[Congressional Record Volume 144, Number 2 (Wednesday, January 28, 1998)]
[Senate]
[Pages S115-S123]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CHAFEE (for himself, Mr. Hatch, Ms. Snowe, Mr. Roberts, 
        Mr. Specter and Ms. Collins):
  S. 1577. A bill to amend the Internal Revenue Code of 1986 to provide 
additional tax relief to families to increase the affordability of 
child care, and for other purposes; to the Committee on Finance.


                      THE CARING FOR CHILDREN ACT

  Mr. CHAFEE. Mr. President, I am pleased today to introduce the Caring 
for Children Act, legislation to help all families with their child 
care needs.

  I want to thank my colleagues who have worked so hard to put this 
bill together. Senator Hatch, who was a leader in the development of 
the child care block grant, and is always a stalwart supporter of 
children. Senator Snowe, who has worked on this issue for many years. 
Senator Roberts, who has taken an active interest in this issue. 
Senator Specter, who made an enormous contribution to the development 
of this bill. And Senator Susan Collins, who we are very fortunate to 
have on our child care proposal.
  Last night, in his State of the Union Address to the nation, 
President Clinton issued a challenge to Congress to develop child care 
legislation in a bipartisan manner with the Administration. Well, that 
is exactly what we are doing today.
  Our proposal is straightforward and far-reaching. It makes the 
current child care credit more equitable for lower and middle income 
families. And, for the first time, makes the credit available to 
families where one parent stays at home to care for the children. That 
is a critical step and an important change for families across America.
  Raising children in today's world is a true challenge. In many 
families, both parents must work in order to support the family. Often, 
the child care expenses consume all or most of one parent's income. How 
often do we hear the refrain, particularly from women, that after they 
pay for day care, there is little or nothing left of their wages.
  Another common complaint is from parents who desperately want to stay 
home and raise their children themselves--especially in those very 
critical, early years of childhood--but who simply cannot afford to 
forego that second income.
  The legislation we are introducing today responds to both of these 
concerns. We believe that parents should make their own decisions about 
who is going to care for their children. The government and the tax 
code should not be promoting one choice over another.
  By making more of the existing child care tax credit available to 
lower and middle income families, and making it available also to 
families where one parent stays at home, we are sending the message 
that the choice is yours, and we support your choice.
  Our bill makes several changes to the existing dependent care tax 
credit.

[[Page S116]]

First, the maximum credit percentage is increased from 30 percent to 50 
percent to provide more benefits to those most in need. Second, the 
income level at which the maximum credit begins to be reduced is moved 
from $10,000 to $30,000, so that more lower-income families will 
qualify for the maximum amount of assistance. Third, we propose to 
completely phase out the credit for wealthier families. Finally, 
families where one spouse stays at home to care for the children will 
be eligible for a credit similar to the one they would receive if both 
parents were working outside the home and the child was in daycare.
  We also acknowledge that we cannot solve the entire child care 
problem through the tax code alone. Many low-income families do not 
have taxable income, and therefore cannot benefit from a tax credit. 
The Child Care and Development Block Grant (CCDBG) provides critical 
funding to help these lower-income families--and I have been a strong 
supporter of the program. Recognizing the critical role CCDBG plays in 
subsidizing daycare for low-income families in the states, our proposal 
doubles the block grant over a five-year period.
  Of course, the problem with child care is not limited to just 
affordability. Many parents cannot find an available child care slot. 
Our proposal addresses this issue of accessibility by providing a tax 
credit to businesses to build or renovate on or near-site child care 
centers for their employees.
  Finally, there is the issue of quality daycare. Parents cannot be 
productive in the workplace if they are constantly worrying about the 
health and safety of their children in daycare. We have all read the 
horrifying stories in the newspapers about daycare facilities that are 
unsafe or unsanitary, about the poor record of enforcement of standards 
in many states.
  while we acknowledge that the federal government should not be 
setting standards for daycare providers, we do believe the states 
should set at least minimum health and safety standards and enforce 
them rigorously. Our legislation beefs up this enforcement by rewarding 
states with a good enforcement record and penalizing those with poor 
records.
  I am very proud of this legislation, and proud that this group was 
able to come together and produce this initiative. Child care is a 
problem that must be solved, and we are committed to doing that. I look 
forward to working with the President and my colleagues in the Congress 
to find workable, affordable solutions for all families.
  Mr. President, 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. 1577

       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 ``Caring for 
     Children Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

        TITLE I--TAX RELIEF TO INCREASE CHILD CARE AFFORDABILITY

Sec. 101. Expansion of dependent care tax credit.
Sec. 102. Promotion of dependent care assistance programs.
Sec. 103. Allowance of credit for employer expenses for child care 
              assistance.

