[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4030 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4030

 To make child care more affordable for working families and for stay-
at-home parents with children under the age of 4, to double the number 
   of children receiving child care assistance, to provide for after-
 school care, and to improve child care safety and quality and enhance 
                      early childhood development.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 10, 1998

Mrs. Kennelly of Connecticut (for herself, Mrs. Tauscher, Mr. Fazio of 
  California, Mr. Gephardt, Ms. DeLauro, Mr. Levin, Mr. Weygand, Ms. 
Lofgren, Mr. Doggett, Mrs. Clayton, Mr. McDermott, Mr. Abercrombie, Ms. 
   Slaughter, Ms. Woolsey, Mr. Hoyer, Mrs. Maloney of New York, Mrs. 
 Lowey, Mr. Allen, Ms. Carson, Ms. Stabenow, Mr. Manton, Mr. Moran of 
  Virginia, Ms. Jackson-Lee of Texas, Mr. Ackerman, Mr. Andrews, Mr. 
   Baldacci, Mr. Barrett of Wisconsin, Mr. Becerra, Mr. Bentsen, Mr. 
Blumenauer, Mr. Bonior, Mr. Borski, Mr. Boswell, Mr. Boucher, Mr. Brady 
  of Pennsylvania, Ms. Brown of Florida, Mr. Brown of California, Mr. 
Brown of Ohio, Mrs. Capps, Ms. Christian-Green, Mr. Clay, Mr. Clement, 
  Mr. Conyers, Mr. Costello, Mr. Cummings, Mr. Davis of Illinois, Ms. 
 DeGette, Mr. Delahunt, Mr. Dicks, Mr. Dingell, Mr. Engel, Mr. Evans, 
 Mr. Faleomavaega, Mr. Farr of California, Mr. Fattah, Mr. Filner, Mr. 
Ford, Mr. Frost, Ms. Furse, Mr. Gejdenson, Mr. Gordon, Ms. Harman, Mr. 
Hastings of Florida, Mr. Hefner, Mr. Hinchey, Mr. Hinojosa, Mr. Holden, 
   Ms. Hooley of Oregon, Mr. Jefferson, Ms. Eddie Bernice Johnson of 
  Texas, Mr. Kanjorski, Ms. Kaptur, Mr. Kennedy of Massachusetts, Mr. 
 Kennedy of Rhode Island, Ms. Kilpatrick, Mr. Lampson, Mr. Lantos, Mr. 
 Lee, Mr. Lewis of Georgia, Mr. Martinez, Mr. Matsui, Mrs. McCarthy of 
  New York, Ms. McCarthy of Missouri, Mr. McGovern, Mr. McNulty, Mrs. 
  Meek of Florida, Mr. Meeks of New York, Ms. Millender-McDonald, Mr. 
Miller of California, Mrs. Mink of Hawaii, Mr. Moakley, Mr. Nadler, Mr. 
    Neal of Massachusetts, Ms. Norton, Mr. Oberstar, Mr. Olver, Mr. 
    Pallone, Mr. Payne, Ms. Pelosi, Mr. Poshard, Mr. Price of North 
Carolina, Mr. Rahall, Mr. Rodriguez, Mr. Romero-Barcelo, Mr. Sabo, Ms. 
Sanchez, Mr. Sandlin, Mr. Sawyer, Mr. Schumer, Mr. Scott, Mr. Serrano, 
   Mr. Sherman, Mr. Snyder, Mr. Stark, Mr. Stokes, Mrs. Thurman, Mr. 
   Torres, Mr. Underwood, Ms. Velazquez, Mr. Vento, Ms. Waters, Mr. 
 Waxman, Mr. Wexler, Mr. Wynn, and Mr. Yates) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committees on Education and the Workforce, Banking and 
Financial Services, and the Judiciary, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To make child care more affordable for working families and for stay-
at-home parents with children under the age of 4, to double the number 
   of children receiving child care assistance, to provide for after-
 school care, and to improve child care safety and quality and enhance 
                      early childhood development.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable and Quality Child Care 
Act of 1998''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                    TITLE I--FUNDING FOR CHILD CARE

Sec. 101. Child care subsidy funding.
               TITLE II--DEPENDENT CARE TAX CREDIT REFORM

Sec. 201. Increase in dependent care tax credit; equivalent benefit 
                            where one parent stays at home to provide 
                            child care for child under age 4.
Sec. 202. Allowance of credit for employer expenses for child care 
                            assistance.
Sec. 203. Dependent care credit allowed against the alternative minimum 
                            tax.
                TITLE III--GRANTS TO BUSINESS CONSORTIA

                       Subtitle A--Grant Program

Sec. 301. Authority to make grants.
Sec. 302. Application.
Sec. 303. Use of amounts.
Sec. 304. Requirement of matching funds.
                     Subtitle B--General Provisions

Sec. 351. Definitions.
Sec. 352. Authorization of appropriations.
                     TITLE IV--AFTER SCHOOL PROGRAM

          Subtitle A--21st Century Community Learning Centers

Sec. 401. Program authorization.
Sec. 402. Applications.
Sec. 403. Uses of funds.
Sec. 404. Definition.
Sec. 405. Continuation awards under current statute.
Sec. 406. Effective date.
                    Subtitle B--After School Snacks

Sec. 411. Child and Adult Care Food Program; meal supplements for 
                            children in afterschool care.
              Subtitle C--After-School Prevention Programs

Sec. 421. Authorized activities.
              TITLE V--MODEL STATES EARLY LEARNING PROGRAM

Sec. 501. Model States early learning program.
                TITLE VI--STANDARDS ENFORCEMENT PROGRAM

Sec. 601. Child care standards enforcement program.
           TITLE VII--CHILD CARE PROVIDER SCHOLARSHIP PROGRAM

Sec. 701. National child care provider scholarship program.
             TITLE VIII--RESEARCH AND DEMONSTRATION PROGRAM

Sec. 801. Research and demonstrations.
                        TITLE IX--MISCELLANEOUS

                Subtitle A--Child and Adult Food Program

Sec. 901. Revision of reimbursement rates for family or group day care 
                            homes under the child and adult care food 
                            program under the National School Lunch 
                            Act.
     Subtitle B--Mortgage Insurance for Child Care and Development 
                               Facilities

Sec. 951. Short title.
Sec. 952. Congressional findings.
Sec. 953. Insurance for mortgages on new and rehabilitated child care 
                            and development facilities.
Sec. 954. Insurance for mortgages for acquisition or refinancing debt 
                            of existing child care and development 
                            facilities.
Sec. 955. Children's Development Commission.
Sec. 956. Study of availability of secondary markets for mortgages on 
                            child care facilities.
                   Subtitle C--Sense of the Congress

Sec. 971. Sense of the Congress.

                    TITLE I--FUNDING FOR CHILD CARE

SEC. 101. CHILD CARE SUBSIDY FUNDING.

    (a) Appropriation; Allocation.--Section 418 of the Social Security 
Act (42 U.S.C. 618) is amended--
            (1) by redesignating subsections (b), (c), and (d) as 
        subsections (d), (e), and (f), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) Child Care Subsidy Funding.--
            ``(1) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated to carry out this subsection--
                    ``(A) $1,155,000,000 for fiscal year 1999;
                    ``(B) $1,280,000,000 for fiscal year 2000;
                    ``(C) $1,400,000,000 for fiscal year 2001;
                    ``(D) $1,600,000,000 for fiscal year 2002; and
                    ``(E) $2,065,000,000 for fiscal year 2003.
            ``(2) Reservation and allotment of funds.--
                    ``(A) Among indian tribes.--The Secretary shall 
                reserve 2 percent of the total amount appropriated 
                pursuant to paragraph (1) of this subsection for any 
                fiscal year for payments to Indian tribes. From the 
                amount so reserved for a fiscal year, the Secretary 
                shall allot to an Indian tribe for the fiscal year an 
                amount that bears the same proportion to the amount so 
                reserved as the proportion of funds provided to the 
                Indian tribe under section 658O(c) of the CCDBG Act for 
                the fiscal year bears to the total amount paid to all 
                Indian tribes under such section for the fiscal year.
                    ``(B) Quality assurance and quality improvement 
                activities.--From all amounts appropriated pursuant to 
                paragraph (1) of this subsection, the Secretary shall 
                reserve an aggregate of $1,000,000, which shall be 
                available only for quality assurance and quality 
                improvement activities relating to programs under the 
                CCDBG Act.
                    ``(C) Among the states and territories.--The 
                Secretary shall allot the total amount appropriated 
                pursuant to paragraph (1) of this subsection for a 
                fiscal year that remains after applying subparagraphs 
                (A) and (B) of this paragraph for the fiscal year, 
                among the States and the territories pursuant to the 
                formula specified in section 403(n) (as such section 
                was in effect before August 22, 1996), without regard 
                to any limitation imposed by section 1108.
            ``(3) Matching payments to states and territories.--
                    ``(A) In general.--Notwithstanding section 1108, 
                the Secretary shall pay to each State and territory for 
                a fiscal year an amount equal to the lesser of--
                            ``(i) the amount allotted to the State or 
                        territory for the fiscal year under paragraph 
                        (2)(C) of this subsection; or
                            ``(ii) 80 percent of expenditures by the 
                        State or territory during the fiscal year--
                                    ``(I) that are for any purpose 
                                authorized under the approved plan of 
                                the State or territory under the CCDBG 
                                Act;
                                    ``(II) that, in the case of a 
                                State, are in excess of expenditures 
                                necessary to secure payment of the full 
                                amount of the State's allotment (if 
                                any) under subsection (a)(2) of this 
                                section (determined without regard to 
                                subparagraph (D) thereof); and
                                    ``(III) for which Federal matching 
                                payments or reimbursements are not 
                                otherwise authorized to be made.
                    ``(B) Redistribution.--Subsection (a)(2)(D) shall 
                apply to amounts allotted to States under this 
                subsection.
            ``(4) Payments to indian tribes.--The Secretary shall pay 
        to an Indian tribe for a fiscal year an amount equal to the 
        lesser of--
                    ``(A) the amount allotted to the Indian tribe under 
                paragraph (2)(A) of this subsection for the fiscal 
                year; or
                    ``(B) the total amount of expenditures by the 
                Indian tribe during the fiscal year for purposes 
                authorized under the CCDBG Act for which Federal 
                payments are not otherwise authorized to be made.
            ``(5) Targeting of funds.--
                    ``(A) Child care assistance for working non-welfare 
                families.--A State or territory to which amounts are 
                provided under this subsection shall use not less than 
                70 percent of the amounts for child care assistance to 
                working families who are not recipients of assistance 
                under the State or territory program funded under 
                section 403(a)(1).
                    ``(B) Child care assistance for young children.--A 
                State or territory to which amounts are provided under 
                this subsection shall use not less than 40 percent of 
                the amounts for child care assistance for children who 
                have not attained 4 years of age.''.
    (b) Inclusion of Territories in Definitions.--Section 418(f) of 
such Act, as so redesignated by subsection (a)(1) of this section, is 
amended to read as follows:
    ``(f) Definitions.--In this section:
            ``(1) CCDBG act.--The term `CCDBG Act' means the Child Care 
        and Development Block Grant Act of 1990 (42 U.S.C. 9801 et 
        seq.).
            ``(2) State.--The term `State' means each of the 50 States, 
        the District of Columbia, and (except for purposes of 
        subsection (a)) the Commonwealth of Puerto Rico.
            ``(3) Territory.--The term `territory' means the United 
        States Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.''.
    (c) Conforming Amendments.--
            (1) Section 418(a)(3) of such Act (42 U.S.C. 618(a)(3)) is 
        amended by striking ``section'' and inserting ``subsection''.
            (2) Section 418(c) of such Act, as so redesignated by 
        subsection (a)(1) of this section, is amended in paragraphs (1) 
        and (2) by striking ``under this section'' each place it 
        appears and inserting ``under subsection (a)''.

