[Congressional Record Volume 143, Number 102 (Thursday, July 17, 1997)]
[Senate]
[Pages S7719-S7732]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

       By Mr. JEFFORDS (for himself, Mr. Dodd, and Mr. Enzi):
  S. 1037. A bill to amend the Internal Revenue Code of 1986 to 
establish incentives to increase the demand for and supply of quality 
child care, to provide incentives to States that improve the quality of 
child care, to expand clearing-house and electronic networks for the 
distribution of child care information, to improve the quality of child 
care provided through Federal facilities and programs, and for other 
purposes; to the Committee on Finance.


The Creating Improved Delivery of Child Care: Affordable, Reliable, and 
                        Educational Act of 1997

  Mr. JEFFORDS. Mr. President, today, there are more than 12 million 
children under the age of five--including half of all infants under one 
year of age--who spend at least part of their day being cared for by 
someone other than their parents. There are millions more school-aged 
children under the age of twelve who are in some form of child care at 
the beginning and end of the school day as well as during school 
holidays and vacations. And more six to twelve year olds who are 
latchkey kids--returning home from school to no supervision because 
parents are working and there are few, if any, alternatives.
  The past two decades have seen a dramatic rise in the number of women 
in the paid labor force. Women now constitute 46% of our nation's labor 
force. Most women are working to meet their family's basic needs. More 
than 60% of women with pre-school aged children are employed full- or 
part-time. Their employment is not a choice, but an essential part of 
their family's economic survival. And for most of these families, child 
care is not an option, but a requirement.
  Many of the traditional sources of child care are no longer 
available--as many of the friends, neighbors, grandparents, and other 
relatives who used to be available to provide child care are also 
working. Research has repeatedly demonstrated that for parents who must 
work, child care services that are dependable and of high quality make 
it easier to find and keep a job. Good child care helps parents reach 
and maintain economic self-sufficiency. Congress acknowledged this when 
it passed welfare reform last year, which dramatically increased the 
amount of entitlement money available for child care.
  Steady increases in the number of employed women with young children, 
combined with last year's welfare reforms, have placed tremendous 
pressures on communities to dramatically expand the amount of available 
child care. While the supply of child care has increased over the past 
10 years, there are still significant shortages for parents in rural 
areas, those with school-aged children or infants, and for lower-income 
families.
  I think that few of us know how much child care costs. The Senate 
Employee's Child Care Center costs between $150 and $175 a week--$7,800 
to $9,100 a year. That places it in the high-middle range in terms of 
costs for the Washington, D.C. area. The younger the child, the higher 
the costs--and Senate Employee's Child Care Center does not accept 
children under 18 months old, the most expensive type of child care.
  The costs of child care are almost wholly dependent upon the 
geographic area, the type of child care, and the age of the child. For 
example, a family purchasing full-time child care services for a four-
year-old in rural New York using a family child care home may pay as 
little as $60 a week. In contrast, a family with an infant using a 
child care center in New York City may pay more than $250 a week.
  For a 3- to 4-year-old child, the least expensive age group, the 
national average for center-based child care is $4,600 a year. The 
average cost for high quality care, such as that provided by the Senate 
Employee's Child Care Center, is between $8,500 and $9,100 a year. The 
cost of family-based child care is generally less expensive, while in-
home care with a nanny or au pair is generally more expensive.
  A family normally spends about twenty-percent of its income on 
housing and ten-percent on food. The costs of child care for a low-or 
middle-income family can rival the cost of housing and be double the 
cost of food. Even though most of us recognize the critical part that 
child care plays in the economic survival of families, we often fail to 
recognize it as a basic cost which consumes a significant portion of a 
family's income.
  Parents can only purchase child care they can afford. Those who do 
find care that is affordable and convenient are often unsatisfied with 
the quality of the care their child receives. In fact, one quarter of 
all parents would change their child care arrangement if they could 
find and afford something better.
  Since 1990, the costs of child care have risen about six-percent 
annually. This is almost triple the annual increase in the cost of 
living. At the same time, there are strong indicators that the quality 
of child care has significantly decreased during that same period of 
time. Parents are paying more but getting less.
  The quality of child care in America is very troubling. A recent 
nationwide study found that forty-percent of the child care provided to 
infants in child care centers was potentially injurious. Fifteen-
percent of center-based child care providers for all pre-schoolers are 
so bad that a child's health and safety are threatened; seventy-percent 
are mediocre--not hurting or helping children; and fifteen-percent 
actively promote a child's development. Center-based child care, the 
object of this study, is the most heavily regulated and frequently 
monitored type of child care. There are strong indications that care 
for children in less regulated settings, such as family-based child 
care and in-home care, is far worse.
  Combining the research on the quality of child care with the 
breakthroughs on the development of the human brain produces a very 
disturbing situation. Many children enter child care by eleven weeks of 
age, are in care for close to 30 hours a week, and often stay in some 
form of child care until they enter school. During that same period of 
life, a child's brain is undergoing a series of extraordinary changes.
  In the first three years of life, the brain either makes the 
connections it needs for learning or it atrophies, making later efforts 
at remediation in learning, behavior, and thinking difficult, at best. 
The experiences and stimulation that a caretaker provide to a child are 
the foundations upon which all future learning is built. The brain's 
greatest and most critical growth spurt is between birth and ten years 
of age--precisely the time when non-parental child care is most 
frequently utilized. A Time magazine special report on ``How a Child's 
Brain Develops'' (February 3, 1997) said it best, ``. . . Good, 
affordable day care is not a luxury or a fringe benefit for welfare 
mothers and working parents but essential brain food for the next 
generation.'' While bad child care can seriously impair a child's 
development, high-quality child care significantly increases the 
chances of good developmental outcomes for children.
  Think about it. At the most important time in the development of a 
child's brain, more than twelve million children are being cared for by 
people who are paid less than the person who picks up your garbage each 
week, and are required to have less training than the person who cuts 
your hair, and less skill-based testing than the person delivering 
packages to your house. Child care providers play an important role in 
a child's development, for they help fine-tune the child's capacity to 
think and process information, social skills, emotional health, and 
acquisition of language.
  Last year, our goal in child care was to streamline federal 
assistance by creating a cohesive structure for federal assistance and 
to provide sufficient government funds to subsidize child care for 
welfare recipients who were transitioning into work. This year our goal 
must be to promote the healthy development of children in child care. I 
am worried that the pressure of the need to accommodate the increasing 
demand for child care will force many into forgoing quality just to 
increase the number of child care slots available.

[[Page S7720]]

  I rise today to introduce legislation entitled ``Creating Improved 
Delivery of Child Care: Affordable, Reliable, and Educational Act of 
1997,'' the CIDCARE Act. It incorporates modifications to the tax code, 
an incentive grant program for states (including wage subsidies for 
child care providers who get additional training and education and a 
grant program to encourage small business partnerships to provide child 
care for employees), a technology-based infrastructure for the 
professional development of child care providers, educational loan 
forgiveness for child care providers, requirements that states include 
the cost of child care in the calculation of child support orders, 
expansion of the federal government's technical assistance and 
information dissemination role, and requirements that child care 
centers located in federal facilities to meet high quality standards of 
care.
  There is no one thing--no magic bullet--that will ensure higher 
quality child care. Each of these provisions has been included to solve 
a specific problem or break through a barrier that has hampered efforts 
to improve the quality of child care. Taken as a whole, these 
provisions represent a comprehensive effort to increase the 
supply while simultaneously creating a demand for high-quality child 
care, and make it affordable for low- and middle-income families.

  To offset the cost of these changes, the bill reduces, but does not 
eliminate, the dependent care tax credit for upper income taxpayers. 
Over a 5-year period, it gradually decreases the amount that an 
employee can place in a dependent care assistance plan used to 
reimburse nonaccredited or non-credential child care. In addition, the 
legislation expands the coordinated enforcement efforts of the Internal 
Revenue Service and the HHS Office of Child Support Enforcement, which 
will significantly reduce the amount of fraud related to illegal tax 
deduction and credit claims by noncustodial, noncontributing parents.
  The first provision in CIDCARE makes several changes in the Child and 
Dependent Care Tax Credit [CDCTC]. This tax credit is the largest tax-
based subsidy for child care. The bill raises the income level for the 
receipt of the highest percentage of employment-related child care 
costs from $10,000 to $20,000. The percentage is decreased at a rate of 
1 percent for each additional $2,500 in adjusted gross income and sets 
a minimum percentage of 10 percent for incomes of $70,000 and above.
  This change represents a more equitable distribution of limited 
resources based on the percentage of income a family must use to meet 
child care expenses. For families qualifying for the EITC, the 
legislation makes the child care tax credit refundable, on a quarterly 
basis. This will enable many low-income working families to move from 
part-time to full-time employment, by easing the burden of child care 
costs and having the money available at regular intervals throughout 
the year.
  Another revision to the Child Care Tax Credit establishes, over a 5-
year period, different rates for the tax credit, dependent on whether 
the child care is provided in an accredited child care facility or by a 
credentialed professional. This will reward parents who choose high-
quality child care and help defray the additional costs of that care.
  I am sensitive to the concerns of colleagues who object to reducing 
the child care tax credit. But before you judge this reduction too 
harshly, let's put it into perspective. The tax credit remains at or 
above the current rate of 20 percent for parents with adjusted gross 
incomes of $45,000 or less, regardless of the type of child care. The 
median income of families with children nationally is $37,000. While 
there are wide differences in between States, there are only four 
States where the median exceeds $45,000 AGI, triggering a reduction in 
the current rate of 20 percent. The median income in most States is 
significantly below this trigger.
  At the end of the 5-year phase in period, the tax credit remains at 
or above the current 20 percent rate for families with an AGI of 
$55,000--if they choose high-quality child care. No States have median 
incomes of families with children which exceed this which triggers a 
reduction below current child care tax rate. Families with incomes at 
or above $70,000 will still receive a tax credit of ten percent, 
increased to 12.5% if high quality care is used.

  In terms of money, a one percent decrease in the child care tax 
credit equals $24 when care for one child is claimed, and $48 for two 
or more children. Families making $70,000 or more are the hardest hit 
by my legislation. Yet their maximum financial cost is $240 a year for 
one child,or $480 a year for two or more children--about half of one 
percent of their adjusted gross income.
  The second area of changes occurs in the Dependent Care Assistance 
Plan (DCAP). The CIDCARE Act increases the amount that an employee can 
contribute to a DCAP account, if the funds are used to pay for the care 
of two or more eligible persons. In addition, the amount of DCAP 
contributions is increased for high-quality care and decreased for care 
that is provided by an unaccredited child care facility or a person who 
has not received a professional credential. At the end of the five year 
phase in, the maximum decrease in the DCAP amount for unaccredited care 
is 20% lower than the current ceiling on contributions. These 
differential rates are phased in over a five year period in order for 
child care providers to achieve accreditation or become credentialed in 
child care.
  Current law prohibits DCAP from being used to pay relatives for care. 
While I support needed controls on the use of DCAP accounts in most 
cases, my legislation would make a very limited exception to this 
prohibition. DCAP payments could be made to pay a parent or grandparent 
to care for a newborn child. The DCAP account could be joined at 
anytime during a pregnancy. The funds would be available for up to 12 
months from the date of deposit into the employee's DCAP account--
because babies have a timetable all their own when it comes to being 
born.
  The last change CIDCARE makes in the Dependent Care Assistance Plan 
is a requirement that federal employees have the opportunity to 
contribute to DCAP. Private employees, as well as many state and local 
governments, have had DCAP available for their employees since 1981. 
Consistent with the intent of the Congressional Accountability Act, I 
want to make this child care subsidy available to federal workers, 
including legislative branch employees.
  Child care is a growing concern to businesses, big and small. 
Employers are coming to the realization that affordable, convenient 
high-quality child care is a critical element in hiring and retaining 
skilled employees. Many companies, such as Johnson & Johnson, IBM, and 
others have been very innovative in providing child care assistance for 
their employees. Small businesses in particular are finding it 
difficult to meet the child care needs of their employees, but 
recognize the importance of that help.
  The CIDCARE Act creates a tax credit for employers providing or 
otherwise supporting high-quality child care arrangements for their 
employees. On the Budget Reconciliation bill passed by the Senate, 
Senator Kohl introduced an amendment to provide a time-limited tax 
credit for employers who provide child care for their employees. To 
reinforce the importance of the Kohl amendment, I have included it in 
CIDCARE. Fifty percent of the expenses incurred by a business to meet 
the child care needs of employees will be credited toward the business' 
Federal tax liability. Eligible expenses are capped at $150,000 per 
year, and the tax credit sunsets after three years.