                TITLE II--ENCOURAGING QUALITY CHILD CARE

   Subtitle A--Dissemination of Information About Quality Child Care

Sec. 201. Collection and dissemination of information.
Sec. 202. Grants for the development of a child care training 
              infrastructure.
Sec. 203. Authorization of appropriations.

 Subtitle B--Increased Enforcement of State Health and Safety Standards

Sec. 211. Enforcement of State health and safety standards.

  Subtitle C--Removal of Barriers to Increasing the Supply of Quality 
                               Child Care

Sec. 221. Increased authorization of appropriations for the Child Care 
              and Development Block Grant Act.
Sec. 222. Small business child care grant program.
Sec. 223. GAO report regarding the relationship between legal liability 
              concerns and the availability and affordability of child 
              care.

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

Sec. 231. Providing quality child care in Federal facilities.
        TITLE I--TAX RELIEF TO INCREASE CHILD CARE AFFORDABILITY

     SEC. 101. EXPANSION OF DEPENDENT CARE TAX CREDIT.

       (a) Percentage of Employment-Related Expenses Determined by 
     Taxpayer Status.--Section 21(a)(2) of the Internal Revenue 
     Code of 1986 (defining applicable percentage) is amended to 
     read as follows:
       ``(2) Applicable percentage defined.--For purposes of 
     paragraph (1), the term `applicable percentage' means 50 
     percent reduced (but not below zero) by 1 percentage point 
     for each $1,500, or fraction thereof, by which the 
     taxpayers's adjusted gross income for the taxable year 
     exceeds $30,000.''.
       (b) Minimum Credit Allowed for Stay-at-Home Parents.--
     Section 21(e) of the Internal Revenue Code of 1986 (relating 
     to special rules) is amended by adding at the end the 
     following:
       ``(11) Minimum credit allowed for stay-at-home parents.--
     Notwithstanding subsection (d), in the case of any taxpayer 
     with one or more qualifying individuals described in 
     subsection (b)(1)(A) under the age of 4 at any time during 
     the taxable year, such taxpayer shall be deemed to have 
     employment-related expenses with respect to such qualifying 
     individuals in an amount equal to the greater of--
       ``(A) the amount of employment-related expenses incurred 
     for such qualifying individuals for the taxable year 
     (determined under this section without regard to this 
     paragraph), or
       ``(B) $150 for each month in such taxable year during which 
     such qualifying individual is under the age of 4.''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 1998.

     SEC. 102. PROMOTION OF DEPENDENT CARE ASSISTANCE PROGRAMS.

       (a) Promotion of Dependent Care Assistance Programs.--The 
     Secretary of Labor shall establish a program to promote 
     awareness of the use of dependent care assistance programs 
     (as described in section 129(d) of the Internal Revenue Code 
     of 1986) by employers.
       (b) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out the program under paragraph 
     (1) $1,000,000 for each of fiscal years 1999, 2000, 2001, and 
     2002.

     SEC. 103. 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:

     ``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 20 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 
     $100,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) 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,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees,
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer, or
       ``(iv) under a contract to provide child care resource and 
     referral services to employees of the taxpayer.
       ``(2) Exclusion for amounts funded by grants, etc.--The 
     term `qualified child care expenditure' shall not include any 
     amount to the extent such amount is funded by any grant, 
     contract, or otherwise by another person (or any governmental 
     entity).
       ``(3) 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--

[[Page S117]]

       ``(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.
       ``(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, 2003.''.
       (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, 
     1998.

     TITLE II--ENCOURAGING QUALITY CHILD CARE

   Subtitle A--Dissemination of Information About Quality Child Care

     SEC. 201. COLLECTION AND DISSEMINATION OF INFORMATION.

