[Senate Report 109-130]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 199
109th Congress                                                   Report
                                 SENATE
 1st Session                                                    109-130

======================================================================



 
                    CARING FOR CHILDREN ACT OF 2005

                                _______
                                

                August 31, 2005.--Ordered to be printed

   Filed, under authority of the order of the Senate of July 29, 2005

                                _______
                                

Mr. Enzi, from the Committee on Health, Education, Labor, and Pensions, 
                        submitted the following

                              R E P O R T 

                         [To accompany S. 525]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 525) to amend the Child Care 
and Development Block Grant Act of 1990 to reauthorize the Act, 
to improve early learning opportunities and promote school 
preparedness, and for other purposes, having considered the 
same, reports favorably thereon with an amendment in the nature 
of a substitute and recommends that the bill (as amended) do 
pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for legislation..............................2
III. Legislative history and committee action.........................4
 IV. Explanation of legislation and committee views...................4
  V. Cost estimate...................................................15
 VI. Application of law to the legislative branch....................17
VII. Regulatory impact statement.....................................17
VIII.Section-by-section analysis.....................................17

 IX. Changes in existing law.........................................26

                         I. Purpose and Summary

    It is the purpose of S. 525, the Caring for Children Act of 
2005 to renew, improve, and strengthen the Child Care and 
Development Block Grant Act of 1990 for the next 5 years. The 
Caring for Children Act of 2005 is designed to maintain State 
flexibility and improve access to high quality child care for 
low income working families.

                II. Background and Need for Legislation

    The current system of child care assistance, which is 
supported by Federal, State, and local funds, is largely a 
result of Federal legislative activity over the last 16 years. 
In 1988, the Family Support Act, which at the time represented 
groundbreaking legislation to reform the Aid to Families with 
Dependent Children (AFDC) program, for the first time provided 
a child care entitlement for families on welfare. Originated by 
the Senate Finance Committee, the Family Support Act created a 
child care entitlement for AFDC parents who were working, 
enrolled in job training, or enrolled in an educational 
program, and for parents needing transitional child care 
assistance for 12 months after leaving welfare (Transitional 
Child Care or TCC).
    In 1990, two more child care programs were created: the 
Child Care and Development Block Grant (CCDBG) program under 
the jurisdiction of the Senate Labor Committee (now renamed the 
Senate Health, Education, Labor, and Pensions Committee), and 
the title IV-A At Risk Child Care program under the 
jurisdiction of the Senate Finance Committee. Both of these 
programs were designed to help low income working families, and 
CCDBG was designed to improve the quality of child care as 
well. Unlike the Family Support Act child care programs, these 
two new programs were block grants to the States (not 
individual entitlements) and were not designed to assist 
welfare families.
    In 1996, the four Federal child care programs (the AFDC 
child care entitlement, the Transitional Child Care 
entitlement, the IV-A At Risk Child Care program and the Child 
Care and Development Block Grant) were consolidated under the 
Personal Responsibility and Work Opportunity Reconciliation Act 
(PRWORA). The Act eliminated the entitlement to child care 
assistance for parents receiving welfare and for those 
transitioning from welfare to work. The three Finance Committee 
programs were consolidated into one funding stream referred to 
as mandatory funding because the funding is specified in law 
and does not need to compete against other funding in the 
regular appropriations process. Funding for the Child Care and 
Development Block Grant (CCDBG) remained under the jurisdiction 
of the Senate Health, Education, Labor, and Pensions (HELP) 
Committee and was retained as a discretionary program.

                           CHILD CARE FUNDING

    Since funding for child care is made through a combination 
of discretionary and mandatory funding, the U.S. Department of 
Health and Human Services (HHS) refers to the combined funding 
streams as the Child Care and Development Fund (CCDF). Since 
1988, funding for child care has grown dramatically. Federal 
child care spending through the CCDF has increased by over 200 
percent since 1996. However, in the absence of Temporary 
Assistance for Needy Families (TANF) reauthorization which has 
been extended 10 times over the last 4 years, funds for child 
care have not been increased since fiscal year 2002. 
Discretionary funding for CCDBG is $2.1 billion for fiscal year 
2005. Mandatory funding is set at $2.7 billion, for a total of 
$4.8 billion in direct Federal spending for fiscal year 2005. 
HHS estimates that about 2.3 million children receive child 
care assistance today.
    In addition to Federal dollars provided through mandatory 
and discretionary funding, States currently may transfer up to 
30 percent of their TANF block grant to CCDBG. In fiscal year 
2003, States transferred $1.9 billion to the block grant.
    States also may spend additional TANF money directly on 
child care services outside of the CCDBG. In fiscal year 2003, 
States reported spending $1.7 billion of their TANF grants for 
child care directly within the TANF program. From 1996 through 
2000 TANF direct expenditures for child care doubled. In fiscal 
year 2000 TANF direct child care funding was at an all time 
high of $2.2 billion. However, since 2001 spending has been 
stagnant at the $1.6 billion to $1.7 billion range.
    Expenditure data show that in fiscal year 2003, States 
spent more than $9 billion in Federal and State money from the 
Child Care and Development Block Grant (this amount includes 
spending from the TANF transfers to the CCDBG). In addition, 
States spent over $2 billion on child care within the TANF 
system. Therefore, in total, over $11 billion was spent on 
child care through the CCDBG and TANF in fiscal year 2003 (of 
which $8.9 billion were Federal funds).
    As a result of the CCDF, TANF, and Social Services Block 
Grant (SSBG) spending for child care services, 2.3 million 
children are estimated to have received child care assistance 
in fiscal year 2004.
    States may use CCDBG, TANF and the SSBG Grants to directly 
support child care for low-income families. Other Federal 
programs also provide funds for early childhood development and 
targeted assistance for children. These include Head Start 
(funded at $6.8 billion in fiscal year 2005), the Child and 
Adult Care Food Program ($2.1 billion), the Individuals with 
Disabilities Education Act (IDEA) preschool and infant/toddler 
grants ($826 million), and, for after-school and weekend 
activities for school age children, the 21st Century Community 
Learning Centers ($991 million). In total, combined annual 
funding for child care, early education and targeted assistance 
programs is estimated by HHS to exceed $19 billion.

               ASSISTANCE FOR LOW-INCOME WORKING FAMILIES

    Between June 1996 and June 2004, the welfare caseload 
dropped by 2.3 million families. The majority of welfare 
leavers are now employed. The share of TANF families working or 
participating in work-related activities while receiving TANF 
was 626,000 in Fiscal Year 2003 (the most recent year for which 
data are available). Between 1996 and 2004, the number of 
working single mothers grew from 6.3 million to 7.3 million. 
And, according to Congressional Research Service, estimates 
based on analysis of U.S. Census data, the employment rate for 
single mothers was 63.5 percent in 1996, and has increased to 
70 percent in 2004. Many of these parents need child care 
assistance to stay employed.
    The committee believes that the challenge for Congress this 
year is to build on the 1996 welfare reform law--by putting 
even more Americans on the path to self-reliance. The increase 
in the number of women participating in the labor force, and 
the number of these women who are the sole or primary financial 
supporters of their children are the most important factors 
affecting the demand for child care.
    Increasingly, the affect of child care on children also has 
become a significant public issue. Research in the field of 
child development demonstrates that low-income children can 
benefit from child care with an early childhood development 
focus. Therefore, the quality of child care available is 
important so that all young children are developmentally 
prepared to enter and succeed in school. The Caring for 
Children Act strengthens the Federal commitment to foster 
quality environments and early learning experiences for young 
children.
    Concerns about the supply, quality and affordability of 
child care for many low-income families led to a national 
debate over the nature and extent of the Nation's child care 
problems and what, if any, Federal intervention would be 
appropriate. Federal lawmakers recognized the need to ensure 
that parents have an affordable choice and access to child care 
so that parents participate in the workforce.

             III. Legislative History and Committee Action

    On March 3, 2005, Senators Alexander, Dodd, Enzi, Kennedy, 
Hatch, and Roberts, introduced S. 525, the Caring for Children 
Act of 2005. On March 9, 2005, the committee met in Executive 
Session to consider the Caring for Children Act of 2005. 
Senator Enzi offered an amendment as a complete substitute and 
it was agreed to unanimously by all members present.

           IV. Explanation of Legislation and Committee Views


            Title I--Child Care and Development Block Grant


                                OVERVIEW

    The Caring for Children Act of 2005 reauthorizes the Child 
Care and Development Block Grant (CCDBG) through 2010 at a 
level of $2.3 billion for fiscal year 2006, $2.5 billion for 
fiscal year 2007, $2.7 billion for fiscal year 2008, $2.9 
billion for fiscal year 2009, and $3.1 billion for fiscal year 
2010. The current 2005 appropriation is $2.1 billion.

                             PROGRAM GOALS

    The Caring for Children Act amends the existing goals to 
emphasize that the Block grant is intended to serve both low-
income working families who receive cash assistance and those 
who do not. It continues to provide States maximum flexibility 
in developing child care programs and policies and promotes 
parental choice so that parents can select the type of child 
care and setting that they prefer.
    The legislation creates three new goals: (1) To assist 
States in improving the quality of child care available to 
families; (2) to promote school preparedness by encouraging 
children, families and care-givers to engage in developmentally 
and age appropriate activities in child care settings that will 
improve children's social, emotional and behavioral skills and 
foster their early cognitive, pre-reading and language 
development and prenumeracy and mathematics skills; and (3) to 
promote parental and family involvement in the education of 
their young children in child care settings.
    The new goals that have been added to encourage States to 
improve the quality of child care and to promote cognitive 
development and school readiness are consistent with the 
President's early childhood education initiative, Good Start, 
Grow Smart, designed to address the cognitive and other 
developmental needs of young children so that they are prepared 
to enter and succeed in school.

                              LEAD AGENCY

    The committee bill amends the act to let States designate a 
collaborative agency or establish a joint interagency office to 
serve as the lead agency responsible for administering the 
program.

                        STATE PLAN REQUIREMENTS

    The Caring for Children Act modifies the State plan in 
several ways. The legislation asks States to collect and 
disseminate information to both parents of eligible children 
and child care providers about: the quality and availability of 
child care services; resources to assist families in obtaining 
child care; research and best practices on children's 
development; and, other programs and services for which 
families may be eligible, including the food stamp, WIC, 
Medicaid and SCHIP programs.
    This legislation requires States to describe partnerships 
between public and private entities that will increase the 
supply and quality of child care services, and coordination of 
child care services provided by this act with other child care 
and early childhood education programs, such as Head Start, 
Early Reading First, Even Start, Ready to Learn television, 
Part C and Part B 619 of IDEA and State-sponsored pre-
kindergarten.
    Beginning in 2006, State plans will contain the outline of 
the State's strategy to address the quality of child care 
available to children in that State. States will report on the 
use of quantifiable, objective measures for evaluating the 
quality of child care services and progress in improving child 
care quality.
    Finally, States are asked to address factors that can make 
finding care difficult for some parents. States will report how 
the State is working to meet the child care needs of parents 
eligible for assistance who have children with special needs, 
work non-traditional hours, or require infant and toddler care. 
The intent of the language in this section is to ensure that 
State redetermination policies do not interfere with parents' 
ability to maintain employment while maintaining their 
eligibility for assistance. The committee encourages States to 
explore approaches to eligibility redetermination that support 
the work schedules of families receiving assistance, such as: 
the provision of extended office hours (including office hours 
before 8 a.m., after 6 p.m., or on the weekend); and the use of 
postal mail or electronic communications such as communications 
by telephone, fax, or electronic mail, and provision of a 
receipt providing confirmation that required documents have 
been submitted.