  Costs allowed to businesses under this provision include startup 
costs, renovations to meet accreditation standards, professional 
development for child care providers, general operating expenses, 
subsidized child care for lower paid employees, support for child care 
resource and referral services and other child care activities. These 
provisions encourage business involvement and innovation in meeting the 
child care needs of employees and increasing the demand for higher 
quality child care.
  Current law prohibits businesses from receiving a charitable 
deduction for donations made to public entities, such as schools and 
child care services. CIDCARE will extend eligibility for a business 
charitable deduction to the donation of educational equipment and

[[Page S7721]]

supplies donated to public schools, public child care providers, and 
public child care support entities, such as resource and referral 
services. If child care is to improve and meet the developmental needs 
of our Nation's children, every available resource must be made 
available. Computers which are discarded because they are too slow or 
have insufficient hard drive capacity, can be the first step into the 
computer-age for a small child or the link to professional training for 
a child care provider.
  A critical part of improving the quality of child care is 
professional development for child care providers. Since the 1970's 
there has been a decline in child care teacher salaries. In 1990, 
teachers in child care centers earned an average of $11,500 a year. 
Assistant teachers, the largest growing segment of child care 
professionals, were paid 10- to 20-percent less than child care 
teachers. The 1990 annual income of regulated family child care 
providers was $10,944 which translates to about $4 an hour. 
Nonregulated family child care, generally comprised of providers taking 
care of a smaller number of children, earned an average of $4,275 a 
year--substantially less than minimum wage.
  With these wages, it is easy to understand why more child care 
providers do not participate in professional training or attend college 
classes to improve their skills. The costs of applying for and 
receiving certification as a qualified child care professional are 
minimal, but understandably out of reach for many child care providers.
  This legislation will exempt expenses directly related to child care 
accreditation or becoming credentialed from the 2 percent floor that is 
applied to miscellaneous itemized deductions. This will at least permit 
child care providers to receive a full deduction for the expenses 
associated with improving the child care services which they provide. 
This incentive for professional growth and the development of new 
skills is a small but critical part of my overall effort to support 
high-quality child care.

  The last tax modification in CIDCARE creates a very limited exception 
to the executive use rule governing the tax deduction for home office 
expenses. The legislation will permit the mixed use of home office 
space for business and personal purposes to allow a person to care for 
his or her child. In some ways, the need for this exception comes down 
to fundamental fairness. How many school holidays, snow days and other 
times do children accompany their parents into work?
  I can always tell when the schools are unexpectedly closed, by the 
increased number of little people I see in Senate offices and eateries. 
I have been in Senate offices and other workplaces where a crib or 
playpen is clearly in evidence. Yet, none of us question whether our 
offices are exclusively for business use. One of the big incentives for 
telecommuting and home-based business is to allow parents to have more 
time with their families, yet existing law would keep a new mother from 
legitimately claiming a home office deduction if she has her child 
sleeping in a crib in a corner of the room where she is working.
  The non-tax related provisions of the legislation are designed to 
complement and work with the tax provisions. In order for families to 
be able to take advantage of the increased tax credits for child care 
in an accredited center or with a provider who has received a child 
care credential, there need to be more of these high quality centers 
and better trained providers. Child care providers must have easy, 
affordable access to training and other activities which will lead to 
accreditation and credentialing. This effort will require that the 
federal government join forces with states and the business community. 
Parents must be made aware of how to identify quality child care and 
its importance in their children's lives. And the federal government 
should set an example by requiring that child care centers located in 
federal facilities meet higher standards of care. It will take all of 
these provisions, working together, to improve the quality of child 
care for our children.
  The CIDCARE Act will require that states include the cost of child 
care in the calculation of child support obligations. When a custodial 
parent is employed or actively seeking employment, the state procedures 
for the determination of the amount of child support need to include an 
amount equal to or more than the child care rates used by the state to 
administer the Child Care and Development Block Grant Act. When child 
care is being provided in an accredited child care center or by a 
credentialed child care that rate will be increased by fifty-percent.
  Since the passage of the Child Care and Development Act in 1990, 
states have been setting ``market'' or ``comparable'' rates for child 
care. CIDCARE uses those rates as a baseline for adding the cost of 
child care to the amount of child support which a non-custodial parent 
will be required to pay. Current child support calculations 
include estimates of the other basic expenses necessary to provide 
financially for a child. In many instances, the expense of child care 
is the direct result of the divorce or lack of financial support from 
the non-custodial parent. It is only fair that child care expenses be 
included in those calculations. If the custodial parent secures higher 
quality child care, the non-custodial parent will share in the 
additional costs of that care. Children should not be forced into poor 
quality child care because a non-custodial parent refused to share in 
the additional expense of higher quality care.

  The CIDCARE bill establishes a $260 million competitive grant program 
to assist states in improving the quality of child care. To be 
eligible, a state must not have reduced the scope or otherwise 
decreased the state's licensing requirements since 1995, must be in 
compliance with the requirements of the Child Care and Development 
Block Grant, must have drawn down at least 80% of the amount awarded to 
the state in federal entitlement child care funds requiring a state 
match, and must conduct annual on-site monitoring of state licensed or 
otherwise regulated child care facilities, with at least one 
unannounced visit every 3 years. The legislation requires that a 
Priority be given to states that raise at least a 10% match for the 
federal funds from business or other private sources.
  States must use at least 20% of the grant funds awarded to establish 
a subsidy program to provide salary increases to child care providers 
who are credentialed in the state. The low level of child care wages is 
the most often cited reason for the tremendous staff turnover in the 
child care profession. In areas where child care subsidies as low as 
fifty cents an hour are put in place, the staff turnover rate drops 
dramatically. The wage subsidy also will encourage more child care 
providers to get additional training or advance their education.
  In addition, states will need to use at least twenty-percent of the 
funds awarded for a grant program to provide start-up funds for 
partnerships of small businesses to develop and operate child care 
cooperative services for their employees. While large employers have 
both the number of employees to justify an on- or near-site child care 
center and the additional financial resources for start-up costs, small 
businesses have been struggling with ways to help their employees meet 
their child care needs. This grant program will provide time-limited 
help for partnerships of small businesses who work together to develop 
child care resources for their employees.
  States can use the remainder of grant funds awarded for any of the 
following activities: developing standards for of entities applying for 
state recognition for the accreditation and credentialing of child care 
providers; establishing a scholarship program to help child care 
providers meet the costs of education and training; expanding state-
based child care training and technical assistance activities; improve 
consumer education efforts including the expansion of resource and 
referral services and child care complaint systems; providing increased 
rates of reimbursement provided under federal or state child care 
assistance for children with special needs; purchasing 
special supplies, equipment, or meeting other extraordinary expenses 
necessary for the care of special needs children for distribution to 
child care providers serving special needs children, or providing 
increased rates of reimbursement provided under federal or state child 
care assistance for accredited and credentialed care. Each of these 
activities has been demonstrated

[[Page S7722]]

to be a contributing factor in improving the quality of child care.

  Parents, child care providers, employers, and others need a 
constantly updated source of information about improving the quality of 
child care. States need a central depository where they can learn what 
other states are doing as well as a place where they can contribute 
their own ideas and activities from which others can learn. The 
collection and dissemination of information, demonstrations, and 
technology is one of the most important roles of the federal 
government.
  Under provisions in the CIDCARE Act, the Department of Health and 
Human Services (HHS) will collect information about the importance of 
high quality child care (including what it is, how to identify it, why 
it is important for children), and in partnership with the ADCouncil or 
similar professional advertising entity, distribute that information 
through a national public awareness campaign and other mechanisms. To 
increase the capacity of child care credentialing and accreditation 
entities, HHS will award competitive grants to child care credentialing 
and accreditation entities that have not been in existence more than 10 
years for the purpose of refining and evaluating their procedures for 
and methods of granting child care accreditation and/or credentialing. 
The legislation authorizes $10 million annually, to conduct these 
information and technology transfer activities.
  The CIDCARE Act authorizes $50 million a year to create and operate a 
technology-based training infrastructure to enable child care providers 
nationwide to receive the training, education, and support they need to 
improve the quality of child care. The bill builds upon existing 
distance learning, Internet, and satellite resources, with sufficient 
funding to expand access to affordable child care training and 
information. The primary focus of the infrastructure will be to 
disseminate the training necessary to become an accredited child care 
center or a credentialed child care professional. Training and 
education, delivered at a minimal cost and accessible to individuals 
within 25 miles of their homes, will remove one of the most substantial 
barriers to child care credentialing and accreditation.
  Essentially, the legislation establishes a child care training and 
education interactive ``network'', which will be used by child care 
credentialing and accreditation entities for training, skills testing, 
and other activities needed to achieve and maintain child care 
credentialing and accreditation. Entities recognized by 2 or more 
states as providing accepted child care credentialing or accreditation 
services will be active participants in decisions governing the use of 
the child care ``training network.'' Time lines for the creation and 
implementation of the infrastructure and caps on administrative costs 
are included in the bill provide both financial and programmatic 
accountability.

  Through the child care training infrastructure, a no interest 
revolving loan fund is established to enable child care providers and 
child care support entities to purchase computers, satellite dishes, 
and other technological equipment which enable them to participate in 
the child care training provided on the national infrastructure. For 
the first five years of the legislation, at least ten-percent of the 
funds appropriated for the child care training infrastructure will be 
placed into the revolving loan fund. This part of CIDCARE, like similar 
federal loan programs, establishes that the funds be kept in a separate 
interest bearing account, establishes application procedures, terms and 
conditions for the approval of such loans, and procedures for handling 
loan defaults.
  At the current time, child care centers located in federal facilities 
are not required to meet even basic safety and health requirements. 
They are not subject to state or local laws or regulations governing 
the operation of a child care center. The CIDCARE Act will require 
federal child care centers (those in buildings leased or owned by the 
federal government--legislative, executive, judicial branches) to meet 
all state and local licensing and other regulatory requirements related 
to the provision of child care, within six months of the passage of 
this legislation--or make substantial progress towards meeting those 
requirements. The appropriate Administrator of each branch of 
government shall issue regulations specifying center-based child care 
accreditation standards and require all child care facilities in 
federal buildings under their control achieve accreditation within 3 
years of the passage of this legislation.
  If the child care program located in a federal facility fails to be 
in compliance, or show substantial compliance with state and local 
licensing requirements within six months or with the identified 
accreditation standards within three years, the agency must cease 
providing child care in that child care center. On-site monitoring to 
ensure compliance with these regulations and standards must be 
performed by an outside entity. The legislation authorizes $900 
thousand to the General Services Administration (GSA) to implement this 
provision.
  CIDCARE will require that federal child care programs provided by the 
Corporation for National and Community Service, the Departments of 
Defense, Education, Housing and Urban Affairs, Justice, and Labor, will 
ensure, to the maximum extent possible, that by October 1, 2001, any 
child care made available through programs funded or operated by those 
Departments and the Corporation, be provided by an accredited child 
care facility or a credentialed child care professional. The federal 
government needs to demonstrate a commitment to quality child care, by 
raising the standards it applies to its own programs.
  The CIDCARE Act will expand the Community Development Block Grant to 
include the renovation or upgrading of child care facilities to meet 
accreditation standards as an allowable use of the grant funds. It also 
will extend existing Perkins and Stafford Loan forgiveness programs to 
include persons who work as credentialed professionals in a child care 
setting. Just as these loan forgiveness programs helped encourage more 
people to become teachers, I hope that this extension of these two 
educational loan programs to child care providers will result in more 
and better qualified child care providers. To be eligible for loan 
forgiveness, the person must be employed full time providing child care 
services and have a degree in early childhood education or development 
or receive professional child care credentials.