               TITLE II--DEPENDENT CARE TAX CREDIT REFORM

SEC. 201. INCREASE IN DEPENDENT CARE TAX CREDIT; EQUIVALENT BENEFIT 
              WHERE ONE PARENT STAYS AT HOME TO PROVIDE CHILD CARE FOR 
              CHILD UNDER AGE 4.

    (a) In General.--Paragraph (2) of section 21(a) of the Internal 
Revenue Code of 1986 (relating to expenses for household and dependent 
care services necessary for gainful employment) is amended to read as 
follows:
            ``(2) Applicable percentage defined.--For purposes of 
        paragraph (1), the term `applicable percentage' means 50 
        percent reduced (but not below 20 percent) by 1 percentage 
        point for each $1,000 (or fraction thereof) by which the 
        taxpayer's adjusted gross income for the taxable year exceeds 
        $30,000.''
    (b) Equivalent of Increased Benefit Where Parent Stays at Home To 
Provide Child Care for Child Under Age 4.--
            (1) In general.--Section 24 of such Code (relating to child 
        tax credit) is amended by redesignating subsections (e) and (f) 
        as subsections (f) and (g), respectively, and by inserting 
        after subsection (e) the following new subsection:
    ``(f) Additional Credit if Taxpayer has Qualifying Child Under Age 
4.--
            ``(1) In general.--If any qualifying child of the taxpayer 
        is a young child, the credit allowed by subsection (a) shall be 
        increased by the increased dependent care credit equivalent 
        amount.
            ``(2) Increased dependent care credit equivalent amount.--
        For purposes of paragraph (1), the term `increased dependent 
        care credit equivalent amount' means, with respect to any 
        taxable year beginning in a calendar year, an amount equal to--
                    ``(A) the amount estimated by the Secretary (for 
                taxable years beginning in the preceding calendar year) 
                as being equal to the average employment-related 
                expenses which are taken into account under section 
                21(a) by taxpayers who have only one qualifying 
                individual and that qualifying individual is a young 
                child, multiplied by
                    ``(B) the percentage equal to the excess (if any) 
                of--
                            ``(i) the percentage applicable to the 
                        taxpayer under section 21(a)(2), over
                            ``(ii) the percentage which would be 
                        applicable to the taxpayer under section 
                        21(a)(2) as in effect on the day before the 
                        date of the enactment of this paragraph.
            ``(3) Young child.--For purposes of this subsection, the 
        term `young child' means any individual who has not attained 
        the age of 4 as of the close of the calendar year in which the 
        taxable year of the taxpayer begins.
            ``(4) Coordination with dependent care credit.--Credit 
        shall be allowed under this subsection to a taxpayer for a 
        taxable year only if the taxpayer elects not to have section 21 
        apply for such year.''
            (2) Conforming amendment.--Subparagraph (I) of section 
        6213(g)(2) of such Code is amended by striking ``section 
        24(e)'' and inserting ``section 24(f)''.
    (c) Inflation Adjustment of Dollar Amounts.--
            (1) Section 21 of such Code is amended by adding at the end 
        the following new subsection:
    ``(c) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 1999, the $30,000 amount contained 
in subsection (a) and the $2,400 amount in subsection (c) shall be 
increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year by substituting 
        `calendar year 1998' for `calendar year 1992' in subparagraph 
        (B) thereof.
If the increase determined under the preceding sentence is not a 
multiple of $50, such amount shall be rounded to the next lowest 
multiple of $50.''
            (2) Paragraph (2) of section 21(c) of such Code is amended 
        by striking ``$4,800'' and inserting ``twice the dollar amount 
        applicable under paragraph (1)''.
            (3) Paragraph (2) of section 21(d) of such Code is amended 
        by striking ``less than--'' and all that follows through the 
        end of the first sentence and inserting ``less than \1/12\ of 
        the amount which applies under subsection (c) to the taxpayer 
        for the taxable year.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 202. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE 
              ASSISTANCE.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

    ``(a) In General.--For purposes of section 38, the employer-
provided child care credit determined under this section for the 
taxable year is an amount equal to 25 percent of the qualified child 
care expenditures of the taxpayer for such taxable year.
    ``(b) Dollar Limitation.--The credit allowable under subsection (a) 
for any taxable year shall not exceed $150,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care expenditure.--The term 
        `qualified child care expenditure' means any amount paid or 
        incurred--
                    ``(A) to acquire, construct, rehabilitate, or 
                expand property--
                            ``(i) which is to be used as part of a 
                        qualified child care facility of the taxpayer,
                            ``(ii) with respect to which a deduction 
                        for depreciation (or amortization in lieu of 
                        depreciation) is allowable, and
                            ``(iii) which does not constitute part of 
                        the principal residence (within the meaning of 
                        section 121) of the taxpayer or any employee of 
                        the taxpayer,
                    ``(B) for the operating costs of a qualified child 
                care facility of the taxpayer, including costs related 
                to the training of employees, to scholarship programs, 
                and to the providing of increased compensation to 
                employees with higher levels of child care training,
                    ``(C) under a contract with a qualified child care 
                facility to provide child care services to employees of 
                the taxpayer,
                    ``(D) under a contract to provide child care 
                resource and referral services to employees of the 
                taxpayer, or
                    ``(E) for the costs of seeking accreditation from a 
                child care credentialing or accreditation entity.
            ``(2) Qualified child care facility.--
                    ``(A) In general.--The term `qualified child care 
                facility' means a facility--
                            ``(i) the principal use of which is to 
                        provide child care assistance, and
                            ``(ii) which meets the requirements of all 
                        applicable laws and regulations of the State or 
                        local government in which it is located, 
                        including, but not limited to, the licensing of 
                        the facility as a child care facility.
                Clause (i) shall not apply to a facility which is the 
                principal residence (within the meaning of section 121) 
                of the operator of the facility.
                    ``(B) Special rules with respect to a taxpayer.--A 
                facility shall not be treated as a qualified child care 
                facility with respect to a taxpayer unless--
                            ``(i) enrollment in the facility is open to 
                        employees of the taxpayer during the taxable 
                        year,
                            ``(ii) services available at such facility 
                        do not discriminate in favor of employees of 
                        the taxpayer who are highly compensated 
                        employees (within the meaning of section 
                        414(q)), and
                            ``(iii) in the case of a facility which is 
                        owned or operated by the taxpayer, at least 30 
                        percent of the enrollees of such facility are 
dependents of employees of the taxpayer.
    ``(d) Recapture of Acquisition and Construction Credit.--
            ``(1) In general.--If, as of the close of any taxable year, 
        there is a recapture event with respect to any qualified child 
        care facility of the taxpayer, then the tax of the taxpayer 
        under this chapter for such taxable year shall be increased by 
        an amount equal to the product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified child care 
                expenditures of the taxpayer described in subsection 
                (c)(1)(A) with respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture event occurs in:
                                                         percentage is:
                Years 1-3............................          100     
                Year 4...............................           85     
                Year 5...............................           70     
                Year 6...............................           55     
                Year 7...............................           40     
                Year 8...............................           25     
                Years 9 and 10.......................           10     
                Years 11 and thereafter..............            0.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified child care facility is placed in 
                service by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Cessation of operation.--The cessation of the 
                operation of the facility as a qualified child care 
                facility.
                    ``(B) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a taxpayer's 
                        interest in a qualified child care facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under subpart A, B, or D of this 
                part.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility as a 
                qualified child care facility by reason of a casualty 
                loss to the extent such loss is restored by 
                reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons which are treated as 
        a single employer under subsections (a) and (b) of section 52 
        shall be treated as a single taxpayer.
            ``(2) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(3) Partnerships.--In the case of partnerships, the 
        credit under this section shall be determined at the 
        partnership level and allocated among the partners under 
        regulations prescribed by the Secretary; except that--
                    ``(A) subsection (b) shall be applied at the 
                partner level, and
                    ``(B) the employees of the partnership and of each 
                partner shall be treated as employees of the taxpayer 
                for purposes of applying subsection (c)(2)(B)(iii).
    ``(f) No Double Benefit.--
            ``(1) Reduction in basis.--For purposes of this subtitle--
                    ``(A) In general.--If a credit is determined under 
                this section with respect to any property by reason of 
                expenditures described in subsection (c)(1)(A), the 
                basis of such property shall be reduced by the amount 
                of the credit so determined.
                    ``(B) Certain dispositions.--If during any taxable 
                year there is a recapture amount determined with 
                respect to any property the basis of which was reduced 
                under subparagraph (A), the basis of such property 
                (immediately before the event resulting in such 
                recapture) shall be increased by an amount equal to 
                such recapture amount. For purposes of the preceding 
                sentence, the term `recapture amount' means any 
                increase in tax (or adjustment in carrybacks or 
                carryovers) determined under subsection (d).
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.''
    (b) Conforming Amendments.--
            (1) Section 38(b) of such Code is amended--
                    (A) by striking ``plus'' at the end of paragraph 
                (11),
                    (B) by striking the period at the end of paragraph 
                (12), and inserting a comma and ``plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(13) the employer-provided child care credit determined 
        under section 45D.''.
            (2) Subsection (d) of section 39 of such Code (relating to 
        carryback and carryforward of unused credits) is amended by 
        adding at the end the following new paragraph:
            ``(9) No carryback of section 45d credit before january 1, 
        1999.--No portion of the unused business credit for any taxable 
        year which is attributable to the credit determined under 
        section 45D may be carried back to a taxable year beginning 
        before January 1, 1999.''.
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 45D. Employer-provided child care 
                                        credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 203. DEPENDENT CARE CREDIT ALLOWED AGAINST THE ALTERNATIVE MINIMUM 
              TAX.