       (a) Collection and Dissemination of Information.--The 
     Secretary of Health and Human Services shall, directly or 
     through a contract awarded on a competitive basis to a 
     qualified entity, collect and disseminate--
       (1) information concerning health and safety in various 
     child care settings that would assist--
       (A) the provision of safe and healthful environments by 
     child care providers; and
       (B) the evaluation of child care providers by parents; and
       (2) relevant findings in the field of early childhood 
     learning and development.
       (b) Information and Findings To Be Generally Available.--
       (1) Secretarial responsibility.--The Secretary of Health 
     and Human Services shall make the information and findings 
     described in subsection (a) generally available to States, 
     units of local governments, private nonprofit child care 
     organizations (including resource and referral agencies), 
     employers, child care providers, and parents.
       (2) Definition of generally available.--For purposes of 
     paragraph (1), the term ``generally available'' means that 
     the information and findings shall be distributed through 
     resources that are used by, and available to, the public, 
     including such resources as brochures, Internet web sites, 
     toll-free telephone information lines, and public and private 
     resource and referral organizations.

     SEC. 202. GRANTS FOR THE DEVELOPMENT OF A CHILD CARE TRAINING 
                   INFRASTRUCTURE.

       (a) Authority To Award Grants.--The Secretary of Health and 
     Human Services shall award grants to eligible entities to 
     develop distance learning child care training technology 
     infrastructures and to develop model technology-based 
     training courses for child care providers and child care 
     workers. The Secretary shall, to the maximum extent possible, 
     ensure that grants for the development of distance learning 
     child care training technology infrastructures are awarded in 
     those regions of the United States with the fewest training 
     opportunities for child care providers.
       (b) Eligibility Requirements.--To be eligible to receive a 
     grant under subsection (a), an entity shall--
       (1) develop the technological and logistical aspects of the 
     infrastructure described in this section and have the 
     capability of implementing and maintaining the 
     infrastructure;
       (2) to the maximum extent possible, develop partnerships 
     with secondary schools, institutions of higher education, 
     State and local government agencies, and private child care 
     organizations for the purpose of sharing equipment, technical 
     assistance, and other technological resources, including--
       (A) sites from which individuals may access the training;
       (B) conversion of standard child care training courses to 
     programs for distance learning; and
       (C) ongoing networking among program participants; and
       (3) develop a mechanism for participants to--
       (A) evaluate the effectiveness of the infrastructure, 
     including the availability and affordability of the 
     infrastructure, and the training offered the infrastructure; 
     and
       (B) make recommendations for improvements to the 
     infrastructure.
       (c) Application.--To be eligible to receive a grant under 
     subsection (a), an entity shall submit an application to the 
     Secretary at such time and in such manner as the Secretary 
     may require, and that includes--
       (1) a description of the partnership organizations through 
     which the distance learning programs will be disseminated and 
     made available;
       (2) the capacity of the infrastructure in terms of the 
     number and type of distance learning programs that will be 
     made available;
       (3) the expected number of individuals to participate in 
     the distance learning programs; and

[[Page S118]]

       (4) such additional information as the Secretary may 
     require.
       (d) Limitation On Fees.--No entity receiving a grant under 
     this section may collect fees from an individual for 
     participation in a distance learning child care training 
     program funded in whole or in part by this section that 
     exceed the pro rata share of the amount expended by the 
     entity to provide materials for the training program and to 
     develop, implement, and maintain the infrastructure (minus 
     the amount of the grant awarded by this section).
       (e) Rule of Construction.--Nothing in this section shall be 
     construed as requiring a child care provider to subscribe to 
     or complete a distance learning child care training program 
     made available by this section.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     subtitle $50,000,000 for each of fiscal years 1999 through 
     2003.
 Subtitle B--Increased Enforcement of State Health and Safety Standards

     SEC. 211. ENFORCEMENT OF STATE HEALTH AND SAFETY STANDARDS.