  The need for high-quality child care is compelling. Having 
affordable, convenient child care is tied directly to a family's 
ability to produce income. Good child care can be an effective way to 
support the healthy development of children, particularly in the 
acquisition of social and language skills. For the millions of children 
who spend much of their preschool lives and many of their nonschool 
hours being cared for by someone other than their parents, child care 
provides the foundation upon which all future education will be built--
and determines to a large extent whether that foundation will be strong 
or weak.
  As we all know, quality child care costs money. It costs money to 
parents who bear the biggest burden for the cost of child care. It 
costs businesses both through the direct assistance that they provide 
to employees to help with the costs of child care, and through their 
ability to hire and retain a skilled work force. It costs Government 
through existing tax provisions, direct spending, and discretionary 
spending targeted at child care. But the costs of not making this 
investment are even higher. Those costs can be measured in the expense 
of remedial education, the expansion of an unskilled labor force, the 
increase in prison populations, and most importantly, the blunted 
potential of millions of children.
  I urge my colleagues to join Senator Dodd, Senator Roberts and me in 
support of the CIDCARE bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1037

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Creating 
     Improved Delivery of Child

[[Page S7723]]

     Care: Affordable, Reliable, and Educational Act'' or as the 
     ``CIDCARE Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

                 TITLE I--DEMAND FOR QUALITY CHILD CARE

Sec. 101. Expansion of dependent care tax credit.
Sec. 102. Expansion of dependent care assistance program.
Sec. 103. Inclusion of child care costs in child support orders.

                 TITLE II--SUPPLY OF QUALITY CHILD CARE

            Subtitle A--Tax Benefits for Quality Child Care

Sec. 201. Allowance of credit for employer expenses for child care 
              assistance.
Sec. 202. Charitable contributions of scientific equipment to 
              accredited and credentialed child care providers and to 
              elementary and secondary schools.
Sec. 203. 2-percent floor on miscellaneous itemized deductions not 
              applicable to accreditation and credentialing expenses of 
              child care providers.
Sec. 204. Expansion of home office deduction to include use of office 
              for dependent care.

      Subtitle B--Child Care Quality Improvement Incentive Program

Sec. 211. Definitions.
Sec. 212. Establishment of State program.
Sec. 213. State eligibility and application requirements.
Sec. 214. Use of funds by States.
Sec. 215. Authorization of appropriations.

    Subtitle C--Distribution of Information About Quality Child Care

Sec. 221. Expansion of role of the Department of Health and Human 
              Services in the collection and dissemination of 
              information and technology.
Sec. 222. Child care training infrastructure.
Sec. 223. Child care training revolving fund.

 Subtitle D--Quality Child Care Through Federal Facilities and Programs

Sec. 231. Providing quality child care in Federal facilities.
Sec. 232. Providing quality child care through Federal programs.
Sec. 233. Use of community development block grants to establish 
              accredited child care centers.

                  Subtitle E--Miscellaneous Provisions

Sec. 241. Student loan repayment and cancellation for child care 
              workers.
Sec. 242. Expansion of coordinated enforcement efforts of Internal 
              Revenue Service and HHS Office of Child Support 
              Enforcement.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Accredited child care center.--The term ``accredited 
     child care center'' means--
       (A) a center that is accredited, by a child care 
     credentialing or accreditation entity recognized by a State, 
     to provide child care to children in the State (except 
     children who a tribal organization elects to serve through a 
     center described in subparagraph (B));
       (B) a center that is accredited, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization;
       (C) a center that is used as a Head Start center under the 
     Head Start Act (42 U.S.C. 9831 et seq.) and is in compliance 
     with any applicable performance standards established by 
     regulation under such Act for Head Start programs; or
       (D) a military child development center (as defined in 
     section 1798(1) of title 10, United States Code).
       (2) Child care credentialing or accreditation entity.--The 
     term ``child care credentialing or accreditation entity'' 
     means a nonprofit private organization or public agency 
     that--
       (A) is recognized by a State agency or tribal organization; 
     and
       (B) accredits a center or credentials an individual to 
     provide child care on the basis of--
       (i) an accreditation or credentialing instrument based on 
     peer-validated research;
       (ii) compliance with applicable State and local licensing 
     requirements, or standards described in section 
     658E(c)(2)(E)(ii) of the Child Care and Development Block 
     Grant Act (42 U.S.C. 9858c(c)(2)(E)(ii)), as appropriate, for 
     the center or individual;
       (iii) outside monitoring of the center or individual; and
       (iv) criteria that provide assurances of--

       (I) compliance with age-appropriate health and safety 
     standards at the center or by the individual;
       (II) use of age-appropriate developmental and educational 
     activities, as an integral part of the child care program 
     carried out at the center or by the individual; and
       (III) use of ongoing staff development or training 
     activities for the staff of the center or the individual, 
     including related skills-based testing.

       (3) Credentialed child care professional.--The term 
     ``credentialed child care professional'' means--
       (A) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a State, 
     to provide child care to children in the State (except 
     children who a tribal organization elects to serve through an 
     individual described in subparagraph (B)); or
       (B) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization.
       (4) State; tribal organization.--The terms ``State'' and 
     ``tribal organization'' have the meaning given the term in 
     section 658P of the Child Care and Development Block Grant 
     Act (42 U.S.C. 9858n).
                 TITLE I--DEMAND FOR QUALITY CHILD CARE

     SEC. 101. EXPANSION OF DEPENDENT CARE TAX CREDIT.

       (a) Percentage of Employment-Related Expenses Determined by 
     Status of Care Giver.--Section 21(a)(2) of the Internal 
     Revenue Code of 1986 (defining applicable percentage) is 
     amended to read as follows:
       ``(2) Applicable percentage defined.--
       ``(A) In general.--For purposes of paragraph (1), the term 
     `applicable percentage' means--
       ``(i) in the case of employment-related expenses described 
     in subsection (b)(2)(A)(ii) incurred for the care of a 
     qualifying individual described in subsection (b)(1)(A) by an 
     accredited child care center or a credentialed child care 
     professional, the initial percentage reduced (but not below 
     12.5 percent) ratably for each $2,500 (or fraction thereof) 
     by which the taxpayers's adjusted gross income for the 
     taxable year exceeds $20,000, and
       ``(ii) in any other case, 30 percent reduced (but not below 
     10 percent) ratably for each $2,500 (or fraction thereof) by 
     which the taxpayers's adjusted gross income for the taxable 
     year exceeds $20,000 but does not exceed $70,000.
       ``(B) Initial percentage for expenses incurred for 
     accredited or credentialed providers.--For purposes of 
     subparagraph (A)(i), the initial percentage shall be 
     determined in accordance with the following table:

The initial percentage is--e year beginning in--
  1998........................................................31.5 ....

  1999..........................................................33 ....

  2000........................................................34.5 ....

  2001..........................................................36 ....

  2002 and thereafter.......................................37.5.''....

       (b) Definitions.--Section 21(b)(2) of the Internal Revenue 
     Code of 1986 (relating to definitions of qualifying 
     individual and employment-related expenses) is amended by 
     adding at the end the following:
       ``(E) Accredited child care center.--The term `accredited 
     child care center' means--
       ``(i) a center that is accredited, by a child care 
     credentialing or accreditation entity recognized by a State, 
     to provide child care to children in the State (except 
     children who a tribal organization elects to serve through a 
     center described in clause (ii));
       ``(ii) a center that is accredited, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization;
       ``(iii) a center that is used as a Head Start center under 
     the Head Start Act (42 U.S.C. 9831 et seq.) and is in 
     compliance with any applicable performance standards 
     established by regulation under such Act for Head Start 
     programs; or
       ``(iv) a military child development center (as defined in 
     section 1798(1) of title 10, United States Code).
       ``(F) Child care credentialing or accreditation entity.--
     The term `child care credentialing or accreditation entity' 
     means a nonprofit private organization or public agency 
     that--
       ``(i) is recognized by a State agency or tribal 
     organization; and
       ``(ii) accredits a center or credentials an individual to 
     provide child care on the basis of--

       ``(I) an accreditation or credentialing instrument based on 
     peer-validated research;
       ``(II) compliance with applicable State and local licensing 
     requirements, or standards described in section 
     658E(c)(2)(E)(ii) of the Child Care and Development Block 
     Grant Act (42 U.S.C. 9858c(c)(2)(E)(ii)), as appropriate, for 
     the center or individual;
       ``(III) outside monitoring of the center or individual; and
       ``(IV) criteria that provide assurances of--

       ``(aa) compliance with age-appropriate health and safety 
     standards at the center or by the individual;
       ``(bb) use of age-appropriate developmental and educational 
     activities, as an integral part of the child care program 
     carried out at the center or by the individual; and
       ``(cc) use of ongoing staff development or training 
     activities for the staff of the center or the individual, 
     including related skills-based testing.
       ``(G) Credentialed child care professional.--The term 
     `credentialed child care professional' means--
       ``(i) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a State, 
     to provide child care to children in the State (except 
     children who a tribal organization elects to serve through an 
     individual described in clause (i)); or
       ``(ii) an individual who is credentialed, by a child care 
     credentialing or accreditation entity recognized by a tribal 
     organization, to provide child care for children served by 
     the tribal organization.

[[Page S7724]]

       ``(H) Tribal organization.--The term `tribal organization' 
     has the meaning given the term in section 658P of the Child 
     Care and Development Block Grant Act (42 U.S.C. 9858n).''
       (c) Credit Made Refundable for Low Income Taxpayers.--
       (1) In general.--Section 21 of the Internal Revenue Code of 
     1986 (relating to credit for household and dependent care 
     services) is amended by redesignating subsection (f) as 
     subsection (g) and by inserting after subsection (e) the 
     following:
       ``(f) Credit Made Refundable for Low Income Taxpayers.--
       ``(1) In general.--For purposes of this subtitle, in the 
     case of an applicable taxpayer individual, the credit 
     allowable under subsection (a) for any taxable year shall be 
     treated as a credit allowable under subpart C of this part.
       ``(2) Applicable taxpayer.--For purposes of this 
     subsection, the term `applicable taxpayer' means a taxpayer 
     with respect to whom the credit under section 32 is allowable 
     for the taxable year.
       ``(3) Coordination with advance payments and minimum tax.--
     Rules similar to the rules of subsections (g) and (h) of 
     section 32 shall apply with respect to the portion of any 
     credit to which this subsection applies.''.
       (2) Advance payment of credit.--
       (A) In general.--Chapter 25 of such Code (relating to 
     general provisions relating to employment taxes) is amended 
     by inserting after section 3507 the following:

     ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, every employer making payment of wages with respect 
     to whom a dependent care eligibility certificate is in effect 
     shall, at the time of paying such wages, make an additional 
     payment equal to such employee's dependent care advance 
     amount.
       ``(b) Dependent Care Eligibility Certificate.--For purposes 
     of this title, a dependent care eligibility certificate is a 
     statement furnished by an employee to the employer which--
       ``(1) certifies that the employee will be eligible to 
     receive the credit provided by section 21 for the taxable 
     year,
       ``(2) certifies that the employee reasonably expects to be 
     an applicable taxpayer for the taxable year,
       ``(3) certifies that the employee does not have a dependent 
     care eligibility certificate in effect for the calendar year 
     with respect to the payment of wages by another employer,
       ``(4) states whether or not the employee's spouse has a 
     dependent care eligibility certificate in effect,
       ``(5) states the number of qualifying individuals in the 
     household maintained by the employee,
       ``(6) states whether a qualifying individual will be cared 
     for by an accredited child care center or a credentialed 
     child care professional, and
       ``(7) estimates the amount of employment-related expenses 
     for the calendar year.
       ``(c) Dependent Care Advance Amount.--
       ``(1) In general.--For purposes of this title, the term 
     `dependent care advance amount' means, with respect to any 
     payroll period, the amount determined--
       ``(A) on the basis of the employee's wages from the 
     employer for such period,
       ``(B) on the basis of the employee's estimated employment-
     related expenses included in the dependent care eligibility 
     certificate, and
       ``(C) in accordance with tables provided by the Secretary.
       ``(2) Advance amount tables.--The tables referred to in 
     paragraph (1)(C) shall be similar in form to the tables 
     prescribed under section 3402 and, to the maximum extent 
     feasible, shall be coordinated with such tables and the 
     tables prescribed under section 3507(c).
       ``(d) Other Rules.--For purposes of this section, rules 
     similar to the rules of subsections (d) and (e) of section 
     3507 shall apply.
       ``(e) Definitions.--For purposes of this section, terms 
     used in this section which are defined in section 21 shall 
     have the respective meanings given such terms by section 
     21.''.
       (B) Conforming amendment.--The table of sections for 
     chapter 25 of such Code is amended by adding after the item 
     relating to section 3507 the following:

``Sec. 3507A. Advance payment of dependent care credit.''.