                APPLICATION AND STATE PLAN REQUIREMENTS

    Under current law, each State that applies for a Federal 
block grant is required to submit a State plan to the Secretary 
of HHS. The State plan is designed to ensure that States are 
complying with minimal Federal guidelines before receiving 
their grant. States are asked to certify that parents have 
unlimited access to their children while in care and the 
ability to choose their child's care provider and setting. 
States also must assure compliance with State licensing, health 
and safety requirements, address the child care needs of 
certain population groups, and substantiate that payment rates 
for child care services are sufficient to ensure equal access 
to services available to children not eligible for subsidized 
care.
    The Caring for Children Act enhances the State plan in 
several ways to improve the quality of child care services 
provided to eligible families. This includes encouraging States 
to: (1) Collect and disseminate information to parents to 
assist them in making informed child care choices; (2) put in 
place procedures and policies to protect working parents such 
as providing assistance for eligible families for at least 6 
months before re-determining eligibility; (3) coordinate this 
program with other Federal, State and local programs (including 
Head Start, Early Head Start, Early Reading First, Title I 
preschool program, Part 619 and Part C of IDEA, Ready to Learn 
television, State pre-kindergarten programs and other early 
childhood education programs); (4) describe any training 
requirements that are in effect that are designed to enable 
childcare providers to promote the social, emotional, physical, 
and cognitive development of children; (5) encourage 
partnerships with private and other public entities to leverage 
existing service delivery systems of early childhood and 
increase the supply and quality of childcare services; (6) 
address the child care needs of parents eligible for child care 
services who have children with special needs, work 
nontraditional hours, or require child care services for 
infants or toddlers; and (7) inform parents receiving 
assistance under a program funded under part A of Title IV of 
the Social Security Act (TANF) and low-income parents about 
eligibility for assistance under this subchapter.
    Beginning in 2006, State plans will contain the outline of 
the State's strategy to address the quality of child care 
available to children in that State. States will report on the 
use of quantifiable, objective measures for evaluating the 
quality of child care services and its progress in improving 
child care quality. The committee does not intend or desire to 
create any Federal standards for quality of child care and 
intends for States to have complete discretion in fulfilling 
these provisions.

                CHILD CARE RESOURCE AND REFERRAL SYSTEM

    The Caring for Children Act allows States to use block 
grant funds to support child care resource and referral 
organizations. State and local child care resource and referral 
agencies (CCR&R) are often a community's vital link between 
parents and child care providers. Most States have in place a 
comprehensive child care resource and referral network that 
supports families in finding child care; compiles, analyzes, 
and shares information with parents, providers and communities 
on the supply, cost, and quality of child care and the 
availability of child care subsidies; and, supports individuals 
and programs providing care for children. Child care resource 
and referral organizations can be a cost-effective resource 
because of their ability to leverage public dollars with 
contributions from private sources.

                 PAYMENT RATES AND MARKET RATE SURVEYS

    Under current law, States are required to set payment rates 
that are sufficient to ensure equal access for eligible 
children to comparable child care services in the State for 
children who are not eligible for assistance. Federal 
guidelines suggest payment rates set at or above the 75th 
percentile as a benchmark States should consider in providing 
equal access.
    States use a variety of means to determine and establish 
reimbursement and payment rates for subsidized child care. 
According to the Government Accountability Office, most States 
report using the results of market rate surveys to help set 
these rates but also report considering other factors such as 
budgets, the age group of the child needing care, and the 
geographic location of the care. The committee recognizes and 
intends to maintain the flexibility that States currently have 
to design and implement payment and reimbursement rates in ways 
that reflect their particular circumstances consistent with 
equal access.
    The Caring for Children Act requires the State to conduct a 
statistically valid survey of the market rates for child care 
services in the State within 2 years preceding the date of 
submission of the application (although the committee 
encourages States to conduct their survey as close as possible 
to the development of the State plan) and to describe how the 
State will set payment rates to reflect the results of the 
market rates survey without reducing the number of families 
served. However, this requirement is not intended to encourage 
a State to increase the number of families assisted before it 
increases payment rates. This requirement is not intended to 
preclude a State from raising payment rates if the State has 
previously found it necessary to reduce the number of families 
assisted for other programmatic or fiscal reasons.
    The committee bill further requires States to publish the 
results of the survey within 30 days. Additionally, if in a 
fiscal year a State receives funds in an amount that exceeds 
the funds it received in fiscal year 2005 to carry out the 
CCDBG, the State is encouraged to consider using a portion of 
the excess to increase payment rates, support the establishment 
of tiered payment rates or to support payment rate increases 
for child care for children in communities served by elementary 
and secondary schools in need of improvement. In addition, the 
committee encourages States to examine the usual and customary 
practices with regard to payment for child absentee days.
    The committee bill preserves the equal access standard that 
State payment rates be sufficient to provide children receiving 
CCDBG funded assistance equal access to comparable child care 
services available to families which are not financially 
eligible to receive subsidy assistance. The committee reminds 
States that a key factor of equal access is determined by the 
degree to which low income families have access to care that is 
of comparable quality to other families.
    The provision on payment rates differentiation clarifies 
that nothing in the CCDBG statute is intended to prohibit 
States from having differentiated payment rates using such 
factors as geographic location of child care providers, age or 
particular needs of children (such as children with special 
needs and children served by child protective services), and 
care provided during weekends and other nontraditional hours. 
This provision is not intended to prevent States from 
developing and implementing differential rates for other 
appropriate reasons, such as a tiered rate structure which 
permits higher payments for care with specific quality 
standards.
    The committee intends to maintain flexibility in the ways 
in which the State gathers information used to inform the 
process as they set payment and reimbursement rates. The 
committee recognizes that there are multiple ways States 
actually survey the child care market. Some do telephone or 
mailed surveys to a sample of providers, others rely on the 
data collected by resource and referral agencies in the course 
of maintaining an accurate data base. Research indicates that 
both of these approaches can be statistically valid. 
Additionally, child care markets vary across States based on 
population demographics and density, culture, licensing and 
subsidy policies, provider practices and parent preferences, to 
name a few. A market rate survey that works in New York may not 
in a rural State such as Wyoming or Utah. Similarly, in a rural 
State, there may be little variation in the cost of care across 
geographic areas and types of care, while in other States child 
care center care may cost twice as much in metropolitan as 
rural areas. In one case, the cost of a more complex survey may 
be justified, in another case not. Because of these variances, 
the committee has asked the Secretary to provide technical 
assistance to States on the design and implementation of 
statistically valid market rate surveys.

                           CHILD CARE QUALITY

    The Caring for Children Act of 2005 increases from 4 to 6 
percent the amount of the total block grant that a State must 
spend on activities to improve the quality of child care 
provided to eligible families in that State, and establishes 
permissible uses for those funds. The quality set-aside may be 
used to support: programs that provide training, education, and 
other professional development activities to enhance the skills 
of the child care workforce, including informal caregivers; 
activities to enhance early learning and foster school 
readiness; initiatives to increase the retention and 
compensation of child care providers; and, other activities 
deemed by the States to improve the quality of child care 
services (for children up to age 13) provided in the State.
    In recognition of the importance of the quality of child 
care on all aspects of child development, including cognitive 
development, the bill seeks to emphasize the importance of 
early childhood development and encourages States to improve 
the quality of child care.
    Knowledge about children's learning has expanded greatly 
during the past 2 decades. Research in the neurobiological and 
behavioral sciences related to young children suggests the 
importance of the first years of life for healthy brain 
development. From birth through age 5, children rapidly develop 
the capabilities on which subsequent development builds. In 
addition to linguistic and cognitive gains, children exhibit 
dramatic progress in their emotional and social capacities. 
According to child development expert Dr. T. Berry Brazelton:

          A child's experiences in the first months and years 
        of life determine whether he or she will enter school 
        eager to learn or not. By school age, family and 
        caregivers have already prepared the child for success 
        or failure. The community has already helped or 
        hindered the family's capacity to nurture the child's 
        development.

    High quality child care involves much more than the 
essential ingredients of love, nurture, and care. The committee 
included school preparedness activities as a permissible use to 
encourage States to invest in initiatives that will help foster 
children's social and cognitive skills, including literacy, 
numeracy, and language and mathematics skills. These skills 
provide the foundation for school readiness and are easily 
attainable when young children are exposed to language-rich 
environments with caregivers who engage them in interactive 
activities, promote curiosity and challenge children to develop 
self-confidence and problem-solving skills.
    While many of a State's school preparedness activities are 
likely to be directed at preschool children, such activities 
also concern younger or older children. A State's 
responsibilities under CCDBG include providing child care 
services for children up to age 13 (or, at State option, 19 
when the child is physically or mentally incapable of caring 
for himself or herself or under court supervision). School 
preparedness is a continuing process and does not stop simply 
because a child has entered school.
    There is also general agreement among experts that the ways 
that parents, families and other caregivers relate and respond 
to a young child directly affect cognitive development. 
Research suggests that the quality of child care and early 
education is ultimately dependent on the quality of the 
relationship between the caregiver and child. Studies indicate 
that children are more advanced in all realms of development 
when their parents, teachers or caregivers provide regular 
verbal and cognitive stimulation, are sensitive and responsive, 
and give generous amounts of attention and support in safe and 
healthy environments.
    Based on this research, the Caring for Children Act 
stipulates permissible uses for the quality set-aside to help 
ensure that States spend their quality allocation on activities 
that have been proven to improve the quality of child care. 
Beginning in 2006, States are asked to report how these funds 
are used.
    The committee notes the importance of States evaluating and 
assessing child care programs in order to ensure their 
continued high quality and identify and correct weaknesses and 
has authorized such evaluations and assessments as allowable 
uses. However, nothing in this section should be construed to 
require formal testing of pre-school age children.
    The committee has allowed States to exercise broad 
discretion in additional quality activities (such as enforcing 
compliance with State licensing requirements and State and 
local health and safety standards) so long as those activities 
can be directly linked to improving child safety, child health, 
child-well being, or school preparedness and are capable of 
being measured for outcomes. This requirement is intended to 
ensure that States consider the connection between a proposed 
activity and desired outcome goals, but it is not intended to 
require States to establish, track, or determine child outcomes 
in order for a particular activity to be allowable; it is 
sufficient that the State has determined that measurement of 
outcomes is possible in relation to child safety, child well-
being, or school preparedness. The committee does not require 
States to actually measure or produce such outcomes in order to 
support its discretionary quality activities.

               DATA COLLECTION AND REPORTING REQUIREMENTS

    Under current law, lead State agencies are required to 
collect and submit data regarding the children, families, and 
child care providers participating in the program on both a 
quarterly and annual basis. The quarterly report collects 
disaggregate data for each family receiving child care 
assistance, and the annual report collects aggregate numbers 
over the course of a fiscal year.
    The committee bill streamlines data requirements so that 
lead agencies are only required to submit quarterly reports. 
The fourth quarterly report each year would preserve some of 
the data elements formerly required in the annual report. For 
any new requirements, States would need to begin submitting 
data 2 years from the date of enactment of the Act. The bill 
provides the Secretary with the authority to grant waivers from 
the 2 year requirement if a State can show that it has plans to 
procure a data system.
    The bill deletes reporting elements that have proven to be 
unnecessary: receipt of housing assistance, receipt of food 
stamps; receipt of ``other'' assistance programs; and length of 
subsidy receipt. The bill requires a single data element 
regarding whether a family receives assistance under TANF or 
separate maintenance of effort State programs, and clarifies 
that the cost of child care data element should require both a 
statement about the amount of the State's subsidy payment and a 
separate statement of the amount of the family's co-payment. 
The bill clarifies that data on the type of care provided to a 
family should include all those types listed in the 
subchapter's definition of eligible child care provider.
    New data elements are added: household size, whether the 
parent reports that the child has an Individualized Education 
Plan or an Individualized Family Services Plan under IDEA, and 
case closure codes for each family that no longer receives 
child care assistance under the subchapter.
    States will no longer have to report an annualized 
unduplicated count of the number of children and families 
served. A requirement to submit data on the manner and number 
of parents receiving consumer education information is moved to 
the biennial State plan. In the fourth quarterly report of the 
year, lead agencies will be required to submit some annual 
information formerly required in the annual report: the annual 
number and type of child care providers receiving payments 
under the subchapter, and the annual number of those payments 
made by type of child care provider through vouchers, under 
contracts, or by payment to parent.
    The bill would also require States to collect monthly data 
on the number of children and families that receive child care 
assistance, submit this information in their quarterly reports, 
and to post this information on their websites.