       (a) Identification of State Inspection Rate.--
       (1) In general.--Section 658E(c)(2)(G) of the Child Care 
     and Development Block Grant Act of 1990 (42 U.S.C. 
     9858c(2)(G)) is amended by striking the period and inserting 
     ``, and provide the percentage of completed child care 
     provider inspections that were required under State law for 
     each of the 2 preceding fiscal years.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     applies to State plans under the Child Care and Development 
     Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) on and after 
     September 1, 1998.
       (b) Increased or Decreased Allotments.--Section 658O(b) of 
     the Child Care and Development Block Grant Act of 1990 (42 
     U.S.C. 9858m(b)) is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by inserting ``, subject to paragraph (5),'' after 
     ``shall''; and
       (2) by adding at the end the following:
       ``(5) Increased or decreased allotment based on state 
     inspection rate.--
       ``(A) Increased allotment for fiscal years 1999, 2000, and 
     2001.--
       ``(i) In general.--Subject to clause (iii), for fiscal 
     years 1999, 2000, and 2001, the allotment determined for a 
     State under paragraph (1) for each such fiscal year shall be 
     increased by an amount equal to 10 percent of such allotment 
     for the fiscal year involved with respect to any State--

       ``(I) that certifies to the Secretary that the State has 
     not reduced the scope of any State child care health or 
     safety standards or requirements that were in effect in 
     calendar year 1996; and
       ``(II) that, with respect to the preceding fiscal year, had 
     a percentage of completed child care provider inspections (as 
     required to be reported under section 658E(c)(2)(G)), that 
     equaled or exceeded the target inspection and enforcement 
     percentage specified under clause (ii) for the fiscal year 
     for which the allotment is to be paid.

       ``(ii) Target inspection and enforcement percentage.--For 
     purposes of clause (i)(II), the target inspection and 
     enforcement percentage is--

       ``(I) for fiscal year 1999, 75 percent;
       ``(II) for fiscal year 2000, 80 percent; and
       ``(III) for fiscal year 2001, 100 percent.

       ``(iii) Pro rata reductions if insufficient 
     appropriations.--The Secretary shall make pro rata reductions 
     in the percentage increase otherwise required under clause 
     (i) for a State allotment for a fiscal year as necessary so 
     that the aggregate of all the allotments made under this 
     section do not exceed the amount appropriated for that fiscal 
     year under section 658B.
       ``(B) Decreased allotment for fiscal years 2000 and 2001.--
       ``(i) In general.--The allotment determined for a State 
     under paragraph (1) for each of fiscal years 2000 and 2001 
     shall be decreased by an amount equal to 10 percent of such 
     allotment for the fiscal year involved with respect to any 
     State that, with respect to the preceding fiscal year, had a 
     percentage of completed child care provider inspections (as 
     required to be reported under section 658E(c)(2)(G)) that was 
     below the minimum inspection and enforcement percentage 
     specified under clause (ii) for the fiscal year for which the 
     allotment is to be paid.
       ``(ii) Minimum inspection and enforcement percentage.--For 
     purposes of clause (i), the minimum inspection and 
     enforcement percentage is--

       ``(I) for fiscal year 2000, 50 percent; and
       ``(II) for fiscal year 2001, 75 percent.

       ``(iii) Requirement to expend State funds to replace 
     reduction.--If the allotment determined for a State for a 
     fiscal year is reduced by reason of clause (i), the State 
     shall, during the immediately succeeding fiscal year, expend 
     additional State funds under the State plan funded under this 
     subchapter by an amount equal to the amount of such 
     reduction.''.
  Subtitle C--Removal of Barriers to Increasing the Supply of Quality 
                               Child Care

     SEC. 221. INCREASED AUTHORIZATION OF APPROPRIATIONS FOR THE 
                   CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT.

       Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended to read as follows:

     ``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     subchapter--
       ``(1) for each of fiscal years 1996 through 1998, 
     $1,000,000,000;
       ``(2) for fiscal year 1999, $1,500,000,000;
       ``(2) for fiscal year 2000, $1,750,000,000;
       ``(2) for fiscal year 2001, $2,000,000,000;
       ``(2) for fiscal year 2002, $2,250,000,000; and
       ``(2) for fiscal year 2003, $2,500,000,000.''.

     SEC. 222. SMALL BUSINESS CHILD CARE GRANT PROGRAM.