       (d) Effective Dates.--
       (1) Applicable percentage.--The amendments made by 
     subsection (a) and (b) shall apply to taxable years beginning 
     after December 31, 1997.
       (2) Credit made refundable.--The amendments made by 
     subsection (c) shall apply to taxable years beginning after 
     December 31, 2000.

     SEC. 102. EXPANSION OF DEPENDENT CARE ASSISTANCE PROGRAM.

       (a) In General.--Section 129(a)(2)(A) of the Internal 
     Revenue Code of 1986 (relating to limitation of exclusion) is 
     amended to read as follows:
       ``(A) Dollar limitation.--
       ``(i) In general.--The amount which may be excluded under 
     paragraph (1) for dependent care assistance with respect to 
     dependent care services provided during a taxable year shall 
     not exceed--

       ``(I) in the case of dependent care services provided by an 
     accredited child care center or a credentialed child care 
     professional for a qualifying individual described in section 
     21(b)(1)(A), an amount determined in accordance with the 
     following table:

       

                                                                        
                                                                        
                                                         For 2 or more  
  ``In the case of taxable years     For 1 qualifying      qualifying   
           beginning in:             individual, the    individuals, the
                                        amount is:         amount is:   
                                                                        
1998..............................        $5,200             $6,700     
1999..............................        $5,400             $6,900     
2000..............................        $5,600             $7,100     
2001..............................        $5,800             $7,300     
2002 and thereafter...............        $6,000            $7,500,     
                                                                        

       ``(II) in the case of other dependent care services for a 
     qualifying individual described in section 21(b)(1)(A) or 
     payments described in subsection (e)(1)(B), an amount 
     determined in accordance with the following table:

       

                                                                        
                                                                        
                                                         For 2 or more  
  ``In the case of taxable years     For 1 qualifying      qualifying   
           beginning in:             individual, the    individuals, the
                                        amount is:         amount is:   
                                                                        
1998..............................        $4,800             $6,300     
1999..............................        $4,600             $6,100     
2000..............................        $4,400             $5,900     
2001..............................        $4,200             $5,700     
2002 and thereafter...............        $4,000            $5,500,     
                                                                        

     and
       ``(III) in the case of other dependent care services for a 
     qualifying individual described in subparagraph (B) or (C) of 
     section 21(b)(1), $5,000.

       ``(ii) Amounts for married individuals filing separate 
     returns.--In the case of a separate return by a married 
     individual, clause (i) shall be applied by using one-half of 
     any amount specified in such clause.
       ``(iii) Providers.--For purposes of clause (i)(I), the 
     terms `accredited child care center' and `credentialed child 
     care professional' have the meaning given such terms by 
     subparagraphs (E) and (G) of section 21(c)(2), respectively.
       (b) Payments for Stay-at-Home Care Allowed.--
       (1) In general.--Section 129(e)(1) of the Internal Revenue 
     Code of 1986 (relating to definitions and special rules) is 
     amended to read as follows:
       ``(1) Dependent care assistance.--The term `dependent care 
     assistance' means--
       ``(A) the payment of, or provision of, those services which 
     if paid for by the employee would be considered employment-
     related expenses under section 21(b)(2) (relating to expenses 
     for household and dependent care services necessary for 
     gainful employment), and
       ``(B) any payment to the employee from amounts contributed 
     to the employee's account during the pregnancy of the 
     employee paid within 1 year after such contribution and 
     during the period in which--
       ``(i) the employee,
       ``(ii) the employee's spouse, or
       ``(iii) a parent of the employee or the employee's spouse,
     stays at home to care for a qualifying individual described 
     in section 21(b)(1)(A).''.
       (2) Conforming amendments.--
       (A) Section 129(c) of such Code (relating to payments to 
     related individuals) is amended by striking ``No amount'' and 
     inserting ``Except in the case of payments described in 
     subsection (e)(1)(B), no amount.''.
       (B) Section 129(e)(9) of such Code (relating to identifying 
     information required with respect to service provider) is 
     amended by striking ``No amount'' and inserting ``Except in 
     the case of payments described in paragraph (1)(B)(i), no 
     amount.''.
       (c) Dependent Care Assistance Program for Federal 
     Employees.--Subpart G of part III of title 5, United States 
     Code, is amended by inserting after chapter 87 the following:

            ``CHAPTER 88--DEPENDENT CARE ASSISTANCE PROGRAM

     ``Sec. 8801. Definitions

       ``(a) For the purpose of this chapter, `employee' means--
       ``(1) an employee as defined by section 2105 of this title;
       ``(2) a Member of Congress as defined by section 2106 of 
     this title;
       ``(3) a Congressional employee as defined by section 2107 
     of this title;
       ``(4) the President;
       ``(5) a justice or judge of the United States appointed to 
     hold office during good behavior (i) who is in regular active 
     judicial service, or (ii) who is retired from regular active 
     service under section 371(b) or 372(a) of title 28, United 
     States Code, or (iii) who has resigned the judicial office 
     under section 371(a) of title 28 with the continued right 
     during the remainder of his lifetime to receive the salary of 
     the office at the time of his resignation;
       ``(6) an individual first employed by the government of the 
     District of Columbia before October 1, 1987;
       ``(7) an individual employed by Gallaudet College;
       ``(8) an individual employed by a county committee 
     established under section 590h(b) of title 16;
       ``(9) an individual appointed to a position on the office 
     staff of a former President under section 1(b) of the Act of 
     August 25, 1958 (72 Stat. 838); and
       ``(10) an individual appointed to a position on the office 
     staff of a former President, or

[[Page S7725]]

     a former Vice President under section 4 of the Presidential 
     Transition Act of 1963, as amended (78 Stat. 153), who 
     immediately before the date of such appointment was an 
     employee as defined under any other paragraph of this 
     subsection;
     but does not include--
       ``(A) an employee of a corporation supervised by the Farm 
     Credit Administration if private interests elect or appoint a 
     member of the board of directors;
       ``(B) an individual who is not a citizen or national of the 
     United States and whose permanent duty station is outside the 
     United States, unless the individual was an employee for the 
     purpose of this chapter on September 30, 1979, by reason of 
     service in an Executive agency, the United States Postal 
     Service, or the Smithsonian Institution in the area which was 
     then known as the Canal Zone; or
       ``(C) an employee excluded by regulation of the Office of 
     Personnel Management under section 8716(b) of this title.
       ``(b) For the purpose of this chapter, `dependent care 
     assistance program' has the meaning given such term by 
     section 129(d) of the Internal Revenue Code of 1986.

     ``Sec. 8802. Dependent care assistance program

       ``The Office of Personnel Management shall establish and 
     maintain a dependent care assistance program for the benefit 
     of employees.''.
       (d) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 1997.

     SEC. 103. INCLUSION OF CHILD CARE COSTS IN CHILD SUPPORT 
                   ORDERS.

       (a) In General.--Section 466(a) of the Social Security Act 
     (42 U.S.C. 666(a)) is amended by inserting after paragraph 
     (19) the following:
       ``(20) Child care costs.--
       ``(A) In general.--Procedures under which all child support 
     orders enforced under this part shall include in the case of 
     a custodial parent who is employed or is actively seeking 
     employment an amount equal to or more than the applicable 
     payment rate for the type of child care services provided to 
     that parent's child or children that is established in 
     accordance with section 658E(c)(4) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(4)), 
     increased by 50 percent of such rate if such services are 
     provided by an accredited child care center or a credentialed 
     child care professional.
       ``(B) Definitions.--In this paragraph, the terms 
     `accredited child care center' and `credentialed child care 
     professional' have the meaning given those terms in section 2 
     of the CIDCARE Act.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies to child support orders enforced or otherwise 
     modified by a court on and after the date of enactment of 
     this Act.
                 TITLE II--SUPPLY OF QUALITY CHILD CARE
            Subtitle A--Tax Benefits for Quality Child Care

     SEC. 201. 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) Allowance of Credit.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to 50 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 1034) 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 (as defined in 
     section 21(b)(2)(F) with respect to a qualified child care 
     facility.
       ``(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 1034) 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) the facility is not the principal trade or business 
     of the taxpayer unless at least 30 percent of the enrollees 
     of such facility are dependents of employees of the taxpayer, 
     and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(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 evpercentage 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) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(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.

[[Page S7726]]

       ``(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.
       ``(g) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 1999.''
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended--
       (A) by striking out ``plus'' at the end of paragraph (11),
       (B) by striking out 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) 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, 
     1997.

     SEC. 202. CHARITABLE CONTRIBUTIONS OF SCIENTIFIC EQUIPMENT TO 
                   ACCREDITED AND CREDENTIALED CHILD CARE 
                   PROVIDERS AND TO ELEMENTARY AND SECONDARY 
                   SCHOOLS.

       (a) In General.--Subparagraph (B) of section 170(e)(4) of 
     the Internal Revenue Code of 1986 (relating to special rule 
     for contributions of scientific property used for research) 
     is amended to read as follows:
       ``(B) Qualified research, child care, or education 
     contribution.--For purposes of this paragraph, the term 
     `qualified research, child care, or education contribution' 
     means a charitable contribution by a corporation of tangible 
     personal property (including computer software), but only 
     if--
       ``(i) the contribution is to--

       ``(I) an organization described in section 501(c)(3) and 
     exempt from taxation under section 501(a) which is an 
     accredited child care center (as defined in section 
     21(c)(2)(E)) or a child care center actively seeking 
     accreditation or certification of its employees by a child 
     care credentialing or accreditation entity (as defined in 
     section 21(c)(2)(F)) on the date of such contribution,
       ``(II) an organization described in section 501(c)(3) and 
     exempt from taxation under section 501(a) which is a 
     professional or educational support entity for accredited 
     child care centers or credentialed child care professionals 
     (as defined in subparagraphs (E) and (G) of section 21(c)(2), 
     respectively),
       ``(III) an educational organization described in subsection 
     (b)(1)(A)(ii),
       ``(IV) a governmental unit described in subsection (c)(1), 
     or
       ``(V) an organization described in section 41(e)(6)(B),

       ``(ii) the contribution is made not later than 3 years 
     after the date the taxpayer acquired the property (or in the 
     case of property constructed by the taxpayer, the date the 
     construction of the property is substantially completed),
       ``(iii) the property is scientific equipment or apparatus 
     substantially all of the use of which by the donee is for--

       ``(I) research or experimentation (within the meaning of 
     section 174), or for research training, in the United States 
     in physical or biological sciences, or
       ``(II) in the case of an organization described in 
     subclause (I), (II), (III), or (IV) of clause (i), use within 
     the United States for educational purposes or support 
     activities related to the purpose or function of the 
     organization,

       ``(iv) the original use of the property began with the 
     taxpayer (or in the case of property constructed by the 
     taxpayer, with the donee),
       ``(v) the property is not transferred by the donee in 
     exchange for money, other property, or services, and
       ``(vi) the taxpayer receives from the donee a written 
     statement representing that its use and disposition of the 
     property will be in accordance with the provisions of clauses 
     (iv) and (v).''.
       (b) Donations to Charity for Refurbishing.--Section 
     170(e)(4) of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
       ``(D) Donations to charity for refurbishing.--For purposes 
     of this paragraph, a charitable contribution by a corporation 
     shall be treated as a qualified research, child care, or 
     education contribution if--
       ``(i) such contribution is a contribution of property 
     described in subparagraph (B)(iii) to an organization 
     described in section 501(c)(3) and exempt from taxation under 
     section 501(a),
       ``(ii) such organization repairs and refurbishes the 
     property and donates the property to an organization 
     described in subparagraph (B)(i), and
       ``(iii) the taxpayer receives from the organization to whom 
     the taxpayer contributed the property a written statement 
     representing that its use of the property (and any use by the 
     organization to which it donates the property) meets the 
     requirements of this paragraph.''.
       (c) Conforming Amendments.--
       (1) Paragraph (4)(A) of section 170(e) of the Internal 
     Revenue Code of 1986 is amended by striking ``qualified 
     research contribution'' each place it appears and inserting 
     ``qualified research, child care, or education 
     contribution''.
       (2) The heading for section 170(e)(4) of such Code is 
     amended by inserting ``, child care, or education'' after 
     ``research''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1997.