    (a) In General.--Subsection (a) of section 26 of the Internal 
Revenue Code of 1986 is amended by inserting ``(other than the credit 
allowed by section 21)'' after ``credits allowed by this subpart''.
    (b) Conforming Amendment.--Section 21 of such Code is amended by 
adding at the end the following new subsection:
    ``(f) Limitation Based on Amount of Tax.--The aggregate credit 
allowed by this section for the taxable year shall not exceed the sum 
of--
            ``(1) the taxpayer's regular tax liability for the taxable 
        year reduced by the sum of the credits allowed by this subpart 
        other than this section, plus
            ``(2) the tax imposed by section 55 for such taxable 
        year.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

                TITLE III--GRANTS TO BUSINESS CONSORTIA

                       Subtitle A--Grant Program

SEC. 301. AUTHORITY TO MAKE GRANTS.

    (a) In General.--The Secretary shall make grants to States to be 
used to provide grants to eligible entities described in subsection (b) 
to assist such entities to improve access to affordable, local, quality 
child care services.
    (b) Eligible Entities Described.--
            (1) In general.--An eligible entity described in this 
        subsection is a consortium that--
                    (A) shall consist of representatives from not fewer 
                than 5 businesses (or a nonprofit organization that 
                represents not fewer than 5 businesses); and
                    (B) has not received a grant under this title.
            (2) Additional requirement.--To the maximum extent 
        practicable, each business or organization that forms an 
        eligible entity under paragraph (1) shall be located in the 
        same geographical region of the United States.
    (c) Priority for Small Businesses.--In providing grants under 
subsection (a), a State shall give priority to eligible entities that 
consist of a majority of representatives from small businesses.
    (d) Maximum Amount of Grant.--The amount of a grant provided to an 
eligible entity under subsection (a) may not exceed $50,000 for any 
fiscal year.

SEC. 302. APPLICATION.

    The Secretary may not provide a grant under section 301 to an 
eligible entity unless such entity submits to the Secretary an 
application that contains--
            (1) a proposal to use such grant to provide quality child 
        care services; and
            (2) such information as the Secretary may reasonably 
        require by rule.

SEC. 303. USE OF AMOUNTS.

    (a) In General.--The Secretary may not provide a grant under 
section 301 to an eligible entity unless such entity agrees to use such 
grant to initiate a quality, affordable, local child care program that 
carries out the proposal included in the application submitted under 
section 302 by such entity.
    (b) Conduct of Program.--In carrying out the program described in 
subsection (a), the eligible entity may--
            (1) establish a board of directors to oversee the program; 
        and
            (2) provide child care services on a sliding fee scale that 
        provides for cost sharing by the families of the children who 
        receive such services.
    (c) Administrative Costs.--The eligible entity may use not more 
than 15 percent of the amount of a grant to pay for administrative 
costs associated with the program described in subsection (a).

SEC. 304. REQUIREMENT OF MATCHING FUNDS.

    The Secretary may not provide a grant under section 301 to an 
eligible entity unless such entity agrees that--
            (1) it will make available non-Federal contributions toward 
        the costs of carrying out a program under section 303 in an 
        amount that is not less than $1 for each $1 of Federal funds 
        provided under a grant under section 301; and
            (2) of such non-Federal contributions, not less than $1 of 
        each such $2 shall be from businesses participating in the 
        eligible entity.

                     Subtitle B--General Provisions

SEC. 351. DEFINITIONS.

    For purposes of this title:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (2) State.--The term ``State'' has the meaning given such 
        term in section 658P of the of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858n).

SEC. 352. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $75,000,000 for each of the 
fiscal years 1999, 2000, 2001, 2002, and 2003 to carry out this title.

                     TITLE IV--AFTER SCHOOL PROGRAM

          Subtitle A--21st Century Community Learning Centers

SEC. 401. PROGRAM AUTHORIZATION.

    Section 10903 of the 21st Century Community Learning Centers Act 
(referred to in this subtitle as ``the Act'') is amended--
            (1) subsection (a)--
                    (A) by inserting ``(1) Grants to leas.'' after 
                ``Secretary.--'';
                    (B) in paragraph (1), as so designated--
                            (i) by striking ``rural and inner-city'' 
                        and all that follows through ``or to'' and 
                        inserting the following: ``local educational 
                        agencies, on behalf of public elementary or 
                        secondary schools, including middle schools, 
                        that serve communities with a substantial need 
                        for expanded learning opportunities, to enable 
                        them to establish or''; and
                            (ii) by striking ``a rural or inner-city 
                        community'' and inserting ``those 
                        communities''; and
                    (C) by adding after paragraph (1), as redesignated, 
                a new paragraph (2) to read as follows:
            ``(2) Grants to cbos.--The Secretary may reserve not more 
        than 10 percent of the funds appropriated to carry out this 
        part for any fiscal year to make grants to community-based 
        organizations to carry out projects, consistent with the 
        purpose of this part, with the concurrence of the local 
        educational agencies in their respective communities.'';
            (2) in subsection (b)--
                    (A) by striking ``States, among'' and inserting 
                ``States and among''; and
                    (B) by striking ``United States,'' and all that 
                follows through ``a State'' and inserting ``United 
                States''; and
            (3) in subsection (c), by striking ``3'' and inserting 
        ``5''.

SEC. 402. APPLICATIONS.

    Section 10904(a) of the Act is amended--
            (1) in the first sentence, by striking ``an elementary or 
        secondary school or consortium'' and inserting ``a local 
        educational agency, on behalf of one or more elementary or 
        secondary schools,'';
            (2) in paragraph (1), by striking ``or consortium'';
            (3) in paragraph (2), by striking ``and'' after the 
        semicolon;
            (4) in paragraph (3)--
                    (A) in subparagraph (D), by striking ``or 
                consortium''; and
                    (B) in subparagraph (E)--
                            (i) by striking ``or consortium''; and
                            (ii) in clause (ii), by striking the period 
                        at the end and inserting a semicolon; and
            (5) by adding at the end the following:
            ``(4) information demonstrating that the applicant will--
                    ``(A) provide not less than \1/2\ the annual cost 
                of project activities from sources other than funds 
                under this part, which may be provided in cash or in 
                kind, fairly evaluated, provided that not more than 50 
                percent of the applicant's contribution may come from 
                funds provided by the Secretary under other programs 
                that permit the use of those funds for those 
                activities, if the applicant determines, in good faith, 
                that it cannot otherwise meet the requirement of this 
                subparagraph; and
                    ``(B) in the 4th and 5th years of its project, 
                increase the percentage of the project's cost that is 
                paid for by funds other than those received under this 
                part; and
            ``(5) an assurance that the applicant will, in each year of 
        the project, maintain its fiscal effort, from non-Federal 
        sources, from the preceding fiscal year for the services it 
        provides with its grant under this part.''.

SEC. 403. USES OF FUNDS.

    Section 10905 of the Act is amended by striking ``may be used'' and 
all that follows through ``four'' and inserting the following: ``shall 
be used to establish or expand community learning centers that provide 
activities that offer significant expanded learning opportunities, such 
as before and after school, for children and youth in the community and 
that also may include any''.

SEC. 404. DEFINITION.

    Section 10906(1) of the Act is amended to read as follows:
            ``(1) provides extended learning services and that may 
        provide services that address other health, social services, 
        cultural, and recreational needs of the community; and;''.

SEC. 405. CONTINUATION AWARDS UNDER CURRENT STATUTE.

    The Act is further amended--
            (1) in section 10907, by striking ``appropriated'' and all 
        that follows to the end and inserting the following: 
        ``appropriated $200,000,000 for each of fiscal years 1999 
        through 2003.''; and
            (2) by adding after section 10907 a new section 10908 to 
        read as follows:

``SEC. 10908. CONTINUATION AWARDS.

    ``Notwithstanding any other provision of law, the Secretary may use 
funds appropriated under this part to make continuation awards for 
projects that were funded under this part with fiscal year 1998 funds, 
under the terms and conditions that applied to the original awards for 
those projects.''.

SEC. 406. EFFECTIVE DATE.

    This subtitle, and the amendments made by this subtitle, shall take 
effect on October 1, 1998.

                    Subtitle B--After School Snacks

SEC. 411. CHILD AND ADULT CARE FOOD PROGRAM; MEAL SUPPLEMENTS FOR 
              CHILDREN IN AFTERSCHOOL CARE.

    (a) Participation by Certain Additional Institutions Under the 
Child and Adult Care Food Program.--Section 17 of the National School 
Lunch Act (42 U.S.C. 1766) is amended by adding at the end the 
following:
    ``(q) Participation by Certain Additional Institutions Under the 
Program.--
            ``(1) In general.--Subject to the conditions in this 
        subsection, institutions that provide care to school children 
        during after-school hours, weekends, or holidays during the 
        regular school year may participate in the program authorized 
        under this section. Unless otherwise specified in this 
        subsection, all other provisions of this section shall apply to 
        these institutions.
            ``(2) Eligible children.--Reimbursement may be provided 
        under this subsection only for supplements served to children 
        who are not more than 18 years of age.
            ``(3) Supplement reimbursement.--
                    ``(A) Limitation.--Only supplements served to 
                eligible school children during after-school hours, 
                weekends, or holidays during the regular school year 
                may be claimed for reimbursement. Institutions may 
                claim reimbursement for only one supplement per child 
                per day.
                    ``(B) Rate.--Eligible supplements shall be 
                reimbursed at the rate for free supplements under 
                subsection (c)(3).
                    ``(C) No charge.--All supplements claimed for 
                reimbursement shall be served without charge.''.
    (b) Changes to Eligibility Requirements for Meal Supplements for 
Children in Afterschool Care.--Section 17A of such Act (42 U.S.C. 
1766a) is amended--
            (1) in subsection (a)(2)--
                    (A) in subparagraph (A), by adding ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking subparagraph (C);
            (2) by striking subsection (b); and
            (3) by redesignating subsections (c) and (d) as subsections 
        (b) and (c), respectively.

              Subtitle C--After-School Prevention Programs

SEC. 421. AUTHORIZED ACTIVITIES.

    The provisions of part R of title I of the Omnibus Crime Control 
and Safe Streets Act of 1968, as set forth in the amendment under 
section 302(a) of H.R. 3, as passed by the House on May 8, 1997, and in 
effect for purposes of title I (under the heading `Violent Crime 
Reduction Programs, State and Local Law Enforcement Assistance) of the 
Departments of Commerce, Justice, and State Appropriations Act, 1998 
(Public Law 105-119), shall apply for purposes of such Appropriations 
Act as if the following amendments were made to such provisions:
            (1) In section 1801(b) by striking ``amounts'' and 
        inserting the following: ``Fifty percent of the amount''.
            (2) By adding at the end of section 1801 the following:
    ``(c) Prevention.--50 percent of the amount paid to a State, unit 
of local government, or an eligible unit under this part shall be used 
by the State, unit of local government, or eligible unit for the 
purpose of improving prevention programs in juvenile justice system. 
The programs must include all of the following:
            ``(1) Operating after-school programs with high priority 
        given to programs designed and operated by law enforcement 
        personnel, such as police athletic leagues.
            ``(2) Targeting high-crime neighborhood and at-risk 
        juveniles.
            ``(3) Providing educational or recreational activities 
        designed to encourage law-abiding conduct, reduce the incidence 
        of criminal activity, or teach juveniles alternatives to crime.
            ``(4) Coordinating with State or local juvenile crime 
        control and juvenile offender accountability programs.''.
            (3) In section 1807(4), by striking ``section 1801(b)'' and 
        inserting ``subsections (b) and (c) of section 1801''.