       (a) Establishment.--The Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall establish a program to award grants to States to assist 
     States in providing funds to encourage the establishment and 
     operation of employer operated child care programs.
       (b) Application.--To be eligible to receive a grant under 
     this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including an assurance that the funds required under 
     subsection (e) will be provided.
       (c) Amount of Grant.--The Secretary shall determine the 
     amount of a grant to a State under this section based on the 
     population of the State as compared to the population of all 
     States.
       (d) Use of Funds.--
       (1) In general.--A State shall use amounts provided under a 
     grant awarded under this section to provide assistance to 
     small businesses located in the State to enable the small 
     businesses to establish and operate child care programs. Such 
     assistance 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) care for children with disabilities; or
       (H) assistance for any other activity determined 
     appropriate by the State.
       (2) Application.--To be eligible to receive assistance from 
     a State under this section, 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.
       (3) Preference.--
       (A) In general.--In providing assistance under this 
     section, a State shall give priority to applicants that 
     desire to form a 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.
       (4) Limitation.--With respect to grant funds received under 
     this section, a State may not provide in excess of $100,000 
     in assistance from such funds to any single applicant.
       (e) Matching Requirement.--To be eligible to receive a 
     grant under this section a State shall provide assurances to 
     the Secretary that, with respect to the costs to be incurred 
     by an entity receiving assistance in carrying out activities 
     under this section, the entity will make available (directly 
     or through donations from public or private entities) non-
     Federal contributions to such costs in an amount equal to--
       (1) for the first fiscal year in which the 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);
       (2) for the second fiscal year in which an entity receives 
     such assistance, not less than 66\2/3\ percent of such costs 
     ($2 for each $1 of assistance provided to the entity under 
     the grant); and
       (3) for the third fiscal year in which an entity receives 
     such assistance, not less than 75 percent of such costs ($3 
     for each $1 of assistance provided to the entity under the 
     grant).
       (f) Requirements of Providers.--To be eligible to receive 
     assistance under a grant awarded under this section a child 
     care provider shall comply with all applicable State and 
     local licensing and regulatory requirements and all 
     applicable health and safety standards in effect in the 
     State.
       (g) Administration.--
       (1) State responsibility.--A State shall have 
     responsibility for administering the grant awarded under this 
     section and for monitoring entities that receive assistance 
     under such grant.
       (2) Audits.--A State shall require each entity receiving 
     assistance under a grant awarded under this section to 
     conduct an annual audit with respect to the activities of the 
     entity. Such audits shall be submitted to the State.
       (3) Misuse of funds.--
       (A) Repayment.--If the State determines, through an audit 
     or otherwise, that an entity receiving assistance under a 
     grant awarded under this section has misused the assistance, 
     the State shall notify the Secretary of the misuse. The 
     Secretary, upon such a notification, may seek from such an 
     entity the repayment of an amount equal to the amount of any 
     misused assistance plus interest.

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       (B) Appeals process.--The Secretary shall by regulation 
     provide for an appeals process with respect to repayments 
     under this paragraph.
       (h) Reporting Requirements.--
       (1) 2-year study.--
       (A) In general.--Not later than 2 years after the date on 
     which the Secretary first provides grants under this section, 
     the Secretary shall conduct a study to determine--
       (i) the capacity of entities to meet the child care needs 
     of communities within a State;
       (ii) the kinds of partnerships that are being formed with 
     respect to child care at the local level; and
       (iii) who is using the programs funded under this section 
     and the income levels of such individuals.
       (B) Report.--Not later than 28 months after the date of 
     enactment of this Act, the Secretary shall prepare and submit 
     to the appropriate committees of Congress a report on the 
     results of the study conducted in accordance with 
     subparagraph (A).
       (2) 4-year study.--
       (A) In general.--Not later than 4 years after the date on 
     which the Secretary first provides grants under this section, 
     the Secretary shall conduct a study to determine the number 
     of child care facilities funded through entities that 
     received assistance through a grant made under this section 
     that remain in operation and the extent to which such 
     facilities are meeting the child care needs of the 
     individuals served by such facilities.
       (B) Report.--Not later than 52 months after the date of 
     enactment of this Act, the Secretary shall prepare and submit 
     to the appropriate committees of Congress a report on the 
     results of the study conducted in accordance with 
     subparagraph (A).
       (i) Definition.--As used in this section, the term ``small 
     business'' means an employer who employed an average of at 
     least 2 but not more than 50 employees on business days 
     during the preceding calendar year.
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $60,000,000 for 
     the period of fiscal years 1999 through 2001. With respect to 
     the total amount appropriated for such period in accordance 
     with this subsection, not more than $5,000,000 of that amount 
     may be used for expenditures related to conducting 
     evaluations required under, and the administration of, this 
     section.
       (k) Termination of Program.--The program established under 
     subsection (a) shall terminate on September 30, 2002.