     SEC. 203. 2-PERCENT FLOOR ON MISCELLANEOUS ITEMIZED 
                   DEDUCTIONS NOT APPLICABLE TO ACCREDITATION AND 
                   CREDENTIALING EXPENSES OF CHILD CARE PROVIDERS.

       (a) In General.--Section 67(b) of the Internal Revenue Code 
     of 1986 (relating to miscellaneous itemized deductions) is 
     amended by striking ``and'' at the end of paragraph (11), by 
     striking the period at the end of paragraph (12) and 
     inserting ``, and'', and by adding at the end the following:
       ``(13) the deduction allowable for accreditation and 
     credentialing expenses of child care providers.''.
       (b) Definition.--Section 67 of the Internal Revenue Code of 
     1986 (relating to 2-percent floor on miscellaneous itemized 
     deductions) is amended by redesignating subsections (e) and 
     (f) as subsections (f) and (g), respectively, and by 
     inserting after subsection (d) the following:
       ``(e) Accreditation and credentialing expenses of child 
     care providers.--For purposes of this section--
       ``(1) In general.--The term `accreditation and 
     credentialing expenses of child care providers' means direct 
     professional costs and educational and training expenses paid 
     or incurred by an eligible individual in order to achieve and 
     remain qualified for service as an employee of an accredited 
     child care center or as a credentialed child care 
     professional (as defined in subparagraphs (E) and (G) of 
     section 21(c)(2), respectively).
       ``(2) Eligible individual.--The term `eligible individual' 
     means an individual 60 percent of the taxable income of whom 
     for any taxable year is derived from service described in 
     paragraph (1).''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1997.

     SEC. 204. EXPANSION OF HOME OFFICE DEDUCTION TO INCLUDE USE 
                   OF OFFICE FOR DEPENDENT CARE.

       (a) In General.--Section 280A(c)(1) of the Internal Revenue 
     Code of 1986 (relating to certain business use) is amended by 
     adding at the end the following: ``A portion of a dwelling 
     unit and the exclusive use of such portion otherwise 
     described in this paragraph shall not fail to be so described 
     if such portion is also used by the taxpayer during such 
     exclusive use to care for a dependent of the taxpayer.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1997.
      Subtitle B--Child Care Quality Improvement Incentive Program

     SEC. 211. DEFINITIONS.

       In this subtitle:
       (1) Child care provider.--The term ``child care provider'' 
     means--
       (A) a center-based child care provider, a group home child 
     care provider, a family child care provider, or other 
     provider of non-residential child care services for 
     compensation that--
       (i) is licensed, regulated, registered, or otherwise 
     legally operating under State law; and
       (ii) satisfies the State and local requirements;

     applicable to the child care services it provides; or
       (B) a child care provider that is 18 years of age or older 
     who provides child care services only to eligible children 
     who are, by affinity or consanguinity, or by court decree, 
     the grandchild, great grandchild, sibling (if such provider 
     lives in a separate residence), niece, or nephew of such 
     provider, if such provider does not reside with the child for 
     whom they are providing care and if the provider complies 
     with any applicable requirements that govern child care 
     provided by the relative involved.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

     SEC. 212. ESTABLISHMENT OF STATE PROGRAM.

       (a) In General.--The Secretary shall establish a program to 
     award competitive grants to eligible States to enable such 
     States to carry out activities to improve the quality of 
     child care for children in the States (except children who a 
     tribal organization elects to serve under section 215(b)).
       (b) Awarding of Grants.--
       (1) Distribution.--Amounts appropriated for a fiscal year 
     under section 215(a) shall be distributed through competitive 
     grants awarded to eligible States that apply for funds and 
     that propose activities that meet the requirements of this 
     subtitle.
       (2) Amount.--The amount of a grant awarded to a State under 
     this section shall be determined by the Secretary on a 
     competitive basis, except that the amount of any such grant 
     for a fiscal year shall not be less than

[[Page S7727]]

     an amount equal to .75 percent of the total amount 
     appropriated for the fiscal year under section 215(a).
       (c) Limitation on Administrative Costs.--The Secretary 
     shall not use in excess of 10 percent of the amount 
     appropriated under section 215(a) for a fiscal year for the 
     administrative costs associated with the administration of 
     the program under this section.

     SEC. 213. STATE ELIGIBILITY AND APPLICATION REQUIREMENTS.

       (a) Eligibility.--To be eligible to receive a grant under 
     this subtitle, a State shall certify to the Secretary that 
     the State--
       (1) has not reduced the scope of any State child care 
     standards or requirements that were in effect in calendar 
     year 1995;
       (2) has not limited the State licensing requirements with 
     respect to the types of providers that must obtain licenses 
     in order to provide child care in the State as compared to 
     the types of providers that were required to obtain licenses 
     in calendar year 1995;
       (3) has not otherwise restricted the application of State 
     child care licensing requirements that were in effect in 
     calendar year 1995;
       (4) is in compliance with the requirements applicable to 
     the State under the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9801 et seq.); and
       (5) has, with respect to the fiscal year involved, made 
     available sufficient State matching funds to draw down at 
     least 80 percent of the amount awarded to the State for the 
     preceding fiscal year under a grant under section 418(a)(2) 
     of the Social Security Act (42 U.S.C. 618).
       (b) Priority.--In awarding grants under this subtitle, the 
     Secretary shall give priority to States that contribute an 
     amount (generated from businesses or other private sources) 
     equal to not less than 10 percent of the amount requested 
     under the grant to the activities to be funded under the 
     grant.
       (c) Application.--To be eligible to receive a grant under 
     this subtitle, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary shall require, 
     including--
       (1) an assurance that the State will comply with the 
     requirements applicable to States under this subtitle;
       (2) an assurance that the State will annually conduct on-
     site monitoring of State licensed or regulated child care 
     facilities, with at least 1 unannounced monitoring visit of 
     each such facility every 3 years; and
       (3) an assurance that the State will not use funds received 
     under the grant to supplant or replace funds used by the 
     State to improve the quality or increase the supply of child 
     care as required under section 658G of the Child Care and 
     Development Block Grants Act of 1990 (42 U.S.C. 9858e).

     SEC. 214. USE OF FUNDS BY STATES.

       (a) Required Activities.--A State shall--
       (1) use not less than 20 percent of the amounts received 
     under a grant awarded to the State under this subtitle to 
     establish a subsidy program to provide funds to child care 
     providers who are credentialed in the State (as described in 
     section 2(3));
       (2) use not less than 20 percent of the amounts received 
     under a grant awarded to the State under this subtitle to 
     establish a grant program to assist small businesses located 
     in the State in establishing and operating child care 
     programs that may include--
       (A) technical assistance in the establishment of a child 
     care program;
       (B) assistance for the start-up costs related to a child 
     care program;
       (C) assistance for the training of child care providers;
       (D) scholarships for low-income wage earners;
       (E) the provision of services to care for sick children or 
     to provide care to school aged children;
       (F) the entering into of contracts with local resource and 
     referral or local health departments;
       (G) assistance for any other activity determined 
     appropriate by the State; or
       (H) care for children with disabilities; and
       (3) use amounts remaining after the State reserves funds 
     for activities under paragraphs (1) and (2) to carry out one 
     or more of the activities described in subsection (b).
       (b) Permissible Activities.--A State may use amounts 
     provided under a grant awarded under this subtitle to the 
     State to--
       (1) improve parental choice through consumer education 
     efforts in the State concerning child care, including the 
     expansion of resource and referral services and improving 
     State child care complaint systems;
       (2) establish a scholarship program for child care 
     providers to assist in meeting the educational or training 
     costs associated with the accreditation or credentialing;
       (3) expand State-based child care training and technical 
     assistance activities;
       (4) develop criteria for State recognition of entities to 
     accredit facilities, and credential child care providers, in 
     the State, as described in section 2;
       (5) provide increased rates of reimbursement under Federal 
     or State child care assistance programs for child care that 
     is provided by credentialed child care professionals or at 
     accredited child care centers;
       (6) provide differential rates of reimbursement under 
     Federal or State child care assistance programs for children 
     with special needs; or
       (7) purchase special equipment or supplies or other provide 
     for the payment of other extraordinary expenses required for 
     the care of special needs (including disabled) children and 
     the distribution of such equipment or supplies to child care 
     providers serving special needs children.
       (c) Small Business and Child Care Grant Program.--
       (1) Application.--To be eligible to receive assistance from 
     a State under a grant program established under subsection 
     (a)(2), a small business shall prepare and submit to the 
     State an application at such time, in such manner, and 
     containing such information as the State may require.
       (2) Preference.--
       (A) In general.--In providing assistance under a grant 
     program under this subsection, a State shall give priority to 
     applicants that desire to form consortium to provide child 
     care in geographic areas within the State where such care is 
     not generally available or accessible.
       (B) Consortium.--For purposes of subparagraph (A), a 
     consortium shall be made up of 2 or more entities which may 
     include businesses, nonprofit agencies or organizations, 
     local governments, or other appropriate entities.
       (3) Limitation.--With respect to grant funds received for 
     purposes of this subsection, a State may not provide in 
     excess of $50,000 in assistance from such funds to any single 
     applicant. A State may not provide assistance under a grant 
     to more than 10 entities.
       (4) Matching requirement.--To be eligible to receive funds 
     for purposes of establishing a grant program under subsection 
     (a)(2), a State shall provide assurances to the Secretary 
     that, with respect to the costs to be incurred by an entity 
     receiving assistance in carrying out activities under such 
     program, such entity will make available (directly or through 
     donations from public or private entities) non-Federal 
     contributions to such costs in an amount equal to--
       (A) for the first fiscal year in which the entity receives 
     such assistance, not less than 25 percent of such costs ($1 
     for each $3 of assistance provided to the entity under the 
     grant);
       (B) for the second fiscal year in which an entity receives 
     such assistance, not less than 33\1/3\ percent of such costs 
     ($1 for each $2 of assistance provided to the entity under 
     the grant); and
       (C) for the third fiscal year in which an entity receives 
     such assistance, not less than 50 percent of such costs ($1 
     for each $1 of assistance provided to the entity under the 
     grant).
       (5) Requirements of providers.--To be eligible to receive 
     assistance under a grant awarded under this subsection a 
     child care provider shall comply with all applicable State 
     and local licensing and regulatory requirements and all 
     applicable health and safety standards in effect in the 
     State.
       (6) Administration.--
       (A) State responsibility.--A State shall have 
     responsibility for administering the grants awarded under 
     this subsection and for monitoring entities that receive 
     assistance under such grants.
       (B) Audits.--A State shall require that each entity 
     receiving assistance under a grant awarded under this 
     subsection conduct of an annual audit with respect to the 
     activities of the entity. Such audits shall be submitted to 
     the State.
       (C) Misuse of funds.--
       (i) Repayment.--If the State determines, through an audit 
     or otherwise, that an entity receiving assistance under a 
     grant awarded under this subsection has misused such 
     assistance, the State shall notify the Secretary of such 
     misuses. The Secretary, upon such a notification, may seek 
     from such an entity the repayment of an amount equal to the 
     amount of any misused assistance plus interest.
       (ii) Appeals process.--The Secretary shall by regulation 
     provide for an appeals process with respect to repayments 
     under this subparagraph.
       (d) Limitation on Administrative Costs.--Not more than 10 
     percent of the aggregate amount of funds available to a State 
     under this subtitle in each fiscal year may be expended for 
     administrative costs incurred by such State to carry out 
     activities under this subtitle. As used in the preceding 
     sentence, the term ``administrative costs'' shall not include 
     the costs of providing direct services (as such direct 
     services costs are defined for purposes of the Child Care and 
     Development Block Grant Act of 1990 42 U.S.C. 9801 et seq.)).