                         REPORTING REQUIREMENTS

    Current law requires the Secretary of HHS to file biennial 
reports to Congress summarizing and analyzing the disaggregate 
and aggregate data reports that States submit, as well as other 
relevant information.
    The committee bill updates the current requirements for the 
Secretary to summarize and analyze State collected data on 
children and families, requiring that starting in April 2006, 
and then on an annual basis, the Secretary submit reports 
summarizing and analyzing State data provided on children and 
families, with regard to activities to improve the quality of 
child care, and in State plans. The language adds a requirement 
that the Secretary include information on the supply, demand, 
and quality of child care, early education, and non-school-hour 
programs, and a progress report that describes State progress 
in meeting the new data requirements, plans for technical 
assistance to help States meet these requirements, and the 
explanation of any barriers States are facing in meeting the 
timeline for reporting on these new requirements. The Secretary 
must post these reports on the HHS website no later than 30 
days after submitting them to the relevant Congressional 
committees.

               NATIONAL ACTIVITIES: INFANTS AND TODDLERS

    Many States are experiencing problems with access to 
quality, affordable infant and toddler care. This, combined 
with the increase in the number of mothers with babies and 
toddlers in the workforce, makes the need for quality child 
care even more critical. Approximately 60 percent of mothers 
with children under age 3 are in the workforce, at least on a 
part-time basis.
    The committee has included an authorization for a $100 
million set-aside, subject to the availability of appropriates 
for this purpose. With this authorization, the committee 
intends that States maintain the flexibility that they now have 
to coordinate activities to enhance infant and toddler child 
care. States are encouraged to continue to support activities 
under the set aside that are designed to protect the health and 
well-being of infants and toddlers; offer specialized training 
for such providers that emphasizes the unique developmental 
needs of infants and toddlers; create statewide networks of 
specialists on infants and toddlers, to provide training and 
consultations for such providers who are center-based child 
care providers, group home child care providers, or relatives 
of the infants and toddlers; and establish local networks of 
support for family child care home providers and other 
activities to improve the quality and availability of infant 
care.
    Research indicates that the strongest effects of quality 
child care are found with at-risk children--children from 
families with the fewest resources and under the greatest 
stress. Yet, at-risk babies and toddlers receive some of the 
poorest quality care that exists in communities across the 
United States resulting in poorer cognitive, social, and 
emotional developmental outcomes. Research confirms that most 
child care centers do not meet infants and toddlers needs for 
health, safety, nurturing relationships, and learning. A 
child's first 3 years are a critical time for child 
development. Numerous studies show that high quality care 
improves school readiness and prevents crime in the long-term. 
It is especially critical that access to high quality infant 
and toddler care be expanded to allow more parents who must 
work to leave their children in a safe and nurturing 
environment while they work.
    The committee recognizes the need for a toll-free hotline 
that is assisting families nationwide in accessing local 
information on child care options and providing consumer 
education and has authorized $1 million, subject to the 
availability of appropriations for such purposes.

           FEDERAL ELIGIBILITY GUIDELINES AND DIRECT SERVICES

    The Caring for Children Act eliminates the Federal income 
limit for eligibility, previously set at 85 percent of the 
State median income, which included families at both the lowest 
and more moderate income levels. Across all States 85 percent 
of SMI for a family of three ranged from $53,940 a year in 
Connecticut to $30,156 in Mississippi for a family of the same 
size. The committee recognizes that there is wide variation in 
cost of living and in the expense of child care between and 
within States. In some areas, child care costs can potentially 
limit low-income families from absorbing the costs of child 
care relative to the costs of living and working in a 
particular State.
    Many potentially eligible children may not receive 
subsidies due to limited resources. ``According to the 
Government Accountability Office, since January 2001, two-
thirds of the States have made key changes that affect the 
availability of child care assistance (some expanding access to 
child care subsidies and some limiting access to child care 
subsidies). Of the 49 States that responded to GAO's survey, 48 
States responded that TANF families, transitioning families, 
and low income working families are eligible for assistance. 
However, States often give TANF and transitioning families a 
higher priority when program resources are limited. In over 
half the States, not all eligible families who apply for 
assistance receive it.'' By eliminating the Federal maximum 
income threshold, the committee does not intend for States to 
restrict access to child care assistance to only welfare 
recipients.
    However, the demand for child care services and the number 
of eligible families in need of subsidies may be overestimated 
because potentially not all low-income parents need subsidized 
child care. In fact, not all parents who receive welfare or are 
transitioning off welfare are working, and many parents make 
in-home or other informal care arrangements with friends or 
relatives instead of applying for child care assistance through 
the block grant.
    Estimates of subsidies needed by children through CCDBG and 
TANF might be reduced further by taking into account the 
availability of other programs and funding sources serving 
children, including State-funded pre-kindergarten programs and 
Head Start. However, the part-time nature of these programs, on 
average 3 hours per day, presents very real challenges to 
working parents who need care for more than 3 hours a day, 
particularly parents on welfare who are required to work 20-30 
hours per week. Therefore, the committee encourages States and 
local governments to help child care providers coordinate with 
Head Start and State pre-school programs to ensure that 
children receive continuity of care and education while their 
parents work. A well integrated system of child care and 
education will help to ensure available resources provide child 
care services to more families.
    The committee received comments that States might interpret 
the elimination of a Federal eligibility limit as a suggestion 
that assistance provided through the block grant should be 
targeted to TANF families only. This is not the intent of the 
committee. The legislation amends the CCDBG goals to clarify 
the congressional intent to provide assistance to low-income 
working families, not exclusively those on or transitioning off 
TANF. States and territories must spend 70 percent of their 
mandatory child care money to subsidize child care for TANF 
families, families transitioning off TANF, and families at risk 
of becoming dependent on public assistance.
    The Caring for Children Act has included a new requirement 
that States also must ensure that 70 percent of the State grant 
is used to provide direct services to low-income working 
families. Though these services will be defined by the States, 
the committee intends at a minimum, to include services that 
are designed to assist families with the purchase of child care 
from an eligible child care provider such as vouchers for 
families and contracts and grants with child care providers in 
the definition of direct services.

                      CHILDREN WITH SPECIAL NEEDS

    Families with children with disabilities often have 
difficulty finding high quality child care for their children. 
This problem is compounded for many low-income families. Early 
intervention services for pre-school age children can help 
identify, address, and sometimes prevent cognitive, physical 
and emotional disabilities at a young age. Unfortunately, many 
child care professionals have no experience with disabled 
children making accessing quality child care for children with 
special needs a challenge for many families. Fortunately, in 
addition to CCDBG there are several Federal programs that have 
been designed specifically to respond to the needs of children 
with special needs.
    First, the Americans with Disabilities Act (ADA) prevents 
discrimination against children with disabilities by child care 
providers and requires providers to make reasonable 
accommodations to ensure their participation.
    IDEA has two main service programs for young children with 
disabilities (Part C Early Intervention Program for Infants and 
Toddlers with Disabilities and section 619 Pre-School Program). 
IDEA's Part C supports developmental services for infants and 
toddlers, up to age 3, and their families. More than 270,000 
children participated in Part C in 2004. Most of the children 
who received Part C supports in 2001 were served in their homes 
or in a child care setting.
    IDEA's Section 619 pre-school program provides special 
education and related services to preschool-aged children with 
disabilities. More than 679,000 children participated in the 
IDEA Section 619 preschool program in 2004, receiving services 
in public schools, child care, Head Start, or other settings. A 
child between the ages of 3 and 5 is eligible for section 619 
services if he or she has a disability and needs special 
education and related services.
    To further respond to the child care needs of families with 
children who have special needs, the committee has included 
language requiring States to demonstrate how they are 
addressing the child care needs of parents who have children 
who have special needs. Additionally, the committee has 
authorized States to use funds under the quality set-aside to 
offer training professional development, and educational 
opportunities for child care providers, and specifically 
providers who care for children with special needs. The 
committee recognizes the need of providers to be equipped to 
offer quality child care services to children with special 
needs, and believes additional opportunities for specialized 
training will assist in this effort.

                        TRIBAL CHILD CARE ISSUES

    Under current law, the Secretary determines child care 
licensing requirements for child care services in areas served 
by tribes or organizations, but only in consultation with 
Indian tribes or tribal organizations. The committee bill makes 
significant improvements with respect to tribal sovereignty and 
self-determination. The bill treats tribes like States by 
requiring tribes to verify that they have child care licensing 
requirements in effect, to provide descriptions of these 
requirements, and to detail how the requirements are 
effectively enforced. Additionally, the bill provides that 
health and safety requirements applicable to child care 
providers in areas served by Indian tribes or tribal 
organizations are established according to tribal law. Further, 
to assist Indian tribes and tribal organizations provide 
quality child care to Indian children, the committee bill 
increases the amount of funds reserved for Indian tribes from 1 
to 2 percent to 2 percent. Recognizing the importance of 
increasing child care capacity, the committee bill encourages 
small businesses to establish and operate child care programs, 
and provides grants to States, as well as Indian tribes and 
tribal organizations, to help establish these programs.

               GRANTS TO SMALL BUSINESSES FOR CHILD CARE

    The committee recognizes that small businesses play a 
critical role in providing child care options to millions of 
working parents. Unfortunately, small businesses generally do 
not have the resources required to start up and support a child 
care center. The committee bill includes a short-term, flexible 
grant program to encourage small businesses to work together or 
with other local agencies to provide child care services for 
employees. This grant program takes the necessary steps to 
ensuring small businesses and other local organizations, 
especially in our rural areas, are able to work together and 
find innovative approaches to provide child care for employees.
    Small businesses will be eligible for grants for start-up 
costs, training, scholarships, or other related activities. 
Priority will be given to small businesses who work with other 
small businesses, large businesses, local child care 
organizations, or other appropriate entities. Grantees will be 
eligible for grants up to $500,000, but they are required to 
match Federal funds to encourage self-sustaining facilities 
well into the future. Business must continue to meet State 
quality and health standards.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 16, 2005.
Hon. Mike Enzi,
Chairman, Committee on Health, Education, Labor, and Pensions, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 525, the Caring for 
Children Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sheila Dacey.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 525--Caring for Children Act of 2005

    Summary: S. 525, the Caring for Children Act of 2005, would 
amend and reauthorize the Child Care and Development Block 
Grant Act of 1990. The Child Care and Development Block Grant 
(CCDBG) program was authorized through 2002 by that act and has 
been authorized in appropriation acts since then; it is 
currently authorized through 2005 by the Consolidated 
Appropriation Act, 2005 (Public Law 108-447). The bill also 
would create a new demonstration grant program and increase 
set-asides for quality improvements and other activities.
    If enacted, the bill would authorize appropriations 
totaling $2.35 billion in 2006 and increasing amounts in 
subsequent years. Authorizations would total $13.55 billion 
over the 2006-2010 period. CBO estimates that appropriations of 
these amounts would result in additional outlays of $12.5 
billion over the 2006-2010 period. Enacting the bill would not 
affect direct spending or receipts.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs resulting from additional requirements of the bill 
would be incurred by states voluntarily as conditions or 
receiving the grant.
    Estimated cost to the Federal Government: The estimated 
budgetary impact for S. 525 is shown in the following table. 
The costs of this legislation fall within budget function 600 
(income security).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2005    2006    2007    2008    2009    2010
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law:
    Budget Authority............................................   2,083       0       0       0       0       0
    Estimated Outlays...........................................   2,094     614     113      21       0       0
Proposed Changes:
    Child Care and Development Block Grant Program:
        Authorization Level.....................................       0   2,300   2,500   2,700   2,900   3,100
        Estimated Outlays.......................................       0   1,633   2,327   2,609   2,830   3,030
    Small Business Child Care Grant Program:
        Authorization Level.....................................       0      50       0       0       0       0
        Estimated Outlays.......................................       0       3      20      15      10       2
    Total Proposed Changes:
        Authorization Level.....................................       0   2,350   2,500   2,700   2,900   3,100
        Estimated Outlays.......................................       0   1,636   2,347   2,624   2,840   3,032
Total Spending Under the Bill:
        Authorization Level \1\.................................   2,083   2,350   2,500   2,700   2,900   3,100
        Estimated Outlays.......................................   2,094   2,250   2,460   2,645   2,840   3,032
----------------------------------------------------------------------------------------------------------------
\1\ The 2005 level is the amount appropriated for that year.

    Basis of estimate: CBO assumes that S. 525 will be enacted 
during the current fiscal year, and that the authorized amounts 
will be appropriated for each fiscal year. The estimated 
outlays reflect historical rates of spending for the affected 
programs or similar programs.