     SEC. 223. GAO REPORT REGARDING THE RELATIONSHIP BETWEEN LEGAL 
                   LIABILITY CONCERNS AND THE AVAILABILITY AND 
                   AFFORDABILITY OF CHILD CARE.

       Not later than 6 months after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     report to Congress regarding whether and, if so, the extent 
     to which, concerns regarding potential legal liability 
     exposure inhibit the availability and affordability of child 
     care. The report shall include an assessment of whether such 
     concerns prevent--
       (1) employers from establishing on or near-site child care 
     for their employees;
       (2) schools or community centers from allowing their 
     facilities to be used for on-site child care; and
       (3) individuals from providing professional, licensed child 
     care services in their homes.
 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) Evaluation and enforcement.--The Administrator shall 
     evaluate the compliance of the entities described in 
     paragraph (1) with the regulations issued under that 
     paragraph. 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.
       (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 subsection 
     (b)(1), 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)(2) 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)(2) 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 subsection (b)(1), 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)(2) 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)(2) 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)(2), the 
     Architect of the Capitol under subsection (c)(2), or the 
     Director described in subsection (d)(2) under such 
     subsection, as appropriate.

  Mr. SPECTER. Mr. President, I have sought recognition to join my 
colleagues in introducing the ``Caring for Children Act,'' which will 
ease the financial burden of child care for American families--for 
those parents who work, and for those who choose to stay home to raise 
their children for a period of time. The sponsors of this legislation 
recognize the importance of affordable quality child care to the 
successful development of our children.
  Our bill would expand the Dependent Care tax credit to make it more 
accessible to families who need it, double the authorization for the 
Child Care Development Block Grant, and provide grants to small 
businesses to create or enhance child care facilities for their 
employees. This bill also includes provisions from the proposal I 
introduced last year with my colleague, Congressman Jon Fox, ``The 
Affordable Child Care Act,'' which provides a tax credit for employers 
who provide on-site or site-adjacent child care to their employees in 
order to reduce the child care expenses of the employee.
  Not all families choose the same option for child care. Many families 
rely on relatives, centers operated by churches and other religious 
organizations, centers at or near their workplace, or make other 
arrangements to provide care for their children while they work. In 
light of the diverse needs for child care in America, this bill 
represents a good start toward expanding the choices for American 
parents. And, any such legislation must recognize that there is a need 
to provide some relief to families where one parent stays at home.
  The need for affordable and accessible day care is critical given the 
increasing numbers of working parents and dual-income families in the 
United States. According to the Bureau of the Census, in 1975, 31 
percent of married

[[Page S120]]