              TITLE V--MODEL STATES EARLY LEARNING PROGRAM

SEC. 501. MODEL STATES EARLY LEARNING PROGRAM.

    (a) Funding.--Section 418 of the Social Security Act (42 U.S.C. 
618), as amended by section 101 of this Act, is amended--
            (1) by redesignating subsections (c), (d), and (e) as 
        subsections (d), (e), and (f), respectively; and
            (2) by inserting after subsection (b) the following:
    ``(c) Appropriations for Model States Early Learning Program.--
            ``(1) Appropriation.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated $600,000,000 for each of fiscal years 1999 through 
        2003 for carrying out activities related to early learning 
        programs in accordance with section 658T of the CCDBG Act.
            ``(2) Reservation and allotment of funds.--
                    ``(A) Indian tribes.--The Secretary shall reserve 2 
                percent of the total amount appropriated pursuant to 
                paragraph (1) of this subsection for each fiscal year 
                for payments to Indian tribes. From the amount so 
                reserved for a fiscal year, the Secretary shall allot 
                to an Indian tribe for the fiscal year an amount that 
                bears the same proportion to the amount so reserved as 
                the proportion of funds provided to the Indian tribe 
                under section 658O(c) of the CCDBG Act for the fiscal 
                year bears to the total amount paid to all Indian 
                tribes under such section for the fiscal year.
                    ``(B) Territories.--The Secretary shall reserve \1/
                2\ of 1 percent of the total amount appropriated 
                pursuant to paragraph (1) of this subsection for any 
                fiscal year for payments to the territories. From the 
                amount so reserved for a fiscal year, the Secretary 
                shall allot to a territory for the fiscal year an 
                amount that bears the same ratio to the amount so 
                reserved as the amount provided to the territory under 
                the CCDBG Act for fiscal year 1997 bears to the total 
                amount provided to all territories under such Act for 
                fiscal year 1997.
                    ``(C) Technical assistance for, and evaluation of, 
                early learning programs.--From all amounts appropriated 
                pursuant to paragraph (1) of this subsection, the 
                Secretary shall reserve an aggregate of $6,000,000, 
                which shall be available only for costs of providing 
                technical assistance to, and conducting national 
                evaluations of, State, local, and tribal early learning 
                programs under section 658T of the CCDBG Act.
                    ``(D) States.--The Secretary shall allot the total 
                amount appropriated for a fiscal year pursuant to 
                paragraph (1) of this subsection that remains after 
                applying subparagraphs (A), (B), and (C) of this 
                paragraph for the fiscal year, among the Model States 
                pursuant to the formula used for determining the amount 
                to be allotted to the State under section 658O of the 
                CCDBG Act.
            ``(3) Matching payments to states and territories.--
                    ``(A) In general.--The Secretary shall pay to each 
                State and each territory that is a Model State for a 
                fiscal year an amount equal to the lesser of--
                            ``(i) the amount allotted to the State or 
                        territory under paragraph (2) of this 
                        subsection; or
                            ``(ii) 80 percent of expenditures by the 
                        State or territory for an early learning 
                        program under a plan approved under section 
                        658T of the CCDBG Act.
                    ``(B) Redistribution.--Subsection (a)(2)(D) shall 
                apply to amounts allotted to States under this 
                subsection.
            ``(4) Payments to indian tribes.--The Secretary shall pay 
        to each Indian tribe for a fiscal year an amount equal to the 
        lesser of--
                    ``(A) the amount allotted to the Indian tribe under 
                paragraph (2)(A) of this subsection; or
                    ``(B) the total amount of expenditures by the tribe 
                for an early learning program under section 658T of the 
                CCDBG Act.
            ``(5) Model state.--In this subsection, the term `Model 
        State' means a State that has in effect under its plan under 
        section 658E of the CCDBG Act an early learning program plan 
        meeting the requirements specified in section 658T(b)(2) of 
        such Act.''.
    (b) Establishment of Model States Early Learning Program.--
            (1) State plan requirement.--Section 658E(c) of the Child 
        Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858c(c)) is amended by adding at the end the following:
            ``(6) Model states early learning program plan 
        requirements.--In the case of a State electing to implement an 
        early learning program under section 658T, the State plan shall 
        meet the requirements specified in section 658T(b)(2).''.
            (2) Model states early learning program.--The Child Care 
        and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
        seq.) is amended by adding at the end the following:

``SEC. 658T. MODEL STATES EARLY LEARNING PROGRAM.

    ``(a) Program Purpose.--The purpose of the program under this 
section is to enable States, through grants to communities, to support 
activities that promote children's healthy development during the 
earliest years of life and improve the quality of child care for 
children aged five and under, including those with disabilities.
    ``(b) Requirements for State Participation.--
            ``(1) In general.--In order to be eligible for Federal 
        matching funds under section 418(c) of the Social Security Act, 
        the State shall have in effect under its plan under section 
        658E an early learning program plan meeting the requirements 
        specified in paragraph (2).
            ``(2) Model states early learning program plan 
        requirements.--The model states early learning program plan 
        shall meet the following requirements:
                    ``(A) Lead agency.--The plan shall provide that the 
                program will be administered by the lead agency 
                designated under 658D.
                    ``(B) Certification.--The plan shall include a 
                certification that--
                            ``(i) there is in effect in such State, and 
                        that the State maintains a mechanism to 
                        enforce, a requirement that each center-based 
                        child care provider, and each group home child 
                        care provider, in such State obtain from such 
                        State, or from an entity of local government 
                        designated by such State, a preemployment 
                        criminal background check of each individual 
                        subsequently employed by such provider to 
                        provide child care services,
                            ``(ii) there is in effect in such State, 
                        and that such State enforces, a requirement 
                        that an entity of State or local government 
                        periodically inspect center-based child care 
                        providers, group home child care 
                        providers,family child care providers, and all 
                        other child care providers for compliance with 
                        the health and safety requirements applicable 
                        to such providers under State law.
                            ``(iii) there is in effect in such State, 
                        and that such State enforces, a requirement 
                        that all caregivers who provide child care 
                        services for which assistance is provided under 
                        the Child Care and Development Block Grant Act 
                        of 1990 (42 U.S.C. 9858 et seq.), receive 
                        training in providing medical first aid.
                            ``(iv) there is in effect in such State, 
                        and that such State enforces, a requirement 
                        that caregivers who are, or are employed by, 
                        child care providers who provide child care 
                        services for compensation have specific minimum 
                        training as determined and provided by the lead 
                        agency.
                            ``(v) there is in effect in such State, and 
                        that such State enforces, a requirement that 
                        all child care providers in such State who 
                        provide child care services for compensation 
                        obtain from the parents (or legal guardians) of 
                        the children who receive such services 
                        information regarding whether such children 
                        have received age-appropriate immunizations in 
                        accordance with the then current immunization 
                        recommendations issued by the Centers for 
                        Disease Control and Prevention.
                            ``(vi) there is in effect in such State, 
                        and that such State enforces, a requirement 
                        that specifies developmentally appropriate 
                        child-per-caregiver ratios applicable to 
                        center-based child care providers in such 
                        State.
                            ``(vii) such State complies with section 
                        58E(c)(4)(A) of the Child Care and Development 
                        Block Grant Act (42 U.S.C. 9858c(c)(4)(A)).
                    ``(C) Assurances.--The plan shall include an 
                assurance that--
                            ``(i) such State will comply with the 
                        requirements of this subtitle applicable with 
                        respect to such grant.
                            ``(ii) the State will not reduce or remove 
                        any requirement applicable to child care 
                        providers, that exceeds any requirement 
                        applicable under this title.
                    ``(D) Community grant procedures.--The plan shall 
                describe the standards and procedures to be applied in 
                the review and approval of community applications, and 
                in setting amounts, terms, and conditions of community 
                grants, including the methods to be used to ensure that 
                no less than 70 percent of grant funds are awarded to 
                low-income communities.
                    ``(E) Community participation in planning and 
                monitoring.--The plan shall describe the methods to be 
                used to ensure participation, in planning and 
                monitoring activities under the community plan, of 
                representatives of concerned elements of the community, 
                including parents of young children, child care 
                providers, child development professionals, early 
                intervention specialists, health care providers, public 
                school representatives, local interagency coordinating 
                councils for children with disabilities, local 
                government, and business leaders.
                    ``(F) Program activities.--The plan shall specify 
                which of the allowable activities enumerated in 
                subsection (c) may be carried out under community 
                grants under the plan.
                    ``(G) Performance goals and measures.--The plan 
                shall specify--
                            ``(i) performance goals to be achieved and 
                        the performance measures to be used to assess 
                        progress toward such goals under the plan, 
                        which--
                                    ``(I) shall be developed pursuant 
                                to guidance provided by the Secretary 
                                and in consultation with local 
                                government authorities in accordance 
                                with section 658D(b)(2); and
                                    ``(II) shall be designed to improve 
                                child development through coordination 
                                with health care services; enhanced 
                                early learning environments; parental 
                                involvement; consumer education; and 
                                increased rates of accreditation by 
                                nationally recognized accreditation 
                                organizations;
                            ``(ii) interim benchmarks and interim and 
                        long term timetables, as appropriate, for 
                        achieving each goal; and
                            ``(iii) the steps to be taken by the State 
                        or grantees in accordance with guidance 
                        provided by the Secretary if the specified 
                        benchmarks are not achieved.
                    ``(H) Coordination with activities to improve the 
                quality of child care.--The State plan shall specify 
                the methods to be used to coordinate activities under 
                this section and section 658G(a), including 
                coordination of planning and of performance goals and 
                measures, in order to maximize the effectiveness of 
                both programs.
    ``(c) Allowable Activities.--A model states early learning program 
under a State plan under this section may provide for any or all of the 
following activities:
            ``(1) Information and resources.--
                    ``(A) Parenting education.--Provision of parenting 
                education, including use of or collaboration with Even 
                Start or similar programs, for parents of young 
                children by means including use of community-based 
                resource centers, family literacy programs with 
                parenting education components, collaboration with 
                early intervention and preschool providers of services 
                for children, public elementary schools, centers that 
                serve children with special health care needs or 
                disabilities and their families, and home visiting 
                programs.
                    ``(B) Information and referral.--Initiatives to 
                develop or increase the availability of consumer 
                education information and referral services and other 
                resources to assist parents to locate and assess the 
                quality of available child care services.
                    ``(C) Family child care networks.--Development of 
                support networks, information and referral services, 
                and other supportive services addressing needs of 
                family child care providers for access to such 
                resources as education, training, and community support 
                services.
            ``(2) Quality and availability.--
                    ``(A) Provider training.--Training of child care 
                personnel, which may include training in early 
                childhood development, early literacy, health, 
                nutrition, hygiene, first-aid and safety, best 
                practices for serving children with disabilities in 
                child care, and other appropriate matters.
                    ``(B) Improved staffing ratios.--Initiatives to 
                increase ratios of child care staff to children in care 
                and to reduce child care group sizes.
                    ``(C) Licensing and accreditation assistance.--
                Assistance to entities and individuals in meeting 
                applicable child care accreditation and licensing 
                requirements and in obtaining licensing or 
                accreditation.
                    ``(D) Health services.--Improving coordination of 
                child care with appropriate health services including 
                health and mental health consultations, hearing and 
                vision testing, and immunizations, by methods such as 
                co-location of health and child care services, 
                referrals of children in child care to health care 
                providers or screening services, and transfer of child 
                health records to public school at school entry. 
                Services under this subparagraph shall not include 
                direct provision of or payment for health care 
                services.
                    ``(E) Care for children with special needs.--
                Increasing the availability and quality of child care 
                for young children with special health care needs, 
                developmental delays, and disabilities; and 
                coordinating with early intervention and preschool 
                special education services.
                    ``(F) Salary and benefit enhancement.--Assistance 
                to child care programs to increase the quality and 
                continuity of care by retaining highly qualified child 
                care staff working directly with children through 
                enhanced compensation.
                    ``(G) Monitoring and technical assistance.--
                Technical assistance to grantees, and monitoring of 
                programs, assisted under this section. State 
                expenditures under this subparagraph shall not exceed a 
                percentage of total State expenditures for the program 
                under this section equal to 10 percent for each of 
                fiscal years 1999 through 2001, and 5 percent for 
                fiscal year 2002 and each succeeding fiscal year.
                    ``(H) Comprehensive background checks.--To pay 
                costs incurred to obtain comprehensive background 
                checks required by section 658T(b)(2)(B)(I),
                    ``(I) Small grant program.--Funding in the 
                aggregate amount of $1,000,000 or 5 percent of such 
                State's allotment, whichever is less, may be used to 
                make small grants to persons on a competitive basis, 
                established by the Secretary by rule, to be used for 
                improvments and startup costs (as defined by the 
                Secretary by rule) incurred to become eligible 
                childcare providers.''.
    (c) Annual Report.--Section 658K(a)(2) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858i(a)(2)) is 
amended--
            (1) by striking ``and'' at the end of subparagraph (D);
            (2) by striking the period at the end of subparagraph (E) 
        and inserting a semicolon; and
            (3) by inserting after and below subparagraph (E) the 
        following subparagraph:
                    ``(F) the model states early learning program under 
                section 658T, including--
                            ``(i) the number and average dollar amount 
                        of grants awarded;
                            ``(ii) the number, average dollar amount, 
                        and percentage of the total State award of such 
                        grants made to low-income communities;
                            ``(iii) the number of early learning 
                        programs;
                            ``(iv) the number of children served with 
                        special health care needs, disabilities or 
                        developmental delays;
                            ``(v) the number of early learning programs 
                        that assist children with special needs;
                            ``(vi) progress toward achievement of each 
                        performance goal, for each specific, 
                        quantifiable and measurable objective;
                            ``(vii) expenditures for each allowable 
                        activity listed in section 658T(c), total 
                        expenditures and, to the extent feasible, the 
                        volume or frequency of such activity and the 
                        average expenditure per unit of such activity; 
                        and
                            ``(viii) with respect to any allowable 
                        activity listed in section 658T(c) for which 
                        expenditures are made by the State both under 
                        section 658G(a) and under section 658T, the 
                        amount expended under each such section; and
                            ``(ix) such other data as the Secretary may 
                        require;.''.