Title I--Child Care and Development Block Grant Act of 1990

    Title I of the bill would amend and reauthorize the CCDBG 
program. The bill would authorize appropriations of $2.3 
billion in 2006, $2.5 billion in 2007, $2.7 billion in 2008, 
$2.9 billion in 2009, and $3.1 billion in 2010. Funding in 2005 
was $2.083 billion.
    The CCDBG program provides funding to states for child-care 
subsidies to low-income families, quality improvement, and 
other activities. It is one of the two federal funding programs 
for child-care subsidies within a program grouping often 
referred to as the Child Care and Development Fund. The other 
program is the Child Care Entitlement to States, a mandatory 
program that would not be affected by the bill.

Title II--Enhancing Security at Child Care Centers in Federal 
        Facilities

    Title II would direct certain federal officials to develop 
regulations for enhancing the security of and fostering 
effective disaster plans in child-care facilities operated by 
the federal government. CBO expects that the regulations would 
not have any significant effects on federal costs. Many of 
these facilities already have security procedures in place, 
while others are anticipated to implement such measures in the 
future even without the enactment of further legislation.

Title III--Removal of Barriers to Increasing the Supply of Quality 
        Child Care

    Title III would authorize appropriations totaling $50 
million over the 2006-2010 period to create a new program to 
award grants to states. The program would encourage small 
businesses to establish and operate child-care programs by 
providing grants to cover part of the costs of the programs. 
CBO estimates that outlays would be around $3 million in 2006 
and $50 million over the 2006-2010 period. The bill specifies 
that the program would be terminated September 30, 2010.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. It would increase the authorization of funds 
for the Child Care and Development Block Grant and increase 
some of the requirements for using those funds. The bill also 
would establish a new grant program for states to provide 
assistance to small business consortiums and other entities to 
increase the availability of child care. The requirements 
associated with these programs would be conditions of 
assistance resulting from the states' voluntary participation 
in the program and thus not intergovernmental mandates as 
defined by UMRA.
    Estimate prepared by: Federal costs: Sheila Dacey; impact 
on state, local, and tribal governments: Leo Lex; impact on the 
private sector: Molly Dahl.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

            VI. Application of Law to the Legislative Branch

    This bill does not amend any act that applies to the 
legislative branch.

                    VII. Regulatory Impact Statement

    Pursuant to the requirements of paragraph 11(b) of Rule 
XXVI of the Standing Rules of the Senate, the committee has 
determined that the bill will not have a significant regulatory 
impact.

                   VIII. Section-by-Section Analysis


Sec. 1. Short title

    This Act may be cited as the Caring for Children Act of 
2005.

Sec. 2. Table of contents

Sec. 101. Short title and goals

    This section modifies the goals of the Child Care and 
Development Block Grant (CCDBG) in Section 658A(b) to add three 
new goals: (1) to assist States in improving the quality of 
child care available to families; (2) to promote school 
preparedness by encouraging children, families, and caregivers 
to engage in developmentally appropriate and age-appropriate 
activities in child care settings that will (A) improve the 
children's social, emotional, and behavioral skills; (B) foster 
their early cognitive, pre-reading, and language development; 
and (3) to promote parental and family involvement in the 
education of young children in child care settings.

Sec. 102. Authorization of appropriations

    This section amends section 658B to authorize $2.3 billion 
for fiscal year 2006, $2.5 billion for fiscal year 2007, $2.7 
billion for fiscal year 2008, $2.9 billion for fiscal year 
2009, and $3.1 billion for fiscal year 2010.

Sec. 103. Lead agency

    This section amends Section 658D of CCDBG by allowing a 
State receiving funds under this act to designate an agency 
(which may be an appropriate collaborative agency), or 
establish a joint interagency office to serve as the lead 
agency for the State under this act.

Sec. 104. State plan

    Section 658E of CCDBG is amended to require a State 
receiving funds under this act to collect and disseminate, 
through resource and referral services and other means, to 
parents of eligible children, child care providers, and the 
general public, information regarding (I) the promotion of 
informed child care choices, including information about the 
quality and availability of services; (II) research and best 
practices concerning children's development, including early 
cognitive development; (III) the availability of assistance to 
obtain child care services; and (IV) other programs for which 
families may be eligible, including the food stamp program, the 
special supplemental nutrition program for women, infants, and 
children, the child and adult care food program, and the 
Medicaid and State children's health insurance programs. The 
State must also report to the Secretary the manner in which the 
consumer education information described was provided to 
parents and the number of parents to whom such consumer 
education information was provided. This section also requires 
the State to inform parents receiving assistance under TANF and 
low-income parents about eligibility for child care assistance.
    This section requires that a State has procedures and 
policies in place to ensure that working parents are not 
required to unduly disrupt their employment in order to comply 
with the State's requirements for eligibility redetermination, 
and requires that each child that receives assistance will 
receive such assistance for not less than 6 months before 
redetermination. This section also gives States the option to 
not terminate child care assistance based on a parent's loss of 
work or cessation of attendance at a job training or 
educational program without continuing the assistance for not 
less than 1 month.
    This section requires the State to describe how it will 
coordinate early child education activities assisted under this 
act with programs such as Head Start, Early Head Start, Early 
Reading First, Even Start, title I preschool, Section 619 and 
part C of IDEA, and other early childhood education programs. A 
State must also describe any training requirements in effect 
designed to enable providers under this act to promote the 
social, emotional, physical, and cognitive development of 
children. A State must describe how it is encouraging 
partnerships between State and other public agencies, and 
private entities, to leverage existing service delivery systems 
and to increase the supply and quality of services for children 
ages 0-13. A State must describe how it is addressing the child 
care needs of eligible parents, who have children with special 
needs, work nontraditional hours, or require child care 
services for infants and toddlers.
    This section allows the State to use funds to establish or 
support a system of local child care resource and referral 
organizations coordinated by a statewide private, nonprofit, 
community-based lead child care resource and referral 
organization to provide parents with information, and consumer 
education concerning the full range of child care options 
(including care provided during nontraditional hours and 
through emergency child care centers). This network may also 
collect and analyze data on the supply of and demand for child 
care in political subdivisions within the State; submit reports 
to the State containing the data and analysis; and work to 
establish partnerships with public agencies and private 
entities to increase the supply and quality of child care 
services.
    From amounts provided to a State for a fiscal year, the 
State shall reserve the minimum amount required for the quality 
set aside, administration, and other set asides, and from the 
remainder, use not less than 70 percent to fund direct services 
(as defined by the State).
    This section requires the State to develop and conduct a 
statistically valid and reliable survey of the market rates for 
child care services in the State (reflecting variations in the 
cost of child care services by geographic area, type of 
provider, and age of child) within the 2 years preceding the 
date of the submission of the application containing the State 
plan. The State should also detail the results of the market 
rates survey; describe how the State will provide for timely 
payment for child care services, and set payment rates for 
child care services in accordance with the results of the 
market rates survey without reducing the number of families in 
the State receiving assistance (as of the date of introduction 
of the Caring for Children Act of 2005). The State shall make 
the results of the survey available to the public no later than 
30 days after the completion of the survey. The State plan 
shall include a certification that the payment rates are 
sufficient to ensure equal access for eligible children to 
child care services comparable to child care services in the 
State or sub-state area.
    This section includes a rule of construction stating that 
nothing shall prevent a State from differentiating the payment 
rates to providers on the basis of geographic location, the age 
or particular needs of children, and whether the providers 
provide child care during weekend and other nontraditional 
hours.

Sec. 105. Activities to improve the quality of child care

    Section 658G of CCDBG is amended to require each State 
receiving funds under this act to reserve not less than 6 
percent of the funds provided directly, or through grants or 
contracts with resource and referral organizations or other 
appropriate entities that are designed to improve the quality 
of child care services. This section requires that funds be 
used only:
          (A) to develop and implement voluntary guidelines on 
        pre-reading and language skills, prenumeracy and 
        mathematics skills, and activities that are aligned 
        with State standards for kindergarten through grade 12 
        or the State's general goals for school preparedness;
          (B) support activities and provide technical 
        assistance in Federal, State, and local child care 
        settings to enhance early learning for young children, 
        to promote literacy, and to foster school preparedness;
          (C) offer training, professional development, and 
        educational opportunities for child care providers that 
        relate to the use of developmentally appropriate and 
        age-appropriate curricula, and early childhood teaching 
        strategies, that are scientifically based and aligned 
        with the social, emotional, physical, and cognitive 
        development of children, including: (i) developing and 
        operating distance learning child care training 
        infrastructures; (ii) developing model technology-based 
        training courses; (iii) offering training for 
        caregivers in informal child care settings; and (iv) 
        offering training for child care providers who care for 
        infants and toddlers and children with special needs;
          (D) engage in programs designed to increase the 
        retention and improve the competencies of child care 
        providers, including wage incentive programs and 
        initiatives that establish tiered payment rates for 
        providers that meet or exceed child care services 
        guidelines, as defined by the State;
          (E) evaluate and assess the quality and effectiveness 
        of child care programs and services offered in the 
        State to young children on improving overall school 
        preparedness; and
          (F) carry out other activities determined by the 
        State to improve the quality of child care services for 
        which measurement of outcomes relating to improved 
        child safety, child well-being, or school preparedness 
        is possible.
    This section also requires that beginning with fiscal year 
2006, the State shall submit an annual certification to the 
Secretary that the State was in compliance with the quality 
activities described above and describes how the State used 
quality during that preceding fiscal year. Beginning with 
fiscal year 2006, the State is required to submit an annual 
report to the Secretary that outlines the strategy the State 
will use to address the quality of child care in the State, 
including a description of quantifiable, objective measures 
that the State will use to evaluate the State's progress in 
improving the quality of the child care services and a list of 
State-developed child care services quality targets quantified 
for such measures. This section requires that beginning with 
fiscal year 2007, the State shall submit a report on its 
progress in achieving targets for the preceding fiscal year. A 
State failing to make progress in quality improvements shall 
submit an improvement plan to the Secretary, and that State 
shall comply with the improvement plan within 1 year.
    Nothing in this act shall be construed to require that the 
State apply measures for evaluating quality of child care 
services to specific types of child care providers.

Sec. 106. Optional priority use of additional funds

    This section amends Section 658G of CCDBG to require a 
State receiving funds under this act to consider using a 
portion of any funds exceeding the amount of funds the State 
received to carry out this act for fiscal year 2005 to support 
payment rate increases; to support the establishment of tiered 
payment rates for providers; and to support payment rate 
increases for 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)).
    This section also states that nothing in section 106 shall 
be construed to require a State to take an action that the 
State determines would result in a reduction of child care 
services to families of eligible children.
    This section also defines ``payment rate'' to mean the rate 
of State payment or reimbursement to providers for subsidized 
child care.

Sec. 107. Reporting requirements

    This section amends section 658K to require a State 
receiving funds under this act to collect, with respect to a 
family unit receiving assistance under this act, information 
concerning family income; county of residence; the gender, 
race, and age of children receiving such assistance; whether 
the head of the family unit is a single parent; the sources of 
family income (including employment, including self-employment 
and assistance under a State program funded under part A of 
Title IV of the Social Security Act and a State program for 
which States' spending is counted toward the maintenance of 
effort requirement under Section 409 (a)(7) of the Social 
Security Act); the type, amount and cost of child care; 
household size; whether the parent involved reports that the 
child has an individualized education plan under IDEA and the 
reason for any termination of benefits under this act 
(including the child's age exceeding the allowable limit; the 
family income exceeding the State eligibility limit; the State 
recertification or administrative requirements not being met; 
parent work, training, or education status no longer meeting 
State requirements; a non income related change in status).
    A State shall, on a quarterly basis, submit to the 
Secretary the information required to be collected and the 
number of children and families receiving assistance. 
Information on the number of families receiving the assistance 
shall also be posted on the website of the State. In the fourth 
quarterly report of each year, a State shall also submit to the 
Secretary information on the annual number and type of child 
care providers that received funding under this act and the 
annual number of payments made by the State through vouchers, 
under contracts, or by payment to parents reported by type of 
child care provider.
    A State may comply with the requirement to collect the 
information through the use of disaggregated case record 
information on a sample of families selected through the use of 
scientifically acceptable sampling methods approved by the 
Secretary. The Secretary shall provide the States with such 
case sampling plans and data collection procedures as the 
Secretary determines necessary to produce statistically valid 
samples of the information. The Secretary may develop and 
implement procedures for verifying the quality of data 
submitted by the States.
    This section requires States to comply with the changes in 
data collection and reporting requirement within 2 years from 
the date of enactment of this Act. The Secretary of HHS may 
grant a waiver to States with plans to procure data systems.