mothers with a child younger than age one participated in the labor 
force. By 1995, that figure had risen to 59 percent. Almost 64 percent 
of married mothers and 53 percent of single mothers with children 
younger than age six participated in the labor force in 1995.
  The cost of child care for families is also significant. Licensed day 
care centers in some urban areas cost as much as $200 per week, and the 
disparity in costs and availability of child care between urban and 
rural grows greater every day. For families which need or choose to 
have both parents work outside the home, the burden of making child 
care decisions is great. These figures serve to underscore the need for 
action on the part of the Federal government to provide the necessary 
assistance to our nation's working families.
  As Chairman of the Labor, Health and Human Services, and Education 
Appropriations Subcommittee, I am pleased that this legislation would 
build on an existing federal child care program by authorizing an 
additional $5 billion over five years to the Child Care Development 
Block Grant program, bringing total spending for this program to $2.5 
billion annually by FY2002. The CCDBG program which works well in 
assisting low-income families acquire child care and helped over 93,000 
Pennsylvania families last year. By increasing the authorization, we 
can help even more families without creating a new entitlement program.
  Our legislation will also require States to create and enforce safety 
and health standards in child care facilities, and provide money for 
the Department of Health and Human Services to disseminate information 
to parents and providers about quality child care, through brochures, 
toll-free hotlines, the Internet, and other technological assistance.
  The ``Caring for Children Act'' complements my recent efforts to 
assist working families in the context of welfare reform and children's 
health insurance. When Congress debated welfare reform in 1995 and 
1996, I worked to ensure that adequate funds were provided for child 
care, a critical component for welfare mothers who would be required to 
work to receive new limited welfare benefits. I am pleased that the 
welfare reform bill that became law provides $20 billion in child care 
funding over a six year period. Similarly, I was pleased to participate 
in the bipartisan effort in 1997 to enact legislation to provide $24 
billion over the next five years for States to establish or broaden 
children's health insurance programs.
  In conclusion, Mr. President, I believe that it is critical that the 
105th Congress not adjourn without enacting legislation to assist 
families in their ability to afford safe, quality child care for their 
children, either at home with a parent or another arrangement. Our 
legislation will provide peace of mind to millions of American families 
struggling to balance career and child raising. I urge my colleagues to 
join me in cosponsoring this important legislation, and I urge its 
swift adoption.
  Mr. HATCH. Mr. President, eight years ago, Congress passed and 
President Bush signed the landmark Child Care and Development Block 
Grant Act. I was proud to have helped lead the effort, and I am proud 
of what our states have been able to accomplish since its 
implementation.
  But, it is also clear that we must do more to help families. In my 
home state of Utah, more than half of the children under age 6 have 
either their only parent or both parents in the workforce.
  The ``Child Care Connection,'' a four-county resource and referral 
program, reported last year that there were five major Salt Lake area 
zip codes that had zero openings for infants.
  Utah child care officials have reported that there are too few slots 
generally for infants and toddlers and for special needs children.
  It is my pleasure to be here today with Senators Chafee, Snowe, 
Roberts, and Specter, each of whom has a long track record of 
involvement in child care issues. We believe that we have developed a 
comprehensive, yet realistic, child care proposal that will augment the 
ability of the child care block grant to serve families in each state.
  Of particular note, this proposal recognizes the choice that many 
families make to have one parent remain at home as primary caregiver. 
As important as it is to assist low- and middle-income families with 
necessary out-of-home child care expenses--and our proposal will 
increase the Dependent Care Tax Credit for such families--it is also 
important for us to realize the value of a parent in the home and that 
the sacrifice of a second income is also a child care expense.
  Additionally, our proposal will not create major new programs in need 
of permanent funding. We do not intend to spend federal dollars on 
bigger bureaucracy in the name of expanding child care. We want 
available resources to be put directly in the hands of parents through 
tax credits and in the hands of states to address specific gaps in 
availability and enforcement of health and safety standards.
  Our bill takes a very balanced approach to the issues of 
affordability, availability, and quality.
  Child care costs, of course, are a significant part of a family 
budget. The average cost of child care has been estimated at over $4000 
per child. This is a substantial increase from the $3000 average it was 
when we enacted the Child Care and Development Block Grant eight years 
ago. Clearly, low- and middle-income taxpayers devote a larger share of 
their earnings to child care.
  And, at a time when we are trying to move families off of public 
assistance and into employment, child care has to be a key element of 
transitional support.
  Our bill increases the Dependent Care Tax Credit (DCTC) for working 
parents. Our bill raises the maximum credit from 30 percent to 50 
percent. And, it raises the maximum income level for the maximum credit 
from $10,000 to $30,000. No change is made in the maximum allowable 
expenses of $2400 for one child and $4800 for two or more children.
  Thus, a family in St. George, Utah, earning $30,000, with two 
children, would receive a tax credit of $2400. Under current law, this 
family's credit would be $960.
  Both our bill and the proposal made by the Clinton administration 
begin to gradually reduce the percentage of the credit at $30,000, but 
the ``Caring for Children Act'' reduces the credit at a slower rate. 
Thus, families earning between $30,000 and $75,000 will receive a 
bigger tax benefit than under either President Clinton's proposal or 
current law.
  We can afford to provide larger benefits for this income group 
because we have recommended a phase-out of the credit entirely for 
families with incomes of $105,000 or more. Under current law, there is 
no income limit for eligibility for the DCTC. This is one tax credit 
that wealthy taxpayers do not need.
  But, our bill, the ``Caring for Children Act,'' goes one step 
further. The bill I have developed along with Senators Chafee, Snowe, 
Roberts, and Specter would, for the first time, recognize child care 
provided by a parent.