                TITLE VI--STANDARDS ENFORCEMENT PROGRAM

SEC. 601. CHILD CARE STANDARDS ENFORCEMENT PROGRAM.

    (a) Establishment of Program.--Section 658G of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858e) is amended--
            (1) by inserting ``(a) Consumer Education.--'' before 
        ``A''; and
            (2) by adding at the end the following:
    ``(b) Child Care Standards Enforcement.--
            ``(1) State plan requirement.--In order to be eligible for 
        funds under section 658J(a)(2), a State shall include in its 
        plan under section 658E a child care standards enforcement 
        plan, with the following elements:
                    ``(A) Assessment of current enforcement program.--
                An assessment of state enforcement programs in effect 
                in fiscal year 1998 (or, if later, the base year as 
                defined in section 658B(b)(2)(E)(i)) by provider type, 
                including number of inspections, percentage of 
                providers inspected, and scope of inspection.
                    ``(B) Goals and measures for improving enforcement 
                programs.--A statement of goals to be achieved with 
                respect to increasing the number of annual inspections, 
                expansion of the scope or improvement of the quality of 
                inspections, or a combination thereof, and performance 
                measures to be used to assess progress toward such 
                goals by provider type.
                    ``(C) Enforcement improvement activities.--A 
                description of the activities to be carried out with 
                funds allotted to the State from amounts appropriated 
                under section 658B(b), which may include--
                            ``(i) initiatives to increase numbers of 
                        qualified staff engaged in licensing of child 
                        care providers and enforcement of licensing, 
                        health, safety, and other applicable standards;
                            ``(ii) increased monitoring and enforcement 
                        activities, including unannounced inspections;
                            ``(iii) development, and dissemination to 
                        the public, of information on health, safety 
                        and licensing violations, by provider; and
                            ``(iv) other activities designed to ensure 
                        provider compliance with applicable standards 
                        including coordination with section 658T(c)(2) 
                        activities under the early learning program 
                        such as licensing, accreditation, and 
                        monitoring of and technical assistance to 
                        grantees.
            ``(2) Supplementation of other funding.--The State plan 
        described in paragraph (1) shall contain assurances that 
        Federal funds provided to the State under this subsection will 
        not be used to supplant Federal or non-Federal funds for 
        existing services and activities that promote the purposes of 
        this subsection.''.
    (b) Authorization of Appropriations.--Section 658B of the Child 
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858) is 
amended--
            (1) by inserting ``(a) In General.--'' before ``There''; 
        and
            (2) by adding at the end the following:
    ``(b) Child Care Standards Enforcement.--
            ``(1) Appropriation.--There is authorized to be 
        appropriated to carry out section 658G(b) $100,000,000 for each 
        of fiscal years 1999 through 2003.
            ``(2) Allocation of appropriations.--Amounts appropriated 
        for each fiscal year pursuant to paragraph (1) shall be 
        allocated among States (as defined in section 658O) as follows:
                    ``(A) Basic grant.--The Secretary shall allocate to 
                States, in accordance with the formula set forth in 
                section 658O--
                            ``(i) the amount appropriated under this 
                        section for fiscal year 1999, and
                            ``(ii) the first $75,000,000 of such 
                        appropriations (or, if less, the total amount 
                        appropriated) for each of fiscal years 2000, 
                        2001, and 2002.
                    ``(B) Supplement to achieve $1 million grant.--From 
                the amount (if any) remaining after application of 
                subparagraph (A), the Secretary shall allocate to each 
                State that received an allocation of less than 
                $1,000,000 under subparagraph (A) the lesser of--
                            ``(i) the difference between such 
                        allocation and $1,000,000, or
                            ``(ii) an amount bearing the same ratio to 
                        the amount remaining for allocation under this 
                        subparagraph as the difference determined for 
                        such State under clause (i) bears to the sum of 
                        such differences, as so determined, for all 
                        States described in this subparagraph.
                    ``(C) Performance bonuses.--
                            ``(i) In general.--From the amount (if any) 
                        of the appropriation under paragraph (1) for 
                        each fiscal year remaining after application of 
                        subparagraphs (A) and (B), the Secretary shall 
                        allocate in accordance with the formula set 
                        forth in section 658O, to each State that has 
                        achieved in the preceding fiscal year either 
                        the inspection rate or the inspection change 
                        percentage specified in clause (ii) the lesser 
                        of--
                                    ``(I) 20 percent of the State's 
                                allocation under subparagraph (A); or
                                    ``(II) an amount bearing the same 
                                ratio to the amount available for 
                                allocation under this subparagraph as 
                                the amount determined for such State 
                                under subclause (I) bears to the sum of 
                                such amounts, as so determined, for all 
                                States described in this subparagraph.
                            ``(ii) Performance targets.--For purposes 
                        of clause (i)--
                                    ``(I) the inspection rate shall be 
                                not less than 75 percent for fiscal 
                                year 1999, 85 percent for fiscal year 
                                2000, and 95 percent for fiscal year 
                                2001; and
                            ``(II) the inspection change percentage 
                        shall be not less than 110 for fiscal year 
                        1999, 115 for fiscal year 2000, and 125 for 
                        fiscal year 2001.
                    ``(D) Remainder.--Amounts not allocated under 
                subparagraphs (A), (B), and (C) shall remain available 
                for allocation for the succeeding fiscal year in 
                accordance with this subsection.
                    ``(E) Definitions.--For the purposes of this 
                paragraph the follow definitions apply--
                            ``(i) `base year', with respect to a State, 
                        means the fiscal year preceding the first 
                        fiscal year for which the State seeks funding 
                        under section 658J(a)(2);
                            ``(ii) `inspection change percentage' 
                        means, with respect to a fiscal year, the ratio 
                        of the number of child care facilities and 
                        providers in a State that were inspected in 
                        such fiscal year to the number of such 
                        facilities and providers that were inspected in 
                        the base year expressed as a percentage; and
                            ``(iii) `inspection rate' means the ratio 
                        of the number of child care facilities or 
                        providers receiving at least one inspection 
                        during a fiscal year to the total number of 
                        facilities or providers in operation in the 
                        State during that fiscal year.''.
    (c) Payments.--Section 658J(a) of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858h(a)) is amended--
            (1) by striking ``(a) In General.--Subject to the 
        availability of appropriations'' and inserting the following:
    ``(a) Basic Grant.--A State--
            ``(1) In general.--''; and
            (2) by adding at the end the following:
            ``(2) Child care standards enforcement program.--A State 
        described in paragraph (1) whose plan under section 658E 
        provides for child care standards enforcement under section 
        658G(b) shall be entitled to payment under this section in an 
        amount equal to the lesser of its expenditures or allotment for 
        such purpose under section 658O.''.
    (d) Annual Report.--Section 658K(a)(2) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858(i)(A)(2)), as 
amended by section 501(c), is amended by inserting after subparagraph 
(F) the following:
                    ``(G) enforcement of child care quality and safety 
                standards, including data, by type of provider, on--
                            ``(i) the number and percentage of 
                        facilities or providers inspected (and the 
                        number and percentage of facilities or 
                        providers receiving more than one inspection) 
                        and a comparison to the prior year's inspection 
                        rate;
                            ``(ii) the numbers and types of 
                        deficiencies identified (and the numbers of 
                        serious deficiencies presenting risks to health 
                        or safety);
                            ``(iii) the number of deficiencies remedied 
                        upon subsequent inspection, by type of 
                        deficiency; and
                            ``(iv) such other data as the Secretary may 
                        require; and.''.