Sec. 108. National activities

    This section amends section 658L to require the Secretary 
to no later than April 30, 2006, and annually thereafter, 
prepare and submit to the Committee on Education and the 
Workforce of the House of Representatives and the Committee on 
Health, Education, Labor, and Pensions of the Senate, and, not 
later than 30 days after the date of such submission, post on 
the HHS website, a report containing a summary and analysis of 
the data and information provided to the Secretary in the State 
reports submitted under sections 658E, 658G(c), and 658K; 
aggregated statistics on and an analysis of the supply of, 
demand for, and quality of child care, early education, and 
non-school hour programs; an assessment and, where appropriate, 
recommendations for Congress concerning efforts that should be 
undertaken to improve the access of the public to quality and 
affordable child care in the United States; and a progress 
report describing the progress of the States in streamlining 
data reporting, the Secretary's plans and activities to provide 
technical assistance to States, and an explanation of any 
barriers to getting data in an accurate and timely manner.
    This section also allows the Secretary to make arrangements 
with resource and referral organizations, to utilize the child 
care data system of the resource and referral organizations at 
the national, State, and local levels, to collect the 
information required by paragraph (1)(B).
    This section also directs the Secretary to provide 
technical assistance to States on developing and conducting the 
State market rates survey.
    Under this section, the Secretary is instructed to award 
grants to States, to improve the quality of and access to child 
care for infants and toddlers, subject to the availability of 
appropriations for this purpose. The Secretary shall also award 
a grant or contract, or enter into a cooperative agreement for 
the operation of a national toll-free hotline to assist 
families in accessing local information on child care options 
and providing consumer education materials, subject to the 
availability of appropriations for this purpose.

Sec. 109. Grants and hotline

    This section amends Section 658O(a) of CCDBG to require the 
Secretary to reserve an amount not to exceed $100 million for 
each fiscal year to carry out activities designed to improve 
the quality of and access to child care for infants and 
toddlers. The section also requires the Secretary to reserve an 
amount not to exceed $1 million to carry out operation of a 
national toll-free hotline to assist families in accessing 
local information on child care options and providing consumer 
education materials.

Sec. 110. Definitions

    This section amends Section 658P of CCDBG by allowing 
States to set the income eligibility level for families, with 
priority given by need as defined by the State. The term 
``child with special needs'' was defined in Section 602 of IDEA 
(20 U.S.C. 1401); and a child who is eligible for early 
intervention services under part C of IDEA (20 U.S.C. 1431 et 
seq). Section 658P is also amended by redefining ``Native 
Hawaiian organization'' as it is defined in Section 7207 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 
7517).

Sec. 111. Rules of construction

    Section 658P is amended to include a rule of construction 
stating that nothing in this act shall be construed to require 
a State to impose State child care licensing requirements on 
any type of early childhood provider, including any such 
provider who is exempt from State child care licensing 
requirements on the date of enactment of the Caring for 
Children Act of 2005.

     Title II--Enhancing Security at Child Care Centers in Federal 
                               Facilities


Sec. 201. Definitions

    This section defines the term ``Administrator'' as the 
Administrator of General Services. The term ``corresponding 
child care facility'', used with respect to the Chief 
Administrative Officer of the U.S. House of Representatives, 
the Librarian of Congress, or the head of a designated entity 
in the Senate, means a child care facility operated by, or 
under a contract or licensing agreement with, an office of the 
U.S. House of Representatives, the Library of Congress, or an 
office of the Senate, respectively. The term ``entity 
sponsoring,'' used with respect to a child care facility, means 
a Federal agency that operates, or an entity that enters into a 
contract or licensing agreement with a Federal agency to 
operate, a child care facility primarily for the use of Federal 
employees.
    This section defines the term ``Executive agency'' as 
defined in Section 105 of title 5, United States Code, except 
that the term--(A) does not include the Department of Defense 
and the Coast Guard; and (B) includes the General Services 
Administration, with respect to the administration of a 
facility described in paragraph (5)(B). The term ``executive 
facility''--(A) means a facility that is owned or leased by an 
Executive agency; and (B) includes a facility that is owned or 
leased by the General Services Administration on behalf of a 
judicial office. The term ``Federal agency'' means an Executive 
agency, a legislative office, or a judicial office.
    This section also defines the term ``judicial facility'' 
means a facility that is owned or leased by a judicial office 
(other than a facility that is also a facility described in 
paragraph (5)(B)). The term ``judicial office'' means an entity 
of the judicial branch of the Federal Government.
    Lastly, this section defines the term ``legislative 
facility'' to mean a facility that is owned or leased by a 
legislative office. The term ``legislative office'' means an 
entity of the legislative branch of the Federal Government.

Sec. 202. Enhancing Security

    This section (1) directs the Administrator of General 
Services to issue regulations for child care facilities, and 
entities sponsoring child care facilities, in executive 
facilities; (2) directs the Chief Administrative Officer of the 
U.S. House of Representatives, the Librarian of Congress, and 
the head of a designated entity in the U.S. Senate to issue the 
regulations for corresponding child care facilities, and 
entities sponsoring the corresponding child care facilities, in 
legislative facilities; and (3) the Director of the 
Administrative Office of the U.S. Courts to issue the 
regulations described in subsection for child care facilities, 
and entities sponsoring child care facilities, in judicial 
facilities.
    This section directs the officers described above to issue 
regulations that concern matters relating to an occupant 
emergency plan and evacuations, such as providing for building 
security committee membership for each director of a child care 
facility; establishing a separate section in an occupant 
emergency plan for a facility; promoting familiarity with 
procedures and evacuation routes for different types of 
emergencies; strengthening onsite relationships between 
security personnel and the personnel of such a facility; 
providing specific, clear, and concise evacuation instructions 
for a facility; providing for good evacuation equipment, 
especially cribs; and promoting the ability to evacuate without 
outside assistance; and
    This section also directs the above officers to issue 
regulations that concern matters relating to relocation sites, 
such as promoting an informed parent body that is knowledgeable 
about evacuation procedures and relocation sites; providing 
regularly updated parent contact information (regarding matters 
such as names, locations, electronic mail addresses, and cell 
phone and other telephone numbers); establishing remote 
telephone contact for parents, to and from areas that are not 
less than 10 miles from such a facility; and providing for an 
alternate site (in addition to regular sites) in the event of a 
catastrophe, which site may include (i) a site that would be an 
unreasonable distance from the facility under normal 
circumstances; and (ii) a facility with 24-hour operations, 
such as a hotel or law school library.

  Title III--Removal of Barriers to Increasing the Supply of Quality 
                               Child Care


Sec. 301. Small Business Child Care Grant Program

    This section requires the Secretary of HHS to establish a 
program to award grants to States, on a competitive basis, to 
assist States in providing funds to encourage the establishment 
and operation of employer-operated child care programs. The 
Secretary shall determine the amount of a grant to a State 
under this section based on the population of the State as 
compared to the population of all States receiving grants under 
this section.
    This section allows a State to use awarded funds to provide 
assistance to a small business located in the State to enable 
the small businesses to establish and operate child care 
programs. Such assistance may include technical assistance in 
the establishment of a child care program; assistance for the 
startup costs related to a child care program; assistance for 
the training of child care providers; scholarships for low-
income wage earners; the provision of services to care for sick 
children or to provide care to school-aged children; the 
entering into of contracts with local resource and referral or 
local health departments; assistance for care for children with 
disabilities; or assistance for any other activity determined 
appropriate by the State.
    A small business is required by this section to apply to 
the State for grants. A State is required to give priority to 
an applicant that desires to form a consortium to provide child 
care in a geographic area within the State where such care is 
not generally available or accessible. A consortium shall be 
made up of two or more entities that shall include small 
businesses and that may include large businesses, nonprofit 
agencies or organizations, local governments, or other 
appropriate entities. A State may not provide in excess of 
$500,000 in assistance from such funds to any single applicant.
    To be eligible to receive a grant under this section, a 
State shall provide assurances to the Secretary that, with 
respect to the costs to be incurred by an entity receiving 
assistance from the State to carry out activities under this 
section the entity will make available non-Federal 
contributions to such costs in an amount equal to: (A) for the 
first fiscal year in which the entity receives such assistance, 
not less than 50 percent of such costs; (B) for the second 
fiscal year in which the entity receives such assistance, not 
less than 662.3 percent of such costs; and (C) for the third 
fiscal year in which the entity receives such assistance, not 
less than 75 percent of such costs.
    To be eligible to receive assistance under a grant awarded 
under this section, a child care provider shall comply with all 
applicable State and local licensing and regulatory 
requirements and all applicable health and safety standards in 
effect in the State.
    A State may not retain more than three percent of awarded 
funds for State administration and other State-level 
activities. The Secretary requires that the State has 
responsibility for administering the awarded grant under this 
section and for monitoring entities that receive assistance 
under such grant. Each State shall require each entity 
receiving assistance under the grant awarded to conduct an 
annual audit with respect to the activities of the entity. Such 
audits shall be submitted to the State. If the State 
determines, through an audit or otherwise, that an entity has 
misused the assistance, the State shall notify the Secretary of 
the misuse. The Secretary, upon such a notification, may seek 
from such an entity the repayment of an amount equal to the 
amount of any such misused assistance plus interest.
    This section requires the Secretary to by regulation 
provide for an appeals process with respect to repayments under 
this paragraph.
    This section requires the Secretary to conduct a study not 
later than 2 years after the date on which the Secretary first 
awards grants under this section to determine the capacity of 
the grantees to meet the child care needs of communities within 
States; the kinds of consortia that are being formed with 
respect to child care at the local level to carry out programs 
funded under this section; and who is using the programs funded 
under this section and the income levels of such individuals.
    This section requires the Secretary to prepare and submit 
to the appropriate committees of Congress not later than 28 
months after the date on which the Secretary first awards 
grants under this section, a report on the results of the study 
conducted in accordance with subparagraph (A).
    This section requires that not later than 4 years after the 
date on which the Secretary first awards grants under this 
section, the Secretary shall conduct a study to determine the 
number of child care facilities that are funded through covered 
entities that received assistance through a grant awarded under 
this section and that remain in operation, and the extent to 
which such facilities are meeting the child care needs of the 
individuals served by such facilities.
    This section requires that not later than 52 months after 
the date on which the Secretary first awards grants under this 
section, the Secretary shall prepare and submit to the 
appropriate committees of Congress a report on the results of 
the study conducted in accordance with subparagraph (A).
    As defined by this section, the term ``covered entity'' 
means a small business or a consortium formed in accordance 
with subsection (d)(3). The term ``small business'' as defined 
by this section is an employer who employed an average of at 
least 2 but not more than 50 employees on business days during 
the preceding calendar year.
    This section authorizes $50 million for the period of 
fiscal years 2006 through 2010 to carry out the grant program. 
With respect to the total amount appropriated for such period 
in accordance with this subsection, not more than $2.5 million 
of that amount may be used for expenditures related to 
conducting evaluations required under, and the administration 
of, this section. The grant program established by this section 
shall terminate on September 30, 2010.

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990

           *       *       *       *       *       *       *


          Subchapter C--Child Care and Development Block Grant


[SEC. 658A. SHORT TITLE AND GOALS.]

SEC. 658A. SHORT TITLE AND GOALS.

    (a) Short Title.-- * * *
    (b) Goals.--The goals of this subchapter are--
          (1) * * *

           *       *       *       *       *       *       *

          (3) to [encourage] assist States to provide consumer 
        education information to help parents make informed 
        choices about child care;
          (4) to assist States to provide child care to 
        [parents trying to achieve independence from public 
        assistance; and] low-income working parents;
          (5) to assist States in improving the quality of 
        child care available to families;
          (6) to promote school preparedness by encouraging 
        children, families, and caregivers to engage in 
        developmentally appropriate and age-appropriate 
        activities in child care settings that will--
                  (A) improve the children's social, emotional, 
                and behavioral skills; and
                  (B) foster the children's early cognitive, 
                pre-reading, and language development, and 
                prenumeracy and mathematics skills;
          (7) to promote parental and family involvement in the 
        education of young children in child care settings; and
          [(5)] (8) to assist States in implementing the 
        health, safety, licensing, and registration standards 
        established in State regulations.