     SEC. 215. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this subtitle $260,000,000 for each of the fiscal 
     years 1998 through 2002.
       (b) Reservation.--The Secretary shall reserve not more than 
     1.5 percent of the funds appropriated under this section for 
     a fiscal year to make grants under this subtitle to tribal 
     organizations submitting applications under section 213(b) to 
     be used in accordance with section 214.
    Subtitle C--Distribution of Information About Quality Child Care

     SEC. 221. EXPANSION OF ROLE OF THE DEPARTMENT OF HEALTH AND 
                   HUMAN SERVICES IN THE COLLECTION AND 
                   DISSEMINATION OF INFORMATION AND TECHNOLOGY.

       (a) Provision of Information.--The Secretary of Health and 
     Human Services, directly or through a contract awarded on a 
     competitive basis to a qualified entity, shall provide 
     technical assistance and collect and disseminate information 
     concerning the importance of high quality child care to 
     States,

[[Page S7728]]

     units of local government, private non-profit child care 
     organizations, child care credentialing or accreditation 
     entities, child care providers, and parents, including, in 
     partnership with the Advertising Council or other 
     professional advertising group, a public awareness campaign 
     promoting quality child care.
       (b) Grant Program.--
       (1) In general.--The Secretary of Health and Human 
     Services, acting through the National Child Care Information 
     Center, shall award competitive grants to child care 
     credentialing or accreditation entities (as defined in 
     section 2(2)) that have been providing credentialing or 
     accreditation services for child care providers for not more 
     than 10 years.
       (2) Application.--To be eligible to receive a grant under 
     this subsection, a child care credentialing or accreditation 
     entity shall prepare and submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary shall require.
       (3) Use of funds.--Amounts provided under a grant awarded 
     under paragraph (1) shall be used by grantees to refine and 
     evaluate the procedures and methods used by such grantees in 
     accrediting facilities as accredited child care centers or 
     providing child care credentials to individual child care 
     providers. Such procedures and methods shall be designed to 
     ensure that the highest quality child care is provided by 
     accredited child care centers and credentialed individuals, 
     to provide information about the accreditation or 
     credentialing process to providers, and to provide subsidies 
     to needy individuals and organizations to enable such 
     individuals and organization to participate in the 
     accreditation or credentialing process.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of the fiscal years 1998 through 2002.

     SEC. 222. CHILD CARE TRAINING INFRASTRUCTURE.

       (a) Definitions.--In this section:
       (1) Child care provider.--The term ``child care provider'' 
     has the meaning given the term in section 211.
       (2) Elementary school; secondary school.--The terms 
     ``elementary school'' and ``secondary school'' have the 
     meanings given the terms in section 14101 of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 8001).
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 1201(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1141(a)).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (5) Training site.--The term ``training site'' means a 
     training site described in subsection (e)(1).
       (b) Grant.--The Secretary shall make a grant to an eligible 
     organization to develop and operate a technology-based child 
     care training infrastructure, in order to facilitate--
       (1) the accreditation of facilities as accredited child 
     care centers and accredited family child care homes;
       (2) the credentialing of individuals as credentialed child 
     care professionals; and
       (3) the dissemination of child care, child development, and 
     early childhood education information and research to child 
     care providers.
       (c) Use of Funds.--An organization that receives a grant 
     under subsection (b) shall use the funds made available 
     through the grant to--
       (1) develop partnerships, to the maximum extent possible, 
     with elementary schools, secondary schools, institutions of 
     higher education, Federal, State, and local government 
     agencies, and private entities, to share equipment, technical 
     assistance, and other technological resources, for the 
     development of the infrastructure described in subsection 
     (b);
       (2) enter into arrangements with entities for the provision 
     of sites from which the infrastructure will disseminate 
     training;
       (3) ensure the establishment of at least 2 of the training 
     sites in each State, and additional training sites based on 
     the populations and geographic considerations of States;
       (4) enter into arrangements with child care credentialing 
     or accreditation entities that are recognized (as described 
     in section 2(2)) by more than 1 State agency or tribal 
     organization, for the development of child care training to 
     be disseminated through the infrastructure;
       (5) provide, directly or through a contract (which may for 
     good cause be a sole source contract), expertise to convert 
     training courses for distance transmission, provide 
     interactive environments, and conduct registration, testing, 
     electronic storage of information, and such other technology-
     based activities to adapt and enhance training course content 
     consistent with the medium of transmission involved through 
     the infrastructure;
       (6) provide, through a logistical scheduling mechanism, 
     equitable access to the infrastructure for all child care 
     credentialing or accreditation entities described in 
     paragraph (4) that request an opportunity to disseminate 
     child care training through the infrastructure and meet the 
     requirements of this section;
       (7) develop and implement a mechanism for participants in 
     the training to evaluate the infrastructure, including 
     providing comments on the accessibility and affordability of 
     the training, and recommendations for improvements in the 
     training;
       (8) develop and implement a monitoring system to provide 
     data on the training provided through the infrastructure, 
     including data on--
       (A) the number of facilities and individuals participating 
     in the training;
       (B) the number of facilities receiving accreditation 
     (including a repeat accreditation) as accredited child care 
     centers, and individuals receiving credentialing (including a 
     repeat credentialing) as credentialed child care 
     professionals, after fulfilling requirements that include 
     participation in the training;
       (C) the number of accredited child care centers, and 
     credentialed child care professionals, participating in the 
     training; and
       (D) the number of sites in which the training is received, 
     analyzed--
       (i) by State; and
       (ii) by location in an urban, suburban, or rural area; and
       (9) establish and operate the child care training revolving 
     fund described in section 223.
       (d) Eligibility.--To be eligible to receive the grant, an 
     organization shall be an organization that--
       (1) is a private, nonprofit entity that is not--
       (A) a child care credentialing or accreditation entity;
       (B) a subsidiary or affiliate of a child care credentialing 
     or accreditation entity; or
       (C) an entity that has a subsidiary or affiliate that is a 
     child care credentialing or accreditation entity;
       (2) has experience in developing partnerships with child 
     care credentialing or accreditation entities, institutions of 
     higher education, and State and local governments, for the 
     provision of child care training;
       (3) has experience in providing and coordinating the 
     provision of child care training to family child care 
     providers and center-based child care providers;
       (4) is related to child care provider support organizations 
     in 35 or more States, through membership in a common 
     organization, affiliation, or another mechanism;
       (5) has experience in working with rural and urban child 
     care provider support organizations and child care providers; 
     and
       (6) has experience in working with national child care 
     groups and organizations, including Federal government 
     agencies, providers of child care training, child care 
     credentialing or accreditation entities, and educational 
     groups.
       (e) Application.--To be eligible to receive a grant under 
     subsection (b), an organization shall submit an application 
     to the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require, including--
       (1) information describing, and indicating a preliminary 
     count of the number of, the sites from which the 
     infrastructure will disseminate training;
       (2) an assurance that the organization will require that--
       (A) each child care credentialing or accreditation entity 
     that disseminates training through the infrastructure will 
     provide, during at least 60 percent of the dissemination 
     period, an opportunity for participants in the training--
       (i) to interact with an identified trainer or training 
     leader at the training site; or
       (ii) to elect to engage in other interactive training; and
       (B) no child care credentialing or accreditation entity may 
     collect fees for participation in the training that total 
     more than--
       (i) the cost to the entity for developing, conducting, and 
     providing materials for, the training; minus
       (ii) the amount that the entity receives under this section 
     or from any other source to develop, conduct, and provide 
     materials for, the training; and
       (3) information demonstrating that the organization will 
     comply with the organizational structure requirements of 
     subsections (g) and (h), including a copy of the bylaws 
     described in subsection (g)(2)(B).
       (f) Development and Operation of Infrastructure.--
       (1) Contracts.--An organization that receives a grant under 
     subsection (b) may use funds made available through the grant 
     to enter into contracts, which may for good cause be sole 
     source contracts, for the development of the technological 
     and logistical aspects of the infrastructure. The 
     organization shall enter into such a contract with an entity 
     with experience in establishing technology-based interactive 
     educational or training programs.
       (2) Time Lines.--
       (A) Board, personnel, and revolving fund.--Not later than 6 
     months after the date of receipt of the grant, the 
     organization shall establish the governing board described in 
     subsection (g), appoint a Chief Executive Project Officer 
     described in subsection (h), and establish and operate the 
     child care training revolving fund described in section 223. 
     Not later than 1 year after the date of receipt of the grant, 
     the Chief Executive Project Officer shall appoint the 
     personnel described in subsection (h).
       (B) Training sites.--
       (i) 50 percent operational.--Not later than 3 years after 
     the date of receipt of the grant, the organization shall 
     disseminate training at 50 percent of the sites described

[[Page S7729]]

     in the information submitted under subsection (e)(1).
       (ii) 75 percent operational.--Not later than 4 years after 
     the date of receipt of the grant, the organization shall 
     disseminate training at 75 percent of the sites.
       (iii) 90 percent operational.--Not later than 5 years after 
     the date of receipt of the grant, the organization shall 
     disseminate training at 90 percent of the sites.
       (C) Evaluation.--The organization shall develop and 
     implement the mechanism for conducting evaluations of the 
     infrastructure described in subsection (c)(6) not later than 
     3 years after the date of receipt of the grant.
       (g) Governing Board.--
       (1) In general.--An organization that receives a grant 
     under subsection (b) shall establish a governing board.
       (2) Composition.--
       (A) In general.--The governing board shall be composed of 
     representatives of child care credentialing or accreditation 
     entities that are recognized (as described in section 2(2)) 
     by more than 1 State agency or tribal organization. The 
     representatives shall be appointed by the entities. The 
     composition of the governing board shall be specified in the 
     bylaws of the board.
       (B) Initial bylaws.--The organization shall develop the 
     initial bylaws of the board. The bylaws shall include 
     provisions specifying the manner in which representatives of 
     all child care credentialing or accreditation entities 
     described in subparagraph (A) that are disseminating training 
     through the infrastructure shall participate in the 
     activities of the governing board. The provisions shall 
     provide for the participation through rotation of the 
     representatives in the membership of the board, involvement 
     of the representatives in committees of the board, or through 
     other mechanisms that ensure, to the maximum extent possible, 
     fair and equal participation of the representatives.
       (C) Amended bylaws.--The governing board may amend the 
     bylaws with the consent of the chief executive officer of the 
     organization receiving a grant under subsection (b). The 
     chief executive officer shall give the consent unless the 
     chief executive officer demonstrates good cause for refusal 
     of the consent. Any amended bylaws shall provide for the 
     participation of representatives of all child care 
     credentialing or accreditation entities described in 
     subparagraph (A) that are disseminating training through the 
     infrastructure, as described in subparagraph (B).
       (3) Duties.--The governing board, with oversight by the 
     chief executive officer of the organization, shall--
       (A) advise the organization on the development and 
     operation of the child care training infrastructure;
       (B) review and approve the strategic plan described in 
     subsection (h)(2)(A) and annual updates of the plan;
       (C) review and approve the proposal described in subsection 
     (h)(2)(B), with respect to the contracts, financial 
     assistance, standards, policies, procedures, and activities 
     referred to in such subsection; and
       (D)(i) review, and advise the Chief Executive Project 
     Officer regarding, the actions of the Chief Executive Project 
     Officer with respect to the personnel of the governing board, 
     and with respect to such standards, policies, procedures, and 
     activities as are necessary or appropriate to carry out this 
     section; and
       (ii) inform the Chief Executive Project Officer of any 
     aspects of the actions of the Chief Executive Project Officer 
     that are not in compliance with the annual strategic plan 
     referred to in subparagraph (B) or the proposal referred to 
     in subparagraph (C), or are not consistent with the 
     objectives of this section.
       (h) Chief Executive Project Director and Personnel.--
       (1) In general.--
       (A) Chief executive project director.--The chief executive 
     officer of an organization that receives a grant under 
     subsection (b) shall appoint, compensate, and terminate the 
     employment of a Chief Executive Project Officer to enable the 
     governing board to perform its duties. The chief executive 
     officer of the organization shall consult with the governing 
     board before appointing, changing the compensation of, or 
     terminating the employment of, the Chief Executive Project 
     Officer.
       (B) Personnel.--The Chief Executive Project Officer shall 
     appoint, compensate, and terminate the employment of such 
     additional personnel as may be necessary to enable the 
     governing board to perform its duties.
       (2) Duties of chief executive project officer.--The Chief 
     Executive Project Officer shall--
       (A) prepare and submit to the governing board and the chief 
     executive officer of the organization a strategic plan every 
     3 years, and annual updates of the plan, with respect to the 
     development and major operations of the infrastructure;
       (B)(i) prepare and submit to the governing board and the 
     chief executive officer of the organization a proposal with 
     respect to such contracts and other financial assistance, and 
     such standards, policies, procedures, and activities, as are 
     necessary or appropriate to carry out this section; and
       (ii) after receiving and reviewing an approved proposal 
     under subsection (g)(3)(C), enter into such contracts and 
     award such other financial assistance, and establish and 
     administer such standards, policies, procedures and 
     activities, as are necessary or appropriate to carry out this 
     section;
       (C) prepare and submit to the governing board and the chief 
     executive officer of the organization an annual report, and 
     such interim reports as may be necessary, describing the 
     major actions of the Chief Executive Project Officer with 
     respect to the personnel of the governing board, and with 
     respect to the standards, policies, procedures, and 
     activities; and
       (D) inform the governing board and the chief executive 
     officer of the organization of, and provide an explanation to 
     the governing board regarding, any substantial differences 
     regarding the implementation of this section between--
       (i) the actions of the Chief Executive Project Officer; and
       (ii)(I) the strategic plan approved by the governing board 
     and the chief executive officer of the organization under 
     subsection (g)(3)(B); or
       (II) the proposal approved by the governing board and the 
     chief executive officer of the organization under subsection 
     (g)(3)(C).
       (i) Corporation.--The organization may establish a 
     nonprofit corporation containing the governing board, Chief 
     Executive Project Officer, and personnel, to carry out this 
     section.
       (j) Administrative Costs.--Prior to the date on which the 
     organization disseminates training at 75 percent of the sites 
     described in the information submitted under subsection 
     (e)(1), the organization may use not more than 25 percent of 
     the funds made available through the grant to pay for the 
     administrative costs of carrying out this section. Effective 
     on that date, the organization may use not more than 15 
     percent of the funds to pay for the administrative costs.
       (k) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of fiscal years 1998 through 2003.