           TITLE VII--CHILD CARE PROVIDER SCHOLARSHIP PROGRAM

SEC. 701. NATIONAL CHILD CARE PROVIDER SCHOLARSHIP PROGRAM.

    (a) Establishment of Program.--Section 658G of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858e), as amended by 
section 601(a), is amended by adding at the end the following:
    ``(c) Child Care Provider Scholarship Program.--
            ``(1) State plan requirement.--In order to be eligible for 
        funds under section 658J(a)(3), a State shall include in its 
        plan under section 658E a child care provider scholarship 
        program plan, meeting the requirements of this subsection, 
        designed to further the goals of child care provider 
        recruitment, training, credentialing, and retention.
            ``(2) Eligibility criteria for scholarship applicants.--The 
        State plan shall provide that, in order for an individual to be 
        eligible for a scholarship grant under this subsection, the 
        following requirements shall be met:
                    ``(A) Demonstrated commitment to child care 
                career.--The individual--
                            ``(i) must be a child care worker who is 
                        (or is employed by) a licensed or registered 
                        child care provider, or has a commitment for 
                        employment from a licensed or registered child 
                        care provider; and
                            ``(ii) must agree in writing to continue to 
                        be employed in the field of child care for at 
                        least one year after receiving the training for 
                        which assistance is provided.
                    ``(B) Cost sharing by applicant.--
                            ``(i) In general.--The individual (either 
                        as provided in clause (ii) or otherwise) will 
                        provide funds for payment of a share of the 
                        cost of the education or training.
                            ``(ii) Application for pell grants.--In the 
                        case of an application for a scholarship 
                        intended for use in an educational institution 
                        participating in the Pell Grant program under 
                        title IV of the Higher Education Act, the 
                        individual shall apply for a grant under such 
                        program for which the individual is eligible.
                    ``(C) Employer requirements.--In the case of an 
                individual employed by (or who has a commitment for 
                employment from) a licensed or registered child care 
                provider--
                            ``(i) Cost sharing.--The individual's 
                        employer must pay a share of the cost of the 
                        education or training.
                            ``(ii) Employment and remuneration.--The 
                        individual's employer must agree to provide 
                        increased financial incentives to the 
                        individual, such as a salary increase or bonus, 
                        when the individual completes the education or 
                        training.
            ``(3) Qualifying educational institutions.--The State plan 
        shall specify the types of educational and training programs 
        for which scholarships granted under the State program may be 
        used, which shall be limited to (but may include any or all) 
        programs that--
                    ``(A) are administered by institutions of higher 
                education that are eligible to participate in student 
                financial assistance programs under title IV of the 
                Higher Education Act of 1965; and
                    ``(B) that lead to a State or national credential 
                in child care or early childhood or early childhood 
                special education, or to an associate or bachelor's 
                degree in child development or early childhood 
                education.
            ``(4) Annual maximum scholarship grant amount.--The maximum 
        amount of a scholarship awarded to an eligible individual under 
        this section shall not exceed $1,500 per year.
            ``(5) Supplementation of other funding.--The State plan 
        shall contain assurances that Federal funds provided to the 
        State under this subsection will not be used to supplant 
        Federal or non-Federal funds for existing services and 
        activities that promote the purposes of this subsection.''.
    (b) Authorization of Appropriations.--Section 658B of the Child 
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858), as 
amended by section 601(b), is amended by adding at the end the 
following:
    ``(c) Child Care Provider Scholarship Program.--There is authorized 
to be appropriated to carry out section 658G(c) $50,000,000 for each of 
fiscal years 1999 through 2003.''.
    (c) Allotment.--Section 658O of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858m) is amended--
            (1) in subsection (a)(1), by striking ``this subchapter'' 
        and inserting ``each subsection of section 658B'';
            (2) in subsection (a)(2), by striking ``section 658B'' and 
        inserting ``section 658B(a)'';
            (3) in subsection (b)(1), in the matter preceding 
        subparagraph (A), by inserting ``each subsection of'' before 
        ``section 658B''; and
            (4) in subsection (e)(1), by striking ``the allotment under 
        subsection (b)'' and inserting ``an allotment under subsection 
        (b)''.
    (d) Payments.--Section 658J(a) of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858h), as amended by section 
601(c), is amended by adding at the end the following:
            ``(3) Child care scholarship program.--A State described in 
        paragraph (1) whose plan under section 658E provides for a 
        child care scholarship program under section 658G(c) shall be 
        entitled to payment under this section in an amount equal to 
        the lesser of its allotment under section 658O or 80 percent of 
        expenditures by the State for such program.''.
    (e) Annual Report.--Section 658K(a)(2) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858i), as amended by 
section 601(d), is amended by inserting after subparagraph (G) the 
following:
                    ``(H) the child care scholarship program, 
                including--
                            ``(i) the number of child care workers 
                        receiving scholarship grants;
                            ``(ii) the amount of each scholarship 
                        grant;
                            ``(iii) the number of course credits or 
                        credentials completed by individuals receiving 
                        scholarships;
                            ``(iv) the number and percentage of child 
                        care workers receiving scholarship grants in 
                        the previous year who fulfilled their one-year 
                        commitment; and
                            ``(v) such other data as the Secretary may 
                        require.''

             TITLE VIII--RESEARCH AND DEMONSTRATION PROGRAM

SEC. 801. RESEARCH AND DEMONSTRATIONS.

    (a) Establishment of Research and Demonstration Activities.--The 
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et 
seq.) is amended by adding at the end the following:

``SEC. 658U. RESEARCH AND DEMONSTRATIONS.

    ``(a) In General.--The Secretary is authorized, either directly or 
through grants, contracts, cooperative agreements, or other 
arrangements, to carry out research, demonstration projects, and other 
activities relating to child care, including activities designed to 
improve the quality and increase the availability of child care. Such 
activities shall be coordinated with activities under the Department of 
Education's Office of Educational Research and Improvement.
    ``(b) Allowable Activities.--Activities under this section may 
include the following:
            ``(1) Research on child care needs of low-income 
        families.--Research designed to identify and overcome barriers 
        restricting availability, affordability, and quality of child 
        care for low-income families.
            ``(2) Research on good policies and practices.--Research 
        designed to identify good child care policies and practices, 
        including the types of child care settings, parent activities, 
        and provider training that most benefit the early development 
        of children.
            ``(3) Research on retention of child care provider staff.--
        Research on factors affecting retention of child care provider 
        staff, including the National Child Care Provider Scholarship 
        Program under section 658G(b) and its subsequent effect on 
        outcomes for children.
            ``(4) Demonstrations of technology-based education and 
        training.--Demonstration projects testing use of remote site 
        and interactive computer technology to provide education and 
        training to child care providers and parents.
            ``(5) Demonstration projects for new methods.--
        Demonstration projects addressing ways to assist parents, such 
        as parents who choose to stay at home with their children and 
        parents with particular child care needs, including parents of 
        children with special health care needs or disabilities, 
        homeless families, migrant families, teen parents and foster 
        parents.
            ``(6) National center on child care statistics.--
        Establishment and operation of a National Center on Child Care 
        Statistics for the collection and dissemination of data and 
        information on child care.
            ``(7) Hotline and consumer education.--Establishment and 
        operation of a hotline to assist parents to locate their local 
        child care resource and referral agency and public education 
        activities to assist parents in becoming informed consumers of 
        quality child care.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $30,000,000 for each of fiscal 
years 1999 through 2003.''.
    (b) Report to Congress.--Section 658L of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858j) is amended by 
inserting ``and progress on development of research and demonstration 
projects as carried out under section 658U'' after ``under section 
658K''.

                        TITLE IX--MISCELLANEOUS

                Subtitle A--Child and Adult Food Program

SEC. 901. REVISION OF REIMBURSEMENT RATES FOR FAMILY OR GROUP DAY CARE 
              HOMES UNDER THE CHILD AND ADULT CARE FOOD PROGRAM UNDER 
              THE NATIONAL SCHOOL LUNCH ACT.

    Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 
1766(f)(3)) is amended--
            (1) in subparagraph (A)(iii)(I)--
                    (A) in division (aa), by striking ``95 cents for 
                lunches and suppers, 27 cents for breakfasts, and 13 
                cents for supplements'' and inserting ``$1.03 for 
                lunches and suppers, 38 cents for breakfasts, and 18 
                cents for supplements''; and
                    (B) in division (bb), by striking ``1997'' and 
                inserting ``1998''; and
            (2) in the second sentence of subparagraph (B), by 
        inserting after ``Such levels'' the following: ``shall be those 
        levels in effect on June 30, 1998, increased by $2.00 per home 
        and''.

     Subtitle B--Mortgage Insurance for Child Care and Development 
                               Facilities

SEC. 951. SHORT TITLE.

    This subtitle may be cited as the ``Children's Development 
Commission Act''.

SEC. 952. CONGRESSIONAL FINDINGS.

    The Congress finds the following:
            (1) The need for quality nursery schools, both full-time 
        and part-time child care centers and after-school programs, 
        after school programs, neighborhood-run mothers-day-out 
        programs, and family child care providers has grown among 
        working parents, and parents who stay at home, who want their 
        children to have access to early childhood education.
            (2) All parents should have access to safe, stimulating, 
        and educational early childhood education programs for their 
        children, whether such programs are carried out in a child care 
        center, a part-time nursery school (including a nursery school 
        operated by a religious organization), or a certified child 
        care provider's home.
            (3) The number of available enrollment opportunities for 
        children to receive quality child care services is not meeting 
        the demand for such services.
            (4) In 1995 there were about 21,000,000 children less than 
        6 years of age, of whom 31 percent were participating in 
        center-based child care services and 14 percent were receiving 
        child care in homes. Between 1992 and 2005 the participation of 
        women 24 to 54 years of age in the labor force is projected to 
        increase from 75 percent to 83 percent.
            (5) In States that have set up a mechanism to provide 
        capital improvements for child care facilities, the demand for 
        services of such facilities still has not been met.
            (6) The United States is behind other western, 
        industrialized countries when it comes to providing child care 
        services. In France, almost 100 percent of all children 3 to 5 
        years of age attend nursery school. In Germany this number is 
        65 to 70 percent. In Japan 90 percent of such children attend 
        some form of preschool care. In all of these countries early 
        childhood care has proven to increase children's development 
        and performance.

SEC. 953. INSURANCE FOR MORTGAGES ON NEW AND REHABILITATED CHILD CARE 
              AND DEVELOPMENT FACILITIES.