           *       *       *       *       *       *       *


SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this 
[subchapter $1,000,000,000 for each of the fiscal years 1996 
through 2002.] subchapter $2,300,000,000 for fiscal year 2006, 
$2,500,000,000 for fiscal year 2007, $2,700,000,000 for fiscal 
year 2008, $2,900,000,000 for fiscal year 2009, and 
$3,100,000,000 for fiscal year 2010.

           *       *       *       *       *       *       *


SEC. 658D. LEAD AGENCY.

    (a) Designation.--The chief executive officer of a State 
desiring to receive a grant under this subchapter shall 
[designate, in an application submitted to the Secretary under 
section 658E, an appropriate State agency that complies with 
the requirements of subsection (b) to act as the lead agency.] 
designate an agency (which may be an appropriate collaborative 
agency), or establish a joint interagency office, that complies 
with the requirements of subsection (b) to serve as the lead 
agency for the State under this subchapter.

           *       *       *       *       *       *       *


SEC. 658E. APPLICATION AND PLAN.

    (a) Application.-- * * *

           *       *       *       *       *       *       *

    (c) Requirements of a Plan.--
          (1) Lead agency.--The State plan shall identify the 
        lead agency [designated] designated or established 
        under section 658D.
          (2) Policies and procedures.--The State plan shall:
                  (A) Parental choice of providers.--Provide 
                assurances that--
                          (i) the parent or parents of each 
                        eligible child within the State who 
                        receives or is offered child care 
                        services for which financial assistance 
                        is provided under this subchapter are 
                        given the option either--
                                  (I) to enroll such child with 
                                a child care provider that has 
                                a grant or contract for the 
                                provision of such services; or
                                  (II) to receive a child care 
                                certificate as defined in 
                                [section 658P(2)] section 
                                658T(2);

           *       *       *       *       *       *       *

                  [(D) Consumer education information.--Certify 
                that the State will collect and disseminate to 
                parents of eligible children and the general 
                public, consumer education information that 
                will promote informed child care choices.]
                  (D) Consumer and child care provider 
                education information.--Certify that the State 
                will--
                          (i) collect and disseminate, through 
                        resource and referral services and 
                        other means as determined by the State, 
                        to parents of eligible children, child 
                        care providers, and the general public, 
                        information regarding--
                                  (I) the promotion of informed 
                                child care choices, including 
                                information about the quality 
                                and availability of child care 
                                services;
                                  (II) research and best 
                                practices concerning children's 
                                development, including early 
                                cognitive development;
                                  (III) the availability of 
                                assistance to obtain child care 
                                services; and
                                  (IV) other programs for which 
                                families that receive child 
                                care services for which 
                                financial assistance is 
                                provided under this subchapter 
                                may be eligible, including the 
                                food stamp program established 
                                under the Food Stamp Act of 
                                1977 (7 U.S.C. 2011 et seq.), 
                                the special supplemental 
                                nutrition program for women, 
                                infants, and children 
                                established by section 17 of 
                                the Child Nutrition Act of 1966 
                                (42 U.S.C. 1786), the child and 
                                adult care food program 
                                established under section 17 of 
                                the Richard B. Russell National 
                                School Lunch Act (42 U.S.C. 
                                1766), and the medicaid and 
                                State children's health 
                                insurance programs under titles 
                                XIX and XXI of the Social 
                                Security Act (42 U.S.C. 1396 et 
                                seq. and 1397aa et seq.); and
                          (ii) report to the Secretary the 
                        manner in which the consumer education 
                        information described in clause (i) was 
                        provided to parents and the number of 
                        parents to whom such consumer education 
                        information was provided, during the 
                        period of the previous State plan.
                  [(E) Compliance with state licensing 
                requirements.--
                          [(i) In general.--Certify that the 
                        State has in effect licensing 
                        requirements applicable to child care 
                        services provided within the State, and 
                        provide a detailed description of such 
                        requirements and of how such 
                        requirements are effectively enforced. 
                        Nothing in the preceding sentence shall 
                        be construed to require that licensing 
                        requirements be applied to specific 
                        types of providers of child care 
                        services.
                          [(ii) Indian tribes and tribal 
                        organizations.--In lieu of any 
                        licensing nad regulatory requirements 
                        applicable under State and local law, 
                        the Secretary, in consultation with 
                        Indian tribes and tribal organizations, 
                        shall develop minimum child care 
                        standards (that appropriately reflect 
                        tribal needs and available resources) 
                        that shall be applicable to Indian 
                        tribes and tribal organizations 
                        receiving assistance under this 
                        subchapter.]
                  (E) Compliance with state and tribal 
                licensing requirements.--
                          (i) In general.--Certify that the 
                        State (or the Indian tribe or tribal 
                        organization) involved has in effect 
                        licensing requirements applicable to 
                        child care services provided within the 
                        State (or area served by the tribe or 
                        organization), and provide a detailed 
                        description of such requirements and of 
                        how such requirements are effectively 
                        enforced.
                          (ii) Construction.--Nothing in clause 
                        (i) shall be construed to require that 
                        licensing requirements be applied to 
                        specific types of providers of child 
                        care services.
                  (F) Establishment of health and safety 
                requirements.--Certify that there are in effect 
                [within the State, under State or local law,] 
                within the State (or area served by the Indian 
                tribe or tribal organization), under State or 
                local law (or tribal law), requirements 
                designed to protect the health and safety of 
                children that are applicable to child care 
                providers that provide services for which 
                assistance is made available under this 
                subchapter. Such requirements shall include--
                          (i) * * *

           *       *       *       *       *       *       *

Nothing in this subparagraph shall be construed to require the 
establishment of additional health and safety requirements for 
child care providers that are subject to health and safety 
requirements in the categories described in this subparagraph 
on the date of enactment of this subchapter under [State or 
local law] State or local law (or tribal law).

           *       *       *       *       *       *       *

                  (H) Meeting the needs of certain 
                populations.-- * * *
                  (I) Protection for working parents.--
                          (i) Redetermination process.--
                        Describe the procedures and policies 
                        that are in place to ensure that 
                        working parents (especially parents in 
                        families receiving assistance under a 
                        State program funded under part A of 
                        title IV of the Social Security Act (42 
                        U.S.C. 601 et seq.)) are not required 
                        to unduly disrupt their employment in 
                        order to comply with the State's 
                        requirements for redetermination of 
                        eligibility for assistance under this 
                        subchapter.
                          (ii) Minimum period.--Demonstrate 
                        that each child that receives 
                        assistance under this subchapter in the 
                        State will receive such assistance for 
                        not less than 6 months before the State 
                        redetermines the eligibility of the 
                        child under this subchapter, except as 
                        provided in clause (iii).
                          (iii) Period before termination.--At 
                        the option of the State, demonstrate 
                        that the State will not terminate 
                        assistance under this subchapter based 
                        on a parent's loss of work or cessation 
                        of attendance at a job training or 
                        educational program for which the 
                        family was receiving the assistance, 
                        without continuing the assistance for a 
                        reasonable period of time, of not less 
                        than 1 month, after such loss or 
                        cessation in order for the parent to 
                        engage in a job search and resume work, 
                        or resume attendance of a job training 
                        or educational program, as soon as 
                        possible.
                  (J) Coordination with other programs.--
                Describe how the State, in order to expand 
                accessibility and continuity of quality early 
                care and early education, will coordinate the 
                early childhood education activities assisted 
                under this subchapter with--
                          (i) programs carried out under the 
                        Head Start Act (42 U.S.C. 9831 et 
                        seq.), including the Early Head Start 
                        programs carried out under section 645A 
                        of that Act (42 U.S.C. 9840a);
                          (ii)(I) Early Reading First and Even 
                        Start programs carried out under 
                        subparts 2 and 3 of part B of title I 
                        of the Elementary and Secondary 
                        Education Act of 1965 (20 U.S.C. 6371 
                        et seq., 6381 et seq.);
                          (II) other preschool programs carried 
                        out under title I of that Act (20 
                        U.S.C. 6301 et seq.); and
                          (III) the Ready-to-Learn Television 
                        program carried out under subpart 3 of 
                        part D of title II of that Act (20 
                        U.S.C. 6775 et seq.);
                          (iii) programs carried out under 
                        section 619 and part C of the 
                        Individuals with Disabilities Education 
                        Act (20 U.S.C. 1419 and 1431 et seq.);
                          (iv) State prekindergarten programs; 
                        and
                          (v) other early childhood education 
                        programs.
                  (K) Training in early learning and childhood 
                development.--Describe any training 
                requirements that are in effect within the 
                State that are designed to enable child care 
                providers to promote the social, emotional, 
                physical, and cognitive development of children 
                and that are applicable to child care providers 
                that provide services for which assistance is 
                made available under this subchapter in the 
                State.
                  (L) Public-private partnerships.--Demonstrate 
                how the State is encouraging partnerships among 
                State agencies, other public agaencies, and 
                private entities, to leverage existing delivery 
                systems (as of the date of submission of the 
                State plan) for early childhood education and 
                to increase the supply and quality of child 
                care services for children who are less than 13 
                years of age.
                  (M) Access to care for certain populations.--
                Demonstrate how the State is addressing the 
                child care needs of parents eligible for child 
                care services for which assistance is provided 
                under this subchapter, who have children with 
                special needs, work nontraditional hours, or 
                require child care services for infants and 
                toddlers.
                  (N) Coordination with title iv of the social 
                security act.--Describe how the State will 
                inform parents receiving assistance under a 
                State program funded under part A of title IV 
                of the Social Security Act (42 U.S.C. 601 et 
                seq.) and low-income parents about eligibility 
                for assistance under this subchapter.
          (3) Use of block grant funds.--
                  (A) General requirement.--The State plan 
                shall provide that the State will use the 
                amounts provided to the State, for each fiscal 
                year under this subchapter [as required under] 
                in accordance with subparagraphs (B) through 
                [(D)] (E).
                  (B) Child care services and related 
                activities.--[The State]
                          (i) In general.--The State shall use 
                        amounts provided to the State for each 
                        fiscal year under this subchapter for 
                        child care services on a sliding fee 
                        scale basis, activities that improve 
                        the quality or availability of such 
                        services, and any other activity that 
                        the State deems [appropriate to realize 
                        any of the goals specified in 
                        paragraphs (2) through (5) of section 
                        658A(b)] appropriate (which may include 
                        an activity described in clause (ii)) 
                        to realize any of the goals specified 
                        in paragraphs (2) through (8) of 
                        section 658A(b), with priority being 
                        given for services provided to children 
                        of families with very low family 
                        incomes (taking into consideration 
                        family size) and to children with 
                        special needs.
                          (ii) Child care resource and referral 
                        system.--A State may use amounts 
                        described in clause (i) to establish or 
                        support a system of local child care 
                        resource and referral organizations 
                        coordinated, to the extent determined 
                        appropriate by the State, by a 
                        statewide private, non-profit, 
                        community-based lead child care 
                        resource and referral organization. The 
                        local child care resource and referral 
                        organizations shall--
                                  (I) provide parents in the 
                                State with information, and 
                                consumer education, concerning 
                                the full range of child care 
                                options, including child care 
                                provided during nontraditional 
                                hours and through emergency 
                                child care centers, in their 
                                communities;
                                  (II) collect and analyze data 
                                on the supply of and demand for 
                                child care in political 
                                subdivisions within the State;
                                  (III) submit reports to the 
                                State containing data and 
                                analysis described in subclause 
                                (II); and
                                  (IV) work to establish 
                                partnerships with public 
                                agencies and private entities 
                                to increase the supply and 
                                quality of child care services.