     SEC. 223. CHILD CARE TRAINING REVOLVING FUND.

       (a) Establishment.--
       (1) In general.--The Chief Executive Project Officer 
     described in section 222(h) shall use not less than 10 
     percent of the funds made available through the grant made 
     under section 222 during the 5 years after the date of 
     receipt of the grant to establish and operate a child care 
     training revolving fund (referred to in this section as the 
     ``Fund'')--
       (A) from which the Chief Executive Project Officer shall 
     make loans to eligible borrowers for the purpose of enabling 
     the persons to purchase computers, satellite dishes, and 
     other equipment that will be used to disseminate training 
     through the infrastructure described in section 222; and
       (B) into which all payments, charges, and other amounts 
     collected from loans made under subparagraph (A) shall be 
     deposited notwithstanding any other provision of law.
       (2) Separate account.--The Fund shall be maintained as a 
     separate account. Any portion of the Fund that is not 
     required for expenditure shall be invested in obligations of 
     the United States or in obligations guaranteed or insured by 
     the United States.
       (3) Interest earned.--The interest earned on the 
     investments shall be credited to and form a part of the Fund.
       (b) Eligible Borrowers.--To be eligible to receive a loan 
     under subsection (a), a borrower shall be a child care 
     provider who seeks to receive training through the 
     infrastructure or an entity that has entered into an 
     arrangement with the Chief Executive Project Officer to 
     provide a training site (as defined in section 222) for the 
     infrastructure.
       (c) Application.--To be eligible to receive a loan under 
     subsection (a), a borrower shall submit an application to the 
     Chief Executive Project Officer at such time, in such manner, 
     and containing such information as the Chief Executive 
     Project Officer, in consultation with the governing board and 
     the chief executive officer of an organization receiving a 
     grant under section 222(b) may require. At a minimum, the 
     application shall include--
       (1) an assurance that the person shall use the equipment 
     funded through the loan to receive or disseminate training 
     through the infrastructure, for such period as the Secretary 
     may by regulation prescribe; and
       (2) an assurance that the person shall permit other persons 
     to use the equipment to receive or disseminate training 
     through the infrastructure, for such period as the Secretary 
     may by regulation prescribe.
       (d) Loans.--In making loans under subsection (a), the Chief 
     Executive Project Officer shall--
       (1) to the maximum extent practicable, equitably distribute 
     the loans among borrowers in the various States, and among 
     borrowers in urban, suburban, and rural areas; and
       (2) take into consideration the availability to the 
     borrowers of resources from sources other than the Fund, 
     including the availability of resources through the 
     partnerships described in section 222(c)(1).
       (e) Terms and Conditions.--
       (1) Conditions.--The Chief Executive Project Officer may 
     make a loan to a borrower under subsection (a) only if the 
     Chief Executive Project Officer determines that--
       (A) the borrower is unable to obtain resources from other 
     sources on reasonable terms and conditions; and
       (B) there is a reasonable prospect that the borrower will 
     repay the loan.
       (2) Terms.--A loan made under subsection (a) shall be--
       (A) for a term that does not exceed 4 years; and
       (B) at no interest.

[[Page S7730]]

       (3) Collateral.--The Chief Executive Project Officer may 
     require any borrower of a loan made under subsection (a) to 
     provide such collateral as the Chief Executive Project 
     Officer determines to be necessary to secure the loan.
       (4) Procedures and definitions.--Prior to making loans 
     under subsection (a), the Chief Executive Project Officer 
     shall establish written procedures and definitions pertaining 
     to defaults and collections of payments under the loans which 
     shall be subject to the review and approval of the Secretary. 
     The governing board and chief executive officer of the 
     organization involved shall provide to each applicant for a 
     loan under subsection (a), at the time application for the 
     loan is made, a written copy of the procedures and 
     definitions.
       (f) Defaults.--
       (1) Notice.--The Chief Executive Project Officer shall 
     provide the governing board and the chief executive officer 
     of the organization at regular intervals written notice of 
     each loan made under subsection (a) that is in default and 
     the status of the loan.
       (2) Action.--
       (A) Notification.--After making reasonable efforts to 
     collect all amounts payable under a loan made under 
     subsection (a) that is in default, the Chief Executive 
     Project Officer shall notify the governing board and the 
     chief executive officer of the organization that the loan is 
     uncollectable or collectible only at an unreasonable cost. 
     The notification shall include recommendations for future 
     action to be taken by the Chief Executive Project Director.
       (B) Instructions.--On receiving the notification, the 
     governing board and the chief executive officer of the 
     organization shall advise the Chief Executive Project 
     Officer--
       (i) to continue with its collection activities;
       (ii) to cancel, adjust, compromise, or reduce the amount of 
     the loan; or
       (iii) to modify any term or condition of the loan, 
     including any term or condition relating to the time of 
     payment of any installment of principal, or portion of 
     principal, that is payable under the loan.
       (g) Administration and Assistance.--
       (1) In general.--Consistent with section 222(j), the Chief 
     Executive Project Officer shall, out of funds available in 
     the Fund--
       (A) pay expenses incurred by the Chief Executive Project 
     Officer in administering the Fund; and
       (B) provide competent management and technical assistance 
     to borrowers of loans made under subsection (a) to assist the 
     borrowers to achieve the purposes of the loans.
       (2) Assistance by the secretary.--The Secretary shall 
     provide to the chief executive officer of the organization 
     and the Chief Executive Project Officer such management and 
     technical assistance as the chief executive officer of the 
     organization and the Chief Executive Project Officer may 
     request in order to carry out the provisions of this section.
       (h) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary to carry out the objectives 
     of this section, including regulations involving reporting 
     and auditing.
 Subtitle D--Quality Child Care Through Federal Facilities and Programs

     SEC. 231. PROVIDING QUALITY CHILD CARE IN FEDERAL FACILITIES.

       (a) Definition.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of General Services.
       (2) Executive agency.--The term ``Executive agency'' has 
     the meaning given the term in section 105 of title 5, United 
     States Code, but does not include the Department of Defense.
       (3) Executive facility.--The term ``executive facility'' 
     means a facility that is owned or leased by an Executive 
     agency.
       (4) Federal agency.--The term ``Federal agency'' means an 
     Executive agency, a judicial office, or a legislative office.
       (5) Judicial facility.--The term ``judicial facility'' 
     means a facility that is owned or leased by a judicial 
     office.
       (6) Judicial office.--The term ``judicial office'' means an 
     entity of the judicial branch of the Federal Government.
       (7) Legislative facility.--The term ``legislative 
     facility'' means a facility that is owned or leased by a 
     legislative office.
       (8) Legislative office.--The term ``legislative office'' 
     means an entity of the legislative branch of the Federal 
     Government.
       (b) Executive Branch Standards and Enforcement.--
       (1) State and local licensing requirements.--
       (A) In general.--The Administrator shall issue regulations 
     requiring any entity operating a child care center in an 
     executive facility to comply with applicable State and local 
     licensing requirements related to the provision of child 
     care.
       (B) Compliance.--The regulations shall require that, not 
     later than 6 months after the date of enactment of this Act--
       (i) the entity shall comply, or make substantial progress 
     (as determined by the Administrator) toward complying, with 
     the requirements; and
       (ii) any contract for the operation of such a child care 
     center shall include a condition that the child care be 
     provided in accordance with the requirements.
       (2) Accreditation standards.--
       (A) In general.--The Administrator shall issue regulations 
     specifying child care center accreditation standards and 
     requiring any entity operating a child care center in an 
     executive facility to comply with the standards.
       (B) Compliance.--The regulations shall require that, not 
     later than 3 years after the date of enactment of this Act--
       (i) the entity shall comply, or make substantial progress 
     (as determined by the Administrator) toward complying, with 
     the standards; and
       (ii) any contract for the operation of such a child care 
     center shall include a condition that the child care be 
     provided by an entity that complies with the standards.
       (C) Contents.--The standards shall base accreditation on--
       (i) an accreditation instrument described in section 
     2(2)(B);
       (ii) outside monitoring described in section 2(2)(B), by--

       (I) the Administrator; or
       (II) a child care credentialing or accreditation entity, or 
     other entity, with which the Administrator enters into a 
     contract to provide such monitoring; and

       (iii) the criteria described in section 2(2)(B).
       (3) Evaluation and enforcement.--
       (A) In general.--The Administrator shall evaluate the 
     compliance of entities described in paragraph (1) with the 
     regulations issued under paragraphs (1) and (2). The 
     Administrator may conduct the evaluation of such an entity 
     directly, or through an agreement with another Federal 
     agency, other than the Federal agency for which the entity is 
     providing child care. If the Administrator determines, on the 
     basis of such an evaluation, that the entity is not in 
     compliance with the regulations, the Administrator shall 
     notify the Executive agency.
       (B) Termination of agency provision of child care or 
     contract.--On receipt of the notification--
       (i) if the entity operating the child care center involved 
     is the agency, the agency shall terminate the direct 
     provision of child care by the agency; and
       (ii) if the entity operating the child care center is a 
     contractor, the agency shall terminate the contract of the 
     entity to operate the center.
       (C) Cost reimbursement.--The Administrator may require 
     Executive agencies to reimburse the Administrator for the 
     costs of carrying out subparagraph (A) with respect to 
     entities operating child care centers for the agencies. If an 
     entity described in paragraph (1) operates a child care 
     center for 2 or more Executive agencies, the Administrator 
     shall allocate the costs of providing such reimbursement 
     among the agencies in a fair and equitable manner, based on 
     the extent to which each agency is eligible to place children 
     in the center.
       (c) Legislative Branch Standards and Enforcement.--
       (1) State and local licensing requirements and 
     accreditation standards.--The Architect of the Capitol shall 
     issue regulations for entities operating child care centers 
     in legislative facilities, which shall be the same as the 
     regulations issued by the Administrator under paragraphs (1) 
     and (2) of subsection (b), except to the extent that the 
     Architect may determine, for good cause shown and stated 
     together with the regulations, that a modification of such 
     regulations would be more effective for the implementation of 
     the requirements and standards described in such paragraphs.
       (2) Evaluation and enforcement.--Subsection (b)(3) shall 
     apply to the Architect of the Capitol, entities operating 
     child care centers in legislative facilities, and legislative 
     offices. For purposes of that application, references in 
     subsection (b)(3) to regulations shall be considered to be 
     references to regulations issued under this subsection.
       (d) Judicial Branch Standards and Enforcement.--
       (1) State and local licensing requirements and 
     accreditation standards.--The Director of the Administrative 
     Office of the United States Courts shall issue regulations 
     for entities operating child care centers in judicial 
     facilities, which shall be the same as the regulations issued 
     by the Administrator under paragraphs (1) and (2) of 
     subsection (b), except to the extent that the Director may 
     determine, for good cause shown and stated together with the 
     regulations, that a modification of such regulations would be 
     more effective for the implementation of the requirements and 
     standards described in such paragraphs.
       (2) Evaluation and enforcement.--Subsection (b)(3) shall 
     apply to the Director described in paragraph (1), entities 
     operating child care centers in judicial facilities, and 
     judicial offices. For purposes of that application, 
     references in subsection (b)(3) to regulations shall be 
     considered to be references to regulations issued under this 
     subsection.
       (e) Application.--Notwithstanding any other provision of 
     this section, if 3 or more child care centers are operated in 
     facilities owned or leased by a Federal agency, the head of 
     the Federal agency may carry out the responsibilities 
     assigned to the Administrator under subsection (b)(3)(A), the 
     Architect of the Capitol under subsection (c)(2), or the 
     Director described in subsection (d)(2) under such 
     subsection, as appropriate.
       (f) Technical Assistance.--The Administrator may provide 
     technical assistance to Executive agencies, and to entities 
     operating child care centers in executive facilities, in 
     order to assist the entities in complying