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

     ``mortgage insurance for child care and development facilities

    ``Sec. 257. (a) Purpose.--The purpose of this section is to 
facilitate and assist in the provision and development of licensed 
child care and development facilities.
    ``(b) General Insurance Authority.--The Secretary may insure 
mortgages (including advances on such mortgages during construction) in 
accordance with the provisions of this section and upon such terms and 
conditions as the Secretary may prescribe and may make commitments for 
insurance of such mortgages before the date of their execution or 
disbursement thereon.
    ``(c) Eligible Mortgages.--To carry out the purpose of this 
section, the Secretary may insure any mortgage that covers a new child 
care and development facility, including a new addition to an existing 
child care and development facility (regardless of whether the existing 
facility is being rehabilitated), or a substantially rehabilitated 
child care and development facility, including equipment to be used in 
the operation of the facility, subject to the following conditions:
            ``(1) Approved mortgagor.--The mortgage shall be executed 
        by a mortgagor approved by the Secretary. The Secretary may, in 
        the discretion of the Secretary, require any such mortgagor to 
        be regulated or restricted as to charges and methods of 
        financing and, if the mortgagor is a corporate entity, as to 
        capital structure and rate of return. As an aid to the 
        regulation or restriction of any mortgagor with respect to any 
        of the foregoing matters, the Secretary may make such contracts 
        with and acquire for not more than $100 such stock or interest 
        in such mortgagor as the Secretary may consider necessary. Any 
stock or interest so purchased shall be paid for out of the General 
Insurance Fund, and shall be redeemed by the mortgagor at par upon the 
termination of all obligations of the Secretary under the insurance.
            ``(2) Principal obligation.--The mortgage shall involve a 
        principal obligation in an amount not to exceed 90 percent of 
        the estimated value of the property or project, or 95 percent 
        of the estimated value of the property or project in the case 
        of a mortgagor that is a private nonprofit corporation or 
        association (as such term is defined pursuant to section 
        221(d)(3)), including--
                    ``(A) equipment to be used in the operation of the 
                facility when the proposed improvements are completed 
                and the equipment is installed; or
                    ``(B) a solar energy system (as defined in 
                subparagraph (3) of the last paragraph of section 2(a)) 
                or residential energy conservation measures (as defined 
                in subparagraphs (A) through (G) and (I) of section 
                210(11) of the National Energy Conservation Policy 
                Act), in cases in which the Secretary determines that 
                such measures are in addition to those required under 
                the minimum property standards and will be cost-
                effective over the life of the measure.
            ``(3) Amortization and interest.--The mortgage shall--
                    ``(A) provide for complete amortization by periodic 
                payments under such terms as the Secretary shall 
                prescribe;
                    ``(B) have a maturity satisfactory to the 
                Secretary, but in no event longer than 25 years; and
                    ``(C) bear interest at such rate as may be agreed 
                upon by the mortgagor and the mortgagee, and the 
                Secretary shall not issue any regulations or establish 
                any terms or conditions that interfere with the ability 
                of the mortgagor and mortgagee to determine the 
                interest rate.
    ``(d) Certification by Children's Development Commission.--The 
Secretary may not insure a mortgage under this section unless the 
Children's Development Commission established under section 258 
certifies that the facility is in compliance, or will be in compliance 
not later than 12 months after such certification, with--
            ``(1) any laws, standards, and requirements applicable to 
        such facilities under the laws of the State, municipality, or 
        other unit of general local government in which the facility is 
        or is to be located; and
            ``(2) after the effective date of the standards and 
        requirements established under section 258(c)(2), such 
        standards and requirements.
    ``(e) Release.--The Secretary may consent to the release of a part 
or parts of the mortgaged property or project from the lien of any 
mortgage insured under this section upon such terms and conditions as 
the Secretary may prescribe.
    ``(f) Mortgage Insurance Terms.--The provisions of subsections (d), 
(e), (g), (h), (i), (j), (k), (l), and (n) of section 207 shall apply 
to mortgages insured under this section, except that all references in 
such subsections to section 207 shall be considered, for purposes of 
mortgage insurance under this section, to refer to this section.
    ``(g) Mortgage Insurance for Fire Safety Equipment Loans.--
            ``(1) Authority.--The Secretary may, upon such terms and 
        condition as the Secretary may prescribe, make commitments to 
        insure and insure loans made by financial institutions or other 
        approved mortgagees to child care and development facilities to 
        provide for the purchase and installation of fire safety 
        equipment necessary for compliance with the 1967 edition of the 
        Life Safety Code of the National Fire Protection Association 
        (or any subsequent edition specified by the Secretary of Health 
        and Human Services).
            ``(2) Loan requirements.--To be eligible for insurance 
        under this subsection a loan shall--
                    ``(A) not exceed the Secretary's estimate of the 
                reasonable cost of the equipment fully installed;
                    ``(B) bear interest at such rate as may be agreed 
                upon by the mortgagor and the mortgagee;
                    ``(C) have a maturity satisfactory to the 
                Secretary;
                    ``(D) be made by a financial institution or other 
                mortgagee approved by the Secretary as eligible for 
                insurance under section 2 or a mortgagee approved under 
                section 203(b)(1);
                    ``(E) comply with other such terms, conditions, and 
                restrictions as the Secretary may prescribe; and
                    ``(F) be made with respect to a child care and 
                development facility that complies with the requirement 
                under subsection (d).
            ``(3) Insurance requirements.--The provisions of paragraphs 
        (5), (6), (7), (9), and (10) of section 220(h) shall apply to 
        loans insured under this subsection, except that all references 
        in such paragraphs to home improvement loans shall be 
        considered, for purposes of this subsection, to refer to loans 
        under this subsection. The provisions of subsections (c), (d), 
        and (h) of section 2 shall apply to loans insured under this 
        subsection, except that all references in such subsections to 
        `this section' or `this title' shall be considered, for 
        purposes of this subsection, to refer to this subsection.
    ``(h) Schedules and Deadlines.--The Secretary shall establish 
schedules and deadlines for the processing and approval (or provision 
of notice of disapproval) of applications for mortgage insurance under 
this section.
    ``(i) Definitions.--For the purposes of this section, the following 
definitions shall apply:
            ``(1) Child care and development facility.--The term `child 
        care and development facility' means a public facility, 
        proprietary facility, or facility of a private nonprofit 
        corporation or association that--
                    ``(A) has as its purpose the care and development 
                of children less than 12 years of age; and
                    ``(B) is licensed or regulated by the State in 
                which it is located (or, if there is no State law 
                providing for such licensing and regulation by the 
                State, by the municipality or other political 
                subdivision in which the facility is located).
        The term does not include facilities for school-age children 
        primarily for use during normal school hours. The term includes 
        facilities for training individuals to provide child care and 
        development services.
            ``(2) Equipment.--The term `equipment' includes machinery, 
        utilities, and built-in equipment and any necessary enclosures 
        or structures to house them, and any other items necessary for 
        the functioning of a particular facility as a child care and 
        development facility, including necessary furniture. Such term 
        includes books, curricular, and program materials.
            ``(3) Mortgage; first mortgage; mortgagee.--The term 
        `mortgage' means a first mortgage on real estate in fee simple, 
        or on the interest of either the lessor or lessee thereof under 
        a lease having a period of not less than 7 years to run beyond 
        the maturity date of the mortgage. The term `first mortgage' 
        means such classes of first liens as are commonly given to 
        secure advances (including advances during construction) on, or 
        the unpaid purchase price of, real estate under the laws of the 
        State in which the real estate is located, together with the 
        credit instrument or instruments (if any) secured thereby, and 
        any mortgage may be in the form of one or more trust mortgages 
        or mortgage indentures or deeds of trust, securing notes, 
        bonds, or other credit instruments, and, by the same instrument 
        or by a separate instrument, may create a security interest in 
        initial equipment, whether or not attached to the realty. The 
        term `mortgagor' has the meaning given the term in section 
        207(a).
    ``(j) Limitation on Insurance Authority.--
            ``(1) Termination.--No mortgage may be insured under this 
        section or section 223(h) after September 30, 2005, except 
        pursuant to a commitment to insure issued on or before such 
        date.
            ``(2) Aggregate principal amount limitation.--The aggregate 
        principal amount of mortgages for which the Secretary enters 
        into commitments to insure under this section or section 223(h) 
        on or before the date under paragraph (1) may not exceed 
        $2,000,000,000. If, upon the date under paragraph (1), the 
        aggregate insurance authority provided under this paragraph has 
        not been fully used, the Secretary of the Treasury shall submit 
        a report to the Congress evaluating the need for continued 
        mortgage insurance under this section.''.
    ``(k) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this section. In issuing such regulations, the 
Secretary shall consult with the Secretary of Health and Human Services 
with respect to any aspects of the regulations regarding child care and 
development facilities.''.

SEC. 954. INSURANCE FOR MORTGAGES FOR ACQUISITION OR REFINANCING DEBT 
              OF EXISTING CHILD CARE AND DEVELOPMENT FACILITIES.

    Section 223 of the National Housing Act (12 U.S.C. 1715n) is 
amended by adding at the end the following new subsection:
    ``(h) Mortgage Insurance for Purchase or Refinancing of Existing 
Child Care and Development Facilities.--
            ``(1) Authority.--Notwithstanding any other provision of 
        this Act, the Secretary may insure under any section of this 
        title a mortgage executed in connection with the purchase or 
refinancing of an existing child care and development facility, the 
purchase of a structure to serve as a child care and development 
facility, or the refinancing of existing debt of an existing child care 
and development facility.
            ``(2) Purchase of existing facilities and structures.--In 
        the case of the purchase under this subsection of an existing 
        child care and development facility or purchase of an existing 
        structure to serve as such a facility, the Secretary shall 
        prescribe any terms and conditions that the Secretary considers 
        necessary to ensure that--
                    ``(A) the facility or structure purchased continues 
                to be used as a child care and development facility; 
                and
                    ``(B) the facility complies with the same 
                requirements applicable under subsections (d) and (e) 
                of section 257 to facilities having mortgages insured 
                under such section.
            ``(3) Refinancing of existing facilities.--In the case of 
        refinancing of an existing child care and development facility, 
        the Secretary shall prescribe any terms and conditions that the 
        Secretary considers necessary to ensure that--
                    ``(A) the refinancing is used to lower the monthly 
                debt service costs (taking into account any fees or 
                charges connected with such refinancing) of the 
                existing facility;
                    ``(B) the proceeds of any refinancing will be 
                employed only to retire the existing indebtedness and 
                pay the necessary cost of refinancing on the existing 
                facility;
                    ``(C) the existing facility is economically viable; 
                and
                    ``(D) the facility complies with the same 
                requirements applicable under section 257(d) to 
                facilities having mortgages insured under such section.
            ``(4) Definitions.--For purposes of this subsection, the 
        terms defined in section 257(i) shall have the same meanings as 
        provided under such section.
            ``(5) Limitation on insurance authority.--The authority of 
        the Secretary to enter into commitments to insure mortgages 
        under this subsection is subject to the limitations under 
        section 257(j).''.