           *       *       *       *       *       *       *

                  (D) Assistance for certain families.-- * * *
                  (E) Direct services.--From amounts provided 
                to a State for a fiscal year to carry out this 
                subchapter, the State shall--
                          (i) reserve the minimum amount 
                        required to be reserved under section 
                        658G, and the funds for costs described 
                        in subparagraph (C); and
                          (ii) from the remainder, use not less 
                        than 70 percent to fund direct services 
                        (as defined by the State).
          (4) Payment rates.--
                  (A) In general.--[The State plan shall 
                certify that payment rates for the provision of 
                child care services for which assistance is 
                provided under this subchapter are sufficient 
                to ensure equal access for eligible children to 
                comparable child care services in the State or 
                substate area that are provided to children 
                whose parents are not eligible to receive 
                assistance under this subchapter or for child 
                care assistance under any other Federal or 
                State programs and shall provide a summary of 
                the facts relied on by the State to determine 
                that such rates are sufficient to ensure such 
                access.]
                          (i) Survey.--The State plan shall--
                                  (I) demonstrate that the 
                                State has, after consulting 
                                with local area child care 
                                program administrators, 
                                developed and conducted a 
                                statistically valid and 
                                reliable survey of the market 
                                rates for child care services 
                                in the State (that reflects 
                                variations in the cost of child 
                                care services by geographic 
                                area, type of provider, and age 
                                of child) within the 2 years 
                                preceding the date of the 
                                submission of the application 
                                containing the State plan;
                                  (II) detail the results of 
                                the State market rates survey 
                                conducted pursuant to subclause 
                                (I);
                                  (III) describe how the State 
                                will provide for timely payment 
                                for child care services, and 
                                set payment rates for child 
                                care services, for which 
                                assistance is provided under 
                                this subchapter in accordance 
                                with the results of the market 
                                rates survey conducted pursuant 
                                to subclause (I) without 
                                reducing the number of families 
                                in the State receiving such 
                                assistance under this 
                                subchapter, relative to the 
                                number of such families on the 
                                date of introduction of the 
                                Caring for Children Act of 
                                2005; and
                                  (IV) describe how the State 
                                will, not later than 30 days 
                                after the completion of the 
                                survey described in subclause 
                                (I), make the results of the 
                                survey widely available through 
                                public means, including posting 
                                the results on the Internet.
                          (ii) Equal access.--The State plan 
                        shall include a certification that the 
                        payment rates are sufficient to ensure 
                        equal access for eligible children to 
                        child care services comparable to child 
                        care services in the State or substate 
                        area that are provided to children 
                        whose parents are not eligible to 
                        receive child care assistance under any 
                        Federal or State program.
                  (B) Construction.--[Nothing] (i) No private 
                right of action._Nothing in this paragraph 
                shall be construed to create a private right of 
                action.
                  (ii) No prohibition of certain different 
                rates.--Nothing in this subchapter shall be 
                construed to prevent a State from 
                differentiating the payment rates described in 
                subparagraph (A) on the basis of such factors 
                as--
                          (I) geographic location of child care 
                        providers (such as location in an urban 
                        or rural area);
                          (II) the age or particular needs of 
                        children (such as children with special 
                        needs and children served by child 
                        protective services);
                          (III) whether the providers provide 
                        child care during weekend and other 
                        nontraditional hours; or
                          (IV) the State's determination that 
                        such differentiated payment rates are 
                        needed to enable a parent to choose 
                        child care that the parent believes to 
                        be of high quality.

           *       *       *       *       *       *       *


[SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    [A State that receives funds to carry out this subchapter 
for a fiscal year, shall use not less than 4 percent of the 
amount of such funds for activities that are designed to 
provide comprehensive consumer education to parents and the 
public, activities that increase parental choice, and 
activities designed to improve the quality and availability of 
child care (such as resource and referral services).]

SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    (a) In General.--
          (1) Reservation.--Each State that receives funds to 
        carry out this subchapter for a fiscal year shall 
        reserve and use not less than 6 percent of the funds 
        for activities provided directly, or through grants or 
        contracts with resource and referral organizations or 
        other appropriate entities, that are designed to 
        improve the quality of child care services.
          (2) Activities.--The funds reserved under paragraph 
        (1) may only be used to--
                  (A) develop and implement voluntary 
                guidelines on pre-reading and language skills 
                and activities, and prenumeracy and mathematics 
                skills and activities, for child care programs 
                in the State, that are aligned with State 
                standards for kindergarten through grade 12 or 
                the State's general goals for school 
                preparedness;
                  (B) support activities and provide technical 
                assistance in Federal, State, and local child 
                care settings to enhance early learning for 
                preschool and school-aged children, to promote 
                literacy, to foster school preparedness, and to 
                support later school success;
                  (C) offer training, professional development, 
                and educational opportunities for child care 
                providers that relate to the use of 
                developmentally appropriate and age-appropriate 
                curricula, and early childhood teaching 
                strategies, that are scientifically based and 
                aligned with the social, emotional, physical, 
                and cognitive development of children, 
                including--
                          (i) developing and operating distance 
                        learning child care training 
                        infrastructures;
                          (ii) developing model technology-
                        based training courses;
                          (iii) offering training for 
                        caregivers in informal child care 
                        settings; and
                          (iv) offering training for child care 
                        providers who care for infants and 
                        toddlers and children with special 
                        needs;
                  (D) engage in programs designed to increase 
                the retention and improve the competencies of 
                child care providers, including wage incentive 
                programs and initiatives that establish tiered 
                payment rates for providers that meet or exceed 
                child care services guidelines, as defined by 
                the State;
                  (E) evaluate and assess the quality and 
                effectiveness of child care programs and 
                services offered in the State to young children 
                on improving overall school preparedness; and
                  (F) carry out other activities determined by 
                the State to improve the quality of child care 
                services provided in the State and for which 
                measurement of outcomes relating to improved 
                child safety, child well-being, or school 
                preparedness is possible.
    (b) Certification.--Beginning with fiscal year 2006, the 
State shall annually submit to the Secretary a certification in 
which the State certifies that the State was in compliance with 
subsection (a) during the preceding fiscal year and describes 
how the State used funds made available to carry out this 
subchapter to comply with subsection (a) during that preceding 
fiscal year.
    (c) Strategy.--The State shall annually submit to the 
Secretary--
          (1) beginning with fiscal year 2006, an outline of 
        the strategy the State will implement during that 
        fiscal year to address the quality of child care 
        services for which financial assistance is made 
        available under this subchapter, including--
                  (A) a statement specifying how the State will 
                provide for the activities carried out under 
                subsection (a);
                  (B) a description of quantifiable, objective 
                measures that the State will use to evaluate 
                the State's progress in improving the quality 
                of the child care services (including measures 
                regarding the impact, if any, of State efforts 
                to improve the quality by increasing payment 
                rates, as defined in section 658H(c)), 
                evaluating separately the impact of the 
                activities listed in each of the subparagraphs 
                of subsection (a)(2) on the quality of the 
                child care services; and
                  (C) a list of State-developed child care 
                services quality targets quantified for such 
                fiscal year for such measures; and
          (2) beginning with fiscal year 2007, a report on the 
        State's progress in achieving such targets for the 
        preceding fiscal year.
    (d) Improvement Plan.--If the Secretary determines that a 
State failed to make progress as described in subsection (c)(2) 
for a fiscal year--
          (1) the State shall submit an improvement plan that 
        describes the measures the State will take to make that 
        progress; and
          (2) the State shall comply with the improvement plan 
        by a date specified by the Secretary but not later than 
        1 year after the date of the determination.
    (e) Construction.--Nothing in this subchapter shall be 
construed to require that the State apply measures for 
evaluating quality of child care services to specific types of 
child care providers.

           *       *       *       *       *       *       *


SEC. 658H. OPTIONAL PRIORITY USE OF ADDITIONAL FUNDS.

    (a) In General.--If a State receives funds to carry out 
this subchapter for a fiscal year, and the amount of the funds 
exceeds the amount of funds the State received to carry out 
this subchapter for fiscal year 2005, the State shall consider 
using a portion of the excess--
          (1) to support payment rate increases in accordance 
        with the market rates survey conducted pursuant to 
        section 658E(c)(4);
          (2) to support the establishment of tiered payment 
        rates as described in section 658G(a)(2)(D); and
          (3) to support payment rate increases for 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)).
    (b) No Requirement To Reduce Child Care Services.--Nothing 
in this section shall be construed to require a State to take 
an action that the State determines would result in a reduction 
of child care services to families of eligible children.
    (c) Payment Rate.--In this section, the term ``payment 
rate'' means the rate of State payment or reimbursement to 
providers for subsidized child care.

           *       *       *       *       *       *       *


SEC. 658I. ADMINISTRATION AND ENFORCEMENT.

     (a) Administration.--The Secretary shall--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 658J. PAYMENTS.

      (a) In General.-- * * *

           *       *       *       *       *       *       *


[SEC. 658K. REPORTS AND AUDITS.]

SEC. 658K. REPORTS AND AUDITS.