[[Page S7731]]

     with this section. The Architect of the Capitol and the 
     Director of the Administrative Office of the United States 
     Courts may provide, or request that the Administrator 
     provide, technical assistance to legislative offices and 
     judicial offices, respectively, and to entities operating 
     child care centers in legislative facilities and judicial 
     facilities, respectively, in order to assist the entities in 
     complying with this section.
       (g) Council.--The Administrator shall establish an 
     interagency council, comprised of all Federal agencies 
     described in subsection (e), to facilitate cooperation and 
     sharing of best practices, and to develop and coordinate 
     policy, regarding the provision of child care in the Federal 
     Government.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $900,000 for 
     fiscal year 1998 and each subsequent fiscal year.

     SEC. 232. PROVIDING QUALITY CHILD CARE THROUGH FEDERAL 
                   PROGRAMS.

       (a) Corporation for National and Community Service.--
     Effective October 1, 2001, the Chief Executive Officer of the 
     Corporation for National and Community Service shall ensure 
     that, to the maximum extent practicable, any child care made 
     available under any Federal financial assistance program 
     carried out by the Chief Executive Officer, directly or 
     through a child care allowance, shall be child care provided 
     by an accredited child care center or a credentialed child 
     care professional, as the terms are defined in section 2.
       (b) Departments of Education, Housing and Urban 
     Development, Justice, and Labor.--Effective October 1, 2001, 
     the Secretary of Education, Secretary of Housing and Urban 
     Development, Attorney General, and Secretary of Labor shall 
     ensure that, to the maximum extent practicable, any child 
     care made available under any Federal financial assistance 
     program carried out by the Attorney General or Secretary 
     involved, directly or through a child care allowance, shall 
     be child care provided by an accredited child care center or 
     a credentialed child care professional, as the terms are 
     defined in section 2.
       (c) Social Services Block Grants.--Section 2002(a) of the 
     Social Security Act (42 U.S.C. 1397a(a)) is amended by adding 
     at the end the following:
       ``(3) Effective October 1, 2001, child care services made 
     available under this subsection shall, to the maximum extent 
     practicable, be child care services provided by an accredited 
     child care center or a credentialed child care professional, 
     as the terms are defined in section 2 of the CIDCARE Act.''.

     SEC. 233. USE OF COMMUNITY DEVELOPMENT BLOCK GRANTS TO 
                   ESTABLISH ACCREDITED CHILD CARE CENTERS.

       Section 105(a) of the Housing and Community Development Act 
     of 1974 (42 U.S.C. 5305(a)) is amended--
       (1) in paragraph (22), by striking ``and'' at the end;
       (2) in paragraph (23), by striking the period at the end 
     and inserting a semicolon;
       (3) in paragraph (24), by striking ``and'' at the end;
       (4) in paragraph (25), by striking the period at the end 
     and inserting ``; and''; and
       (5) by adding at the end the following:
       ``(26) the establishment of accredited child care centers 
     (as that term is defined in section 2 of the CIDCARE Act), by 
     upgrading existing child care facilities to meet standards 
     for accredited child care centers, or by renovating existing 
     structures for use as accredited child care centers.''.
                  Subtitle E--Miscellaneous Provisions

     SEC. 241. STUDENT LOAN REPAYMENT AND CANCELLATION FOR CHILD 
                   CARE WORKERS.

       (a) Stafford Loan Repayment.--Section 428J of the Higher 
     Education Act of 1965 (20 U.S.C. 1078-10) is amended--
       (1) in the section heading by striking ``and nurses'' and 
     inserting ``, nurses and child care workers'';
       (2) in subsection (a)(1), by striking ``and nursing 
     profession'' and inserting ``, nursing and child care 
     professions'';
       (3) in subsection (b)(1)--
       (A) in subparagraph (B)(ii), by striking ``or'' after the 
     semicolon;
       (B) in subparagraph (C), by striking the period and 
     inserting ``; or''; and
       (C) by adding at the end the following:
       ``(D) is employed full time providing child care services, 
     and possesses a certificate or degree in early childhood 
     education or development.''; and
       (4) in subsection (g)--
       (A) in paragraph (1), by striking ``and community service'' 
     and inserting ``community service, and child care''; and
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``and community 
     service'' and inserting ``community service, and child 
     care''; and
       (ii) in subparagraph (D), by striking ``and community 
     service'' and inserting ``community service, and child 
     care''.
       (b) Perkins Loan Cancellation.--Section 465(a)(2) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087ee(a)(2)) is 
     amended--
       (1) in subparagraph (H), by striking ``or'' after the 
     semicolon;
       (2) in subparagraph (I), by striking the period and 
     inserting ``; or''; and
       (3) by inserting after subparagraph (I) the following:
       ``(J) as a full-time employee who provides child care 
     services and possesses a certificate or degree in early 
     childhood education or development.''.

     SEC. 242. EXPANSION OF COORDINATED ENFORCEMENT EFFORTS OF 
                   INTERNAL REVENUE SERVICE AND HHS OFFICE OF 
                   CHILD SUPPORT ENFORCEMENT.

       (a) State Reporting of Custodial Data.--Section 
     454A(e)(4)(D) of the Social Security Act (42 U.S.C. 
     654(e)(4)(D)) is amended by striking ``the birth date of any 
     child'' and inserting ``the birth date and custodial status 
     of any child''.
       (b) Matching Program by IRS of Custodial Data and Tax 
     Status Information.--
       (1) National directory of new hires.--Section 453(i)(3) of 
     the Social Security Act (42 U.S.C. 653(i)(3)) is amended by 
     striking ``a claim with respect to employment in a tax 
     return'' and inserting ``information which is required on a 
     tax return''.
       (2) Federal case registry of child support orders.--Section 
     453(h) of the such Act (42 U.S.C. 653(h)) is amended by 
     adding at the end the following:
       ``(3) Administration of federal tax laws.--The Secretary of 
     the Treasury shall have access to the information described 
     in paragraph (2), consisting of the names and social security 
     numbers of the custodial parents linked with the children in 
     the custody of such parents, for the purpose of administering 
     those sections of the Internal Revenue Code of 1986 which 
     grant tax benefits based on support and residence provided 
     dependent children.''
       (c) Minimum Past-Due Support Threshold for Use of Offset 
     Procedure.--
       (1) Part d families.--Section 464(b)(1) of the Social 
     Security Act (42 U.S.C. 664(b)(1)) is amended by inserting 
     ``(not to exceed $150)'' after ``minimum amount''.
       (2) Other families.--Section 464(b)(2)(A) of such Act (42 
     U.S.C. 664(b)(2)(A)) is amended by striking ``$500'' both 
     places it appears and inserting ``$150''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1997.

  Mr. DODD. Mr. President, it is my pleasure today to join my colleague 
from Vermont, Senator Jeffords, as we introduce the Creating Improved 
Delivery of Child Care: Affordable, Reliable, and Educational (CIDCARE) 
Act of 1997.
  This legislation will go a long way toward giving parents peace of 
mind. Child care shouldn't be like going to Las Vegas--where you roll 
the dice and hope for the best. Parents should be confident that when 
they are not able to be with their children, their children will still 
be well cared for. We shouldn't be gambling with our children's health 
and safety.
  Up to this point Mr. President, we in the federal government have 
largely deferred the issue of quality of child care to the states. The 
sole significant contribution of the federal government to improving 
the quality of this nation's child care is the modest 4% setaside for 
quality improvement that we struggled to create within the child care 
development block grant. This lack of federal support for quality has 
not served children well.
  A few years ago my good friend, Professor Ed Zigler of Yale 
University, did a survey of state child care regulations. He found, in 
short, that states are failing the ``quality test''--no state had child 
care regulations in place that could be characterized as good quality 
standards. Only a third of states had minimally acceptable regulations. 
Two-thirds of states had regulations that didn't even address the 
basics--caregiver training, safe environments, appropriate provider-
child ratios.
  Keep in mind, we're not even talking about how well or whether states 
actually enforced those standards. This study was simply asking a 
question about the first step in quality--whether states had basic 
child care quality standards on the books that providers could be held 
to. This legislation addresses, for the first time on a federal level, 
the issues of quality child care. We have safety standards for the food 
we eat and the cars we drive. Is it too much to have some basic 
standards for child care providers--individuals who literally hold a 
child's life in their hands? I think not, Mr. President. And even 
beyond basic health and safety standards, we must consider how we can 
assist caregivers in supporting children's growth and development.
  Mr. President, this legislation will help working families afford 
child care. Specifically, this bill more equitably distributes the 
child care tax credit by making the credit refundable for lower income 
families, increasing the credit for families under $55,000, and phasing 
down the credit to a minimum of 10% for higher income taxpayers. 
Further, it increases the amount that employees can contribute to 
Dependent Care Assistance Plans (DCAP).

[[Page S7732]]

  The CIDCARE bill further provides incentives for parents to choose 
high quality child care by providing a higher tax credit and larger 
DCAP allowances for families that use accredited or credentialed 
services, reflecting the higher expenses associated with higher quality 
care.
  Additionally, this legislation encourages child care centers and 
providers to offer high quality child care. It gives child care 
providers a higher deduction for the educational expenses related to 
achieving or maintaining accreditation. It further provides $50 million 
to create and operate a technology-based training infrastructure, that 
builds upon existing distance learning, Internet, and satellite 
resources, to enable child care providers nationwide to receive 
training, education, and support. It also provides loan forgiveness for 
Perkins and Stafford educational loans for child care workers who 
obtain a degree in early childhood education or receive professional 
child care credentials. This bill would also require federal child care 
centers to meet all state and local licensing and other regulatory 
requirements related to the provision of child care.
  This legislation will also give businesses incentives to support 
quality child care for their employees and the community at large. It 
will allow businesses a charitable deduction for donating educational 
equipment to non-profit child care providers, support entities, and 
public schools and provides a tax credit for employers who develop 
child care centers for their employees.
  Finally, Mr. President, the CIDCARE bill will provide grants to 
states to support quality child care. It establishes a $260 million 
competitive grant program to assist states in improving the quality of 
child care through mechanisms such as: salary increases for 
credentialed child care providers: developing standards for the 
accreditation and credentialing of child care providers; scholarship 
programs to help child care providers meet the costs of education and 
training; expanding training and technical assistance activities; 
consumer education efforts, and increased rates of reimbursement for 
the care of children with special needs.
  Mr. President, quality child care can no longer be considered a 
luxury reserved for the very few. This should not be a partisan issue. 
All of us want the best for our children. And when they can't be with 
their parents, we want them to be in high quality care. This 
legislation will move us in that direction. I urge my colleagues to 
join Senator Jeffords and myself in support of the CIDCARE bill.

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