SEC. 955. CHILDREN'S DEVELOPMENT COMMISSION.

    Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is 
amended by adding at the end (after section 257, as added by section 
953 of this Act) the following new section:

                  ``children's development commission

    ``Sec. 258. (a) Establishment.--There is hereby established a 
commission to be known as the Children's Development Commission.
    ``(b) Membership.--
            ``(1) Appointment.--The Commission shall be composed of 7 
        members appointed by the President, not later than the 
        expiration of the 3-month period beginning upon the enactment 
        of this section, by and with the advice and consent of the 
        Senate, as follows:
                    ``(A) 1 member shall be appointed from among 3 
                individuals recommended by the Secretary of Housing and 
                Urban Development or the Secretary's designee.
                    ``(B) 1 member shall be appointed from among 3 
                individuals recommended by the Secretary of Health and 
                Human Services or the Secretary's designee.
                    ``(C) 1 member shall be appointed from among 3 
                individuals recommended by the Secretary of the 
                Treasury or the Secretary's designee.
                    ``(D) 4 members shall be appointed from among 12 
                individuals recommended jointly by the Speaker of the 
                House of Representatives, the Majority Leader of the 
                Senate, Minority Leader of the House of 
                Representatives, the Minority Leader of the Senate.
            ``(2) Qualifications of congressionally recommended 
        members.--Of the members appointed under paragraph (1)(D)--
                    ``(A) each shall be an individual who actively 
                participates or is employed in the field of child care 
                and has academic, licensing, or other credentials 
                relating to such participation or employment; and
                    ``(B) not more than 2 may be of the same political 
                party.
            ``(3) Terms.--Each appointed member of the Commission shall 
        serve for a term of 3 years.
            ``(4) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
member's predecessor was appointed shall be appointed only for the 
remainder of that term. A member may serve after the expiration of that 
member's term until a successor has taken office. A vacancy in the 
Commission shall be filled in the manner in which the original 
appointment was made.
            ``(5) Chairperson.--The chairperson of the Commission shall 
        be designated by the President at the time of appointment.
            ``(6) Quorum.--A majority of the members of the Commission 
        shall constitute a quorum for the transaction of business.
            ``(7) Voting.--Each member of the Commission shall be 
        entitled to 1 vote, which shall be equal to the vote of every 
        other member of the Commission.
            ``(8) Prohibition on additional pay.--Members of the 
        Commission shall serve without compensation, but shall be 
        reimbursed for travel, subsistence, and other necessary 
        expenses incurred in the performance of their duties as members 
        of the Commission.
    ``(c) Functions.--The Commission shall carry out the following 
functions:
            ``(1) Certification of compliance.--The Commission shall 
        collect such information and make such determinations as may be 
        necessary to determine, for purposes of section 257(d), whether 
        child care and development facilities comply, or will be in 
        compliance within 12 months, with--
                    ``(A) any laws, standards, and requirements 
                applicable to such facilities under the laws of the 
                State, municipality, or other unit of general local 
                government in which the facility is or is to be 
                located, and
                    ``(B) after the effective date of the standards and 
                requirements established under paragraph (2), such 
                standards and requirements,
        and shall issue certifications of such compliance.
            ``(2) Establishment of standards.--
                    ``(A) Study.--Not later than 12 months after the 
                date on which appointment of initial membership of the 
                Commission is completed, the Commission, in 
                consultation with the Secretary of Housing and Urban 
                Development and the Secretary of Health and Human 
                Services, shall conduct a study to determine the laws, 
                standards, and requirements referred to in paragraph 
                (1)(A) that are applicable in each State. Taking into 
                consideration the findings of the study, the Secretary 
                shall establish standards and requirements regarding 
                child care and development facilities that are designed 
                to ensure that mortgage insurance is provided under 
                section 257 and section 223(h) only for safe, clean, 
                and healthy facilities that provide appropriate care 
                and development services for children.
                    ``(B) Publication.--The Commission shall issue 
                regulations providing for the standards and 
                requirements established under subparagraph (A) to take 
                effect, for purposes of sections 257(d)(2) and 
                223(h)(2)(B) and paragraph (1)(B) of this section, not 
                later than 18 months after the date of the enactment of 
                this section.
            ``(3) Small purpose loans.--The Commission shall, to the 
        extent amounts are made available for such purpose pursuant to 
        subsection (i) and qualified requests are received, make loans, 
        directly or indirectly to providers of child care and 
        development facilities for reconstruction or renovation of such 
        facilities, subject to the following requirements:
                    ``(A) Loans under this paragraph shall be made only 
                for such facilities that are financially and 
                operationally viable, as determined under standards and 
                guidelines to be established by the Commission.
                    ``(B) The aggregate amount of loans made under this 
                paragraph to a single borrower may not exceed $50,000.
                    ``(C) A loan made under this paragraph may not have 
                a term to maturity exceeding 7 years.
                    ``(D) Loans under this paragraph shall bear 
                interest at rates and be made under such other 
                conditions and terms as the Commission shall provide.
            ``(4) Notification.--The Commission shall take such actions 
        as may be necessary to publicize the availability of the 
        programs for mortgage insurance under sections 257 and 223(h) 
        and loans under paragraph (3) of this subsection in a manner 
        that ensures that information concerning such programs will be 
        available to child care providers throughout the United States.
            ``(5) Liability insurance.--Not later than 12 months after 
        the date on which appointment of initial membership of the 
        Commission is completed, the Commission shall establish 
        standards and guidelines, applicable to mortgage insurance 
        under sections 257 and 223(h) and loans under paragraph (3) of 
        this subsection, requiring child care providers operating child 
        care and development facilities assisted under such provisions 
        to obtain and maintain liability insurance in such amounts and 
        subject to such requirements as the Commission considers 
        appropriate.
            ``(6) Research foundation.--Not later than 12 months after 
        the date of the enactment of this section, the Commission shall 
        submit a report to the Congress recommending a plan for 
        establishing and funding a foundation that is an entity 
        independent of the Commission (but which maintains association 
with the Commission), the purpose of which shall be--
                    ``(A) to support research relating to child care 
                and development facilities;
                    ``(B) to fund pilot programs to test innovative 
                methods for improving child care; and
                    ``(C) to engage in activities and publish materials 
                to assist persons interested in mortgage insurance 
                under sections 257 and 223(h) and other assistance 
                provided by the Commission.
    ``(d) Nondiscrimination Requirement.--
            ``(1) In general.--The Commission may not certify under 
        subsection (c)(1) or carry out any activities of the Commission 
        with respect to any child care and development facility if the 
        provider of the facility discriminates on account of race, 
        color, religion (subject to paragraph (2)), national origin, 
        sex (to the extent provided in title IX of the Education 
        Amendments of 1972 (20 U.S.C. 1681 et seq.)), or handicapping 
        condition.
            ``(2) Facilities of religious organizations.--The 
        prohibition with respect to religion shall not apply to a child 
        care and development facility which is controlled by or which 
        is closely identified with the tenets of a particular religious 
        organization if the application of this subsection would not be 
        consistent with the religious tenets of such organization.
            ``(3) Certification.--As a condition of certification under 
        subsection (c)(1) and eligibility for a loan under subsection 
        (c)(3), the provider of a child care and development facility 
        shall certify to the Commission that the provider does not 
        discriminate, as required by the provisions of paragraph (1) of 
        this subsection.
    ``(e) Powers.--
            ``(1) Assistance from federal agencies.--The Commission may 
        secure directly from any department or agency of the Federal 
        Government such information as the Commission may require for 
        carrying out its functions. Upon request of the Commission, any 
        such department or agency shall furnish such information.
            ``(2) Assistance from general services administration.--The 
        Administrator of General Services shall provide to the 
        Commission, on a reimbursable basis, such administrative 
        support services as the Commission may request.
            ``(3) Assistance from department of housing and urban 
        development.--Upon the request of the Commission, the Secretary 
        of Housing and Urban Development shall, to the extent possible 
        and subject to the discretion of the Secretary, detail any of 
        the personnel of the Department of Housing and Urban 
        Development, on a nonreimbursable basis, to assist the 
        Commission in carrying out its functions under this section.
            ``(4) Mails.--The Commission may use the United States 
        mails in the same manner and under the same conditions as other 
        Federal agencies.
    ``(f) Staff.--
            ``(1) Executive director.--The Commission shall appoint an 
        executive director of the Board, who shall be compensated at a 
        rate fixed by the Commission, but which shall not exceed the 
        rate established for level I of the Executive Schedule under 
        title 5, United States Code.
            ``(2) Other personnel.--In addition to the executive 
        director, the Commission may appoint and fix the compensation 
        of such personnel as the Commission considers necessary, in 
        accordance with the provisions of title 5, United States Code, 
        governing appointments to the competitive service, and the 
        provisions of chapter 51 and subchapter III of chapter 53 of 
        such title, relating to classification and General Schedule pay 
        rates.
    ``(g) Reports.--Not later than March 31 of each year, the 
Commission shall submit a report to the President and the Congress 
regarding the operations and activities of the Commission during the 
preceding calendar year. Each annual report shall include a copy of the 
Commission's financial statements and such information and other 
evidence as is necessary to demonstrate that the activities of the 
Commission during the year for which the report is made. The Commission 
may also submit reports to the Congress and President at such other 
times as the Commission deems desirable.
    ``(h) Definitions.--For purposes of this section, the terms defined 
in section 257(i) shall have the same meanings as provided under such 
section.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Commission to carry out this section $10,000,000 
for fiscal year 1999, to remain available until expended, of which not 
more than $2,500,000 shall be available for administrative costs of the 
Commission and the remainder of which shall be available only for loans 
under subsection (c)(3).''.

SEC. 956. STUDY OF AVAILABILITY OF SECONDARY MARKETS FOR MORTGAGES ON 
              CHILD CARE FACILITIES.

    The Secretary of the Treasury shall conduct a study of the 
secondary mortgage markets to determine--
            (1) whether such a market exists for purchase of mortgages 
        eligible for insurance under sections 223(h) and 257 of the 
        National Housing Act (as added by this Act);
            (2) whether such a market would affect the availability of 
        credit available for development of child care and development 
        facilities or would lower development costs of such facilities; 
        and
            (3) the extent to which such a market or other activities 
        to provide credit enhancement for child care and development 
        facilities loans is needed to meet the demand for such 
        facilities.
The Secretary of the Treasury shall submit to the Congress a report 
regarding the results of the study conducted under this section not 
later than the expiration of the 2-year period beginning on the date of 
the enactment of this Act.

                   Subtitle C--Sense of the Congress

SEC. 971. SENSE OF THE CONGRESS.

    It is the sense of the Congress that funds should be appropriated 
pursuant to this Act, to the maximum extent authorized and consistently 
with achieving a balanced Federal budget.
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