other than section 
     658H)'' after ``under this subchapter''.
       (c) Establishment of Program.--Section 658G of the Child 
     Care and Development Block Grant Act of 1990 (42 U.S.C. 
     9858e) is amended by inserting ``(other than section 658H)'' 
     after ``this subchapter''.
       (d) Grants To Improve the Quality of Child Care.--The Child 
     Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 
     et seq.) is amended by inserting after section 658G the 
     following:

     ``SEC. 658H. GRANTS TO IMPROVE THE QUALITY OF CHILD CARE.

       ``(a) Authority.--
       ``(1) In general.--The Secretary shall use the amount 
     appropriated under section 658B(b) for a fiscal year to make 
     grants to eligible States, and Indian tribes and tribal 
     organizations, in accordance with this section.
       ``(2) Annual payments.--The Secretary shall make an annual 
     payment for such a grant to each eligible State, and for 
     Indian tribes and tribal organizations, out of the 
     corresponding payment or allotment made under subsections 
     (a), (b), and (e) of section 658O from the amount 
     appropriated under section 658B(b).
       ``(b) Eligible States.--
       ``(1) In general.--In this section, the term `eligible 
     State' means a State that--
       ``(A) has conducted a statistically valid survey of the 
     market rates for child care services in the State within the 
     2 years preceding the date of the submission of an 
     application under paragraph (2); and

[[Page S4020]]

       ``(B) submits an application in accordance with paragraph 
     (2).
       ``(2) Application.--
       ``(A) In general.--To be eligible to receive a grant under 
     this section, a State shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information, in addition to the information required 
     under subparagraph (B), as the Secretary may require.
       ``(B) Information required.--Each application submitted for 
     a grant under this section shall--
       ``(i) detail the methodology and results of the State 
     market rates survey conducted pursuant to paragraph (1)(A);
       ``(ii) describe the State's plan to increase payment rates 
     from the initial baseline determined under clause (i);
       ``(iii) describe how the State will increase payment rates 
     in accordance with the market survey results, for all types 
     of child care providers who provide services for which 
     assistance is made available under this subchapter;
       ``(iv) describe how payment rates will be set to reflect 
     the variations in the cost of providing care for children of 
     different ages and different types of care;
       ``(v) describe how the State will prioritize increasing 
     payment rates for--

       ``(I) care of higher-than-average quality, such as care by 
     accredited providers or care that includes the provision of 
     comprehensive services;
       ``(II) care for children with disabilities and children 
     served by child protective services; or
       ``(III) care for children in communities served by local 
     educational agencies that have been identified for 
     improvement under section 1116(c)(3) of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6316(c)(3));

       ``(vi) describe the State's plan to assure that the State 
     will make the payments on a timely basis and follow the usual 
     and customary market practices with regard to payment for 
     child absentee days; and
       ``(vii) describe the State's plans for making the results 
     of the survey widely available through public means.
       ``(3) Continuing eligibility requirement.--
       ``(A) Second and subsequent payments.--A State shall be 
     eligible to receive a second or subsequent annual payment 
     under this section only if the Secretary determines that the 
     State has made progress, through the activities assisted 
     under this subchapter, in maintaining increased payment 
     rates.
       ``(B) Third and subsequent payments.--A State shall be 
     eligible to receive a third or subsequent annual payment 
     under this section only if the State has conducted, at least 
     once every 2 years, an update of the survey described in 
     paragraph (1)(A).
       ``(4) Requirement of matching funds.--
       ``(A) In general.--To be eligible to receive a grant under 
     this section, the State shall agree to make available State 
     contributions from State sources toward the costs of the 
     activities to be carried out by the State pursuant to 
     subsection (c) in an amount that is not less than 20 percent 
     of such costs.
       ``(B) Determination of state contributions.--Such State 
     contributions shall be in cash. Amounts provided by the 
     Federal Government may not be included in determining the 
     amount of such State contributions.
       ``(c) Use of Funds.--
       ``(1) Priority use.--An eligible State that receives a 
     grant under this section shall use the funds received to 
     significantly increase the payment rate for the provision of 
     child care assistance in accordance with this subchapter up 
     to the 100th percentile of the market rate determined under 
     the market rate survey described in subsection (b)(1)(A).
       ``(2) Additional uses.--An eligible State that demonstrates 
     to the Secretary that the State has achieved a payment rate 
     of the 100th percentile of the market rate determined under 
     the market rate survey described in subsection (b)(1)(A) may 
     use funds received under a grant made under this section for 
     any other activity that the State demonstrates to the 
     Secretary will enhance the quality of child care services 
     provided in the State.
       ``(3) Supplement not supplant.--Amounts paid to a State 
     under this section shall be used to supplement and not 
     supplant other Federal, State, or local funds provided to the 
     State under this subchapter or any other provision of law.
       ``(d) Evaluations and Reports.--
       ``(1) State evaluations.--Each eligible State shall submit 
     to the Secretary, at such time and in such form and manner as 
     the Secretary may require, information regarding the State's 
     efforts to increase payment rates and the impact increased 
     payment rates are having on the quality of child care in the 
     State and the access of parents to high-quality child care in 
     the State.
       ``(2) Reports to congress.--The Secretary shall submit 
     biennial reports to Congress on the information described in 
     paragraph (1). Such reports shall include data from the 
     applications submitted under subsection (b)(2) as a baseline 
     for determining the progress of each eligible State in 
     maintaining increased payment rates.
       ``(e) Indian Tribes and Tribal Organizations.--The 
     Secretary shall determine the manner in which and the extent 
     to which the provisions of this section apply to Indian 
     tribes and tribal organizations.
       ``(f) Payment Rate.--In this section, the term `payment 
     rate' means the rate of reimbursement to providers for 
     subsidized child care.''.
       (e) Payments.--Section 658J(a) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858h(a)) is 
     amended by inserting ``from funds appropriated under section 
     658B(a)'' after ``section 658O''.
       (f) Allotment.--Section 658O of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858m) is 
     amended--
       (1) in subsection (b)(1), in the matter preceding 
     subparagraph (A)--
       (A) by striking ``section 658B'' and inserting ``section 
     658B(a)''; and
       (B) by inserting ``and from the amounts appropriated under 
     section 658B(b) for each fiscal year remaining after 
     reservations under subsection (a),'' before ``the Secretary 
     shall allot''; and
       (2) in subsection (e)--
       (A) in paragraph (1), by striking ``the allotment under 
     subsection (b)'' and inserting ``an allotment made under 
     subsection (b)''; and
       (B) in paragraph (3), by inserting ``corresponding'' before 
     ``allotment''.

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