      [(a) Reports.--
          [(1) Collection of information by states.--
                  [(A) In general.--A State that receives funds 
                to carry out this subchapter shall collect the 
                information described in subparagraph (B) on a 
                monthly basis.
                  [(B) Required information.--The information 
                required under this subparagraph shall include, 
                with respect to a family unit receiving 
                assistance under this subchapter information 
                concerning--
                          [(i) family income;
                          [(ii) county of residence;
                          [(iii) the gender, race, and age of 
                        children receiving such assistance;
                          [(iv) whether the head of the family 
                        unit is a single parent;
                          [(v) the sources of family income, 
                        including--
                                  [(I) employment, including 
                                self-employment;
                                  [(II) cash or other 
                                assistance under--
                                          [(aa) the temporary 
                                        assistance for needy 
                                        families program under 
                                        part A of title IV of 
                                        the Social Security Act 
                                        (42 U.S.C. 601 et 
                                        seq.); and
                                          [(bb) a State program 
                                        for which State 
                                        spending is counted 
                                        toward the maintenance 
                                        of effort requirement 
                                        under section 409(a)(7) 
                                        of the Social Security 
                                        Act (42 U.S.C. 
                                        609(a)(7));
                                  [(III) housing assistance;
                                  [(IV) assistance under the 
                                Food Stamp Act of 1977; and
                                  [(V) other assistance 
                                programs;
                          [(vi) the number of months the family 
                        has received benefits;
                          [(vii) the type of child care in 
                        which the child was enrolled (such as 
                        family child care, home care, or 
                        center-based child care);
                          [(viii) whether the child care 
                        provider involved was a relative;
                          [(ix) the cost of child care for such 
                        families; and
                          [(x) the average hours per month of 
                        such are; during the period for which 
                        such information is required to be 
                        submitted.
                  [(C) Submission to secretary.--A State 
                described in subparagraph (A) shall, on a 
                quarterly basis, submit the information 
                required to be collected under subparagraph (B) 
                to the Secretary.
                  [(D) Use of samples.--
                          [(i) Authority.--A State may comply 
                        with the requirement to collect the 
                        information described in subparagraph 
                        (B) through the use of disaggregated 
                        case record information on a sample of 
                        families selected through the use of 
                        scientifically acceptable sampling 
                        methods approved by the Secretary.
                          [(ii) Sampling and other methods.--
                        The Secretary shall provide the States 
                        with such case sampling plans and data 
                        collection procedures as the Secretary 
                        deems necessary to produce 
                        statistically valid samples of the 
                        information described in subparagraph 
                        (B). The Secretary may develop and 
                        implement procedures for verifying the 
                        quality of data submitted by the 
                        States.
          [(2) Annual reports.--Not later than December 31, 
        1997, and every 12 months thereafter, a State described 
        in paragraph (1)(A) shall prepare and submit to the 
        Secretary a report that includes aggregate data 
        concerning--
                  [(A) the number of child care providers that 
                received funding under this subchapter as 
                separately identified based on the types of 
                providers listed in section 658P(5);
                  [(B) the monthly cost of child care services, 
                and the portion of such cost that is paid for 
                with assistance provided under this subchapter, 
                listed by the type of child care services 
                provided;
                  [(C) the number of payments made by the State 
                through vouchers, contracts, cash, and 
                disregards under public benefit programs, 
                listed by the type of child care services 
                provided;
                  [(D) the manner in which consumer education 
                information was provided to parents and the 
                number of parents to whom such information was 
                provided; and
                  [(E) the total number (without duplication) 
                of children and families served under this 
                subchapter; during the period for which such 
                report is required to be submitted.
                [(b) Audits.--
          [(1) Requirement.--A State shall, after the close of 
        each program period covered by an application approved 
        under section 658E(d) audit its expenditures during 
        such program period from amounts received under this 
        subchapter.
          [(2) Independent auditor.--Audits under this 
        subsection shall be conducted by an entity that is 
        independent of the State that receives assistance under 
        this subchapter and be in accordance with generally 
        accepted auditing principles.
          [(3) Submission.--Not later than 30 days after the 
        completion of an audit under this subsection, the State 
        shall submit a copy of the audit to the legislature of 
        the State and to the Secretary.
          [(4) Repayment of amounts.--Each State shall repay to 
        the United States any amounts determined through an 
        audit under this subsection not to have been expended 
        in accordance with this subchapter, or the Secretary 
        may offset such amounts against any other amount to 
        which the State is or may be entitled under this 
        subchapter.]
    (a) Reports.--
          (1) In general.--A State that receives funds to carry 
        out this subchapter shall collect the information 
        described in paragraph (2) on a monthly basis.
          (2) Required information.--The information required 
        under this paragraph shall include, with respect to a 
        family unit receiving assistance under this subchapter, 
        information concerning--
                  (A) family income;
                  (B) county of residence;
                  (C) the gender, race, and age of children 
                receiving such assistance;
                  (D) whether the head of the family unit is a 
                single parent;
                  (E) the sources of family income, including--
                          (i) employment, including self-
                        employment; and
                          (ii) assistance under a State program 
                        funded under part A of title IV of the 
                        Social Security Act (42 U.S.C. 601 et 
                        seq.) and a State program for which 
                        State spending is counted toward the 
                        maintenance of effort requirement under 
                        section 409(a)(7) of the Social 
                        Security Act (42 U.S.C. 609(a)(7));
                  (F) the type of child care in which the child 
                was enrolled (such as family child care, home 
                care, center-based child care, or other types 
                of child care described in section 658T(5));
                  (G) whether the child care provider involved 
                was a relative;
                  (H) the cost of child care for such family, 
                separately stating the amount of the subsidy 
                payment of the State and the amount of the 
                copayment of the family toward such cost;
                  (I) the average hours per month of such care;
                  (J) household size;
                  (K) whether the parent involved reports that 
                the child has an individualized education 
                program or an individualized family service 
                plan, as such terms are defined in section 602 
                of the Individuals with Disabilities Education 
                Act (20 U.S.C. 1401); and
                  (L) the reason for any termination of 
                benefits under this subchapter, including 
                whether the termination was due to--
                          (i) the child's age exceeding the 
                        allowable limit;
                          (ii) the family income exceeding the 
                        State eligibility limit;
                          (iii) the State recertification or 
                        administrative requirements not being 
                        met;
                          (iv) parent work, training, or 
                        education status no longer meeting 
                        State requirements;
                          (v) a nonincome related change in 
                        status; or
                          (vi) other reasons;
                during the period for which such information is 
                required to be submitted.
          (3) Submission to secretary.--A State described in 
        paragraph (1) shall, on a quarterly basis, submit to 
        the Secretary the Information required to be collected 
        under paragraph (2) and the number of children and 
        families receiving assistance under this subchapter 
        (stated on a monthly basis). Information on the number 
        of families receiving the assistance shall also be 
        posted on the website of such State. In the fourth 
        quarterly report of each year, a State described in 
        paragraph (1) shall also submit to the Secretary 
        information on the annual number and type of child care 
        providers (as described in section 658T(5)) that 
        received funding under this subchapter and the annual 
        number of payments made by the State through vouchers, 
        under contracts, or by payment to parents reported by 
        type of child care provider.
          (4) Use of samples.--
                  (A) Authority.--A State may comply with the 
                requirement to collect the information 
                described in paragraph (2) through the use of 
                disaggregated case record information on a 
                sample of families selected through the use of 
                scientifically acceptable sampling methods 
                approved by the Secretary.
                  (B) Sampling and other methods.--The 
                Secretary shall provide the States with such 
                case sampling plans and data collection 
                procedures as the Secretary determines 
                necessary to produce statistically valid 
                samples of the information described in 
                paragraph (2). The Secretary may develop and 
                implement procedures for verifying the quality 
                of data submitted by the States.

           *       *       *       *       *       *       *


[SEC. 658L. REPORT BY SECRETARY.

    [Not later than July 31, 1998, and biennially thereafter, 
the Secretary shall prepare and submit to the Committee on 
Economic and Educational Opportunities of the House of 
Representatives and the Committee on Labor and Human Resources 
of the Senate a report that contains a summary and analysis of 
the data and information provided to the Secretary in the State 
reports submitted under section 658K. Such report shall include 
an assessment, and where appropriate, recommendations for the 
Congress concerning efforts that should be undertaken to 
improve the access of the public to quality and affordable 
child care in the United States.]

SEC. 658L. NATIONAL ACTIVITIES.

    (a) Report.--
          (1) In general.--The Secretary shall, not later than 
        April 30, 2006, and annually thereafter prepare and 
        submit to the Committee on Education and the Workforce 
        of the House of Representatives and the Committee on 
        Health, Education, Labor, and Pensions of the Senate, 
        and, not later than 30 days after the date of such 
        submission, post on the Department of Health and Human 
        Services website, a report that contains the following:
                  (A) A summary and analysis of the data and 
                information provided to the Secretary in the 
                State reports submitted under sections 658E, 
                658G(c), and 658K.
                  (B) Aggregated statistics on and an analysis 
                of the supply of, demand for, and quality of 
                child care, early education, and nonschool-hour 
                programs.
                  (C) An assessment and, where appropriate, 
                recommendations for Congress concerning efforts 
                that should be undertaken to improve the access 
                of the public to quality and affordable child 
                care in the United States.
                  (D) A progress report describing the progress 
                of the States in streamlining data reporting, 
                the Secretary's plans and activities to provide 
                technical assistance to States, and an 
                explanation of any barriers to getting data in 
                an accurate and timely manner.
          (2) Collection of information.--The Secretary may 
        make arrangements with resource and referral 
        organizations, to utilize the child care data system of 
        the resource and referral organizations at the 
        national, State, and local levels, to collect the 
        information required by paragraph (1)(B).
    (b) Grants To Improve Quality and Access.--
          (1) In general.--The Secretary shall award grants to 
        States, from allotments made under paragraph (2), to 
        improve the quality of and access to child care for 
        infants and toddlers, subject to the availability of 
        appropriations for this purpose.
          (2) Allotments.--From funds reserved under section 
        685O(a)(3) for a fiscal year, the Secretary shall allot 
        to each State an amount that bears the same 
        relationship to such funds as the amount the State 
        receives for the fiscal year under section 658O bears 
        to the amount all States receive for the fiscal year 
        under section 658O.
    (c) Toll-Free Hotline.--The Secretary shall award a grant 
or contract, or enter into a cooperative agreement, for the 
operation of a national toll-free hotline to assist families in 
accessing local information on child care options and providing 
consumer education materials, subject to the availability of 
appropriations for this purpose.
    (d) Technical Assistance.--The Secretary shall provide 
technical assistance to States on developing and conducting the 
State market rates survey described in section 
658E(c)(4)(A)(i).

           *       *       *       *       *       *       *


SEC. 658M. LIMITATIONS ON USE OF FINANCIAL ASSISTANCE FOR CERTAIN 
                    PURPOSES.

    (a) Sectarian Purposes and Activities.-- * * *

           *       *       *       *       *       *       *


SEC. 658N. NONDISCRIMINATION.

    (a) Religious Nondiscrimination.--
          (1) Construction.--
          (2) In general.-- * * *

           *       *       *       *       *       *       *


SEC 658O. AMOUNTS RESERVED; ALLOTMENTS.

    (a) Amounts Reserved.--
          (1) Territories and possessions.-- * * *
          (2) Indian Tribes.--The Secretary shall reserve [not 
        less than 1 percent, and not more than 2 percent,] 2 
        percent of the amount appropriated under section 658B 
        in each fiscal year for payments to Indian tribes and 
        tribal organizations with applications approved under 
        subsection (c).
          (3) Grants to improve quality and access.--The 
        Secretary shall reserve an amount not to exceed 
        $100,000,000 for each fiscal year to carry out section 
        658L(b), subject to the availability of appropriations 
        for this purpose.
          (4) Toll-free hotline.--The Secretary shall reserve 
        an amount not to exceed $1,000,000 to carry out section 
        658L(c), subject to the availability of appropriations 
        for this purpose.

           *       *       *       *       *       *       *

    (b) State Allotment.--
          (1) General rule.-- * * *

           *       *       *       *       *       *       *

    (c) Payments for the Benefit of Indian Children.--
          (1) General authority.--From amounts reserved under 
        subjection (a)(2), the Secretary may make grants to or 
        enter into contracts with Indian tribes or tribal 
        organizations that submit applications under this 
        section (in accordance with the requirements of 
        subparagraphs (E) and (F) of section 658E(c)(2) for 
        such tribes or organizations), for the planning and 
        carrying out of programs or activities consistent with 
        the purposes of this subchapter.

           *       *       *       *       *       *       *


SEC. 658P. RULES OF CONSTRUCTION.

    Nothing in this subchapter shall be construed to require a 
State to impose State child care licensing requirements on any 
type of early childhood provider, including any such provider 
who is exempt from State child care licensing requirements on 
the date of enactment of the Caring for Children Act of 2005.

           *       *       *       *       *       *       *


SEC. 658Q. PARENTAL RIGHTS AND RESPONSIBILITIES.

           *       *       *       *       *       *       *


SEC. 658R. SEVERABILITY.

           *       *       *       *       *       *       *


SEC. 658S. MISCELLANEOUS PROVISIONS.

           *       *       *       *       *       *       *


SEC. [658P] 658T. DEFINITIONS.

    As used in this subchapter:
          (1) Caregiver.-- * * *
          (2) Child care certificate.-- * * *
          (3) Child with special needs.--The term ``child with 
        special needs'' means--
                  (A) a child with a disability, as defined in 
                section 602 of the Individuals with 
                Disabilities Education Act (20 U.S.C. 1401);
                  (B) a child who is eligible for early 
                intervention services under part C of the 
                Individuals with Disabilities Education Act (20 
                U.S.C. 1431 et seq.); and
                  (C) a child with special needs, as defined by 
                the State involved.
          (4) Eligible child.--The term ``eligible child'' 
        means an individual--
                  
                  (A) * * *
                  (B) whose family income does not exceed [85 
                percent of the State median income for a family 
                of the same size] an income level determined by 
                the State involved, with priority based on need 
                as defined by the State; and
                  (C) who--
                          (i) resides with [a parent or 
                        parents] a parent (including a legal 
                        guardian or foster parent) or parents 
                        who are working or attending a job 
                        training or educational program; or
                          [(ii) is receiving, or needs to 
                        receive, protective services and 
                        resides with a parent or parents not 
                        described in clause (i).]
                          (ii)(I) is receiving, or needs to 
                        receive, protective services (which may 
                        include foster care) or is a child with 
                        significant cognitive or physical 
                        disabilities as defined by the State; 
                        and
                          (II) resides with a parent (including 
                        a legal guardian or foster parent) or 
                        parents not described in clause (i).

           *       *       *       *       *       *       *

          (8) Lead agency.--The term ``lead agency'' means the 
        agency designated under [section 658B(a)] section 
        658D(a).
          (9) Parent.--The term ``parent'' includes a legal 
        guardian, foster parent, or other person standing in 
        loco parentis.

           *       *       *       *       *       *       *

          (1) Tribal organization.--
                  (A) In general.-- * * *
                  (B) Other organizations.--Such term includes 
                a [Native Hawaiian Organization, as defined in 
                section 4009(4) of the Augustus F. Hawkins-
                Robert T. Stafford Elementary and Secondary 
                School Improvement Amendments of 1988 (20 
                U.S.C. 4909(4)] Native Hawaiian organization, 
                as defined in section 7207 of the Elementary 
                and Secondary Education Act of 1965 (20 U.S.C. 
                7517) and a private nonprofit organization 
                established for the purpose of serving youth 
                who are Indians or Native Hawaiians.

           *       *       *       *       *       *       *


                                  
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