  Our bill would extend eligibility for the Dependent Care Tax Credit 
to families with young children in which one parent remains at home as 
caregiver. How would this work? The bill would impute monthly child 
care expenses of $150 to families with children age 3 and under. For 
example, a family in Morgan, Utah, earning $30,000 a year and having 
one or more children under age 3, would receive a $900 tax credit. It 
works this way: 50% credit $150 monthly imputed expenses 12 months = 
$900.
  I would like to see this tax break be even more generous. I will work 
toward that end. But, given our budget realities, this ground-breaking 
extension of the DCTC is feasible. And, I believe it is an essential 
component of the ``Caring for Children Act.''
  It is high time we recognize the value of stay-at-home parents. This 
tax credit in no way offsets their work or their monetary sacrifices; 
but it does, at last, give a mother or father in the home standing in 
our tax code. It transforms the Dependent Care Tax Credit from an 
employment-based credit to a child-based credit.
  These two changes to the DCTC will put money--their own money I might 
add--back into the pockets of America's families.
  The ``Caring for Children Act'' also deals with the issue of 
availability. As I mentioned, there are areas where child care--
particularly infant care,

[[Page S121]]

after school care, or care for special needs children--is tough to 
find. The substantial increase we are recommending for the Child Care 
and Development Block Grant (CCDBG) will provide states with the 
ability to address shortages as well as to increase support to low-
income families.
  President Clinton has recommended solving the availability problem by 
creating two new programs, one for after school care and one geared to 
early childhood. While I can appreciate the President's concern that 
there may be few choices out there for parents who depend on out-of-
home care, I do not believe it makes sense to create new programs when 
the CCDBG already permits such programs. I think the answer is not to 
second guess how the states have chosen to allocate their scarce 
resources under the block grant, but rather to give the states some 
additional resources so that they can better meet their own priorities.
  We are proposing a $5 billion increase in the CCDBG over five years. 
These additional resources will give states much more flexibility in 
their planning. States will be able to provide subsidies for a greater 
number of the eligible population; they will be able to finance child 
care programs in underserved areas of the state; they will be able to 
address particular shortages. And, they will be able to better enforce 
critical health and safety standards.
  I am a firm believer that states should be able to set their own 
rules and regulations for child care providers. I do not believe that 
the federal government can or should interfere with child care 
affordability in our various states by setting national standards that 
are unrealistic. Moreover, to the extent that child care standards 
reflect the values as well as the economic conditions of any given 
state, the federal government has no business micromanaging them.
  But, I also believe that states that participate in the block grant 
program--and that would be all of them--have an obligation to ensure 
that children are in safe and healthy environments. And, they have an 
obligation to see that such standards are adequately enforced. A 
sanitary standard is no standard at all if it is unenforced.
  It may not matter where you have your car washed, but it absolutely 
matters who is taking care of your child.
  Therefore, the ``Caring for Children Act'' puts some teeth into the 
requirement for inspections under the block grant. A state that 
inspects a threshold number of facilities subject to inspection will be 
eligible for a 10 percent bonus. After the second year, a state failing 
to inspect a minimum number of child care sites will be subject to a 10 
percent penalty.
  Additionally, our bill authorizes $50 million a year for HHS to 
undertake two important quality enhancing activities. First, more 
information about child care can be made available to parents. Consumer 
information about automobiles, credit cards, and well-baby care are 
available. I believe parents would welcome more information on what to 
look for in a child care center or family-based care setting. I also 
believe that parents are the best form of accountability in child care. 
Second, to assist providers and child care workers enhance the quality 
of their services, the bill would enable HHS to award grants for the 
development of a technology infrastructure for distance learning.
  Many child care providers are in rural areas. Traditional training in 
the form of workshops and college classes are not practical. Programs 
for child care providers that could be developed and made available 
through distance learning, however, could prove a viable alternative as 
well as a valued help. My home state of Utah, I might add, has been a 
leader in the distance learning arena. I have no doubt that such a 
format would be eagerly received in my state.
  The ``Caring for Children Act'' contains several other provisions of 
interest. In order to test the effectiveness of small business 
consortia as employer-based child care providers, the bill authorizes 
$60 million over three years for demonstration grants.
  To increase the awareness of the existing Dependent Care Assistance 
Program (DCAP), a tax provision that permits employees to authorize 
their employers to withhold up to $5000 of the employee's salary in a 
DCAP account for child care expenses to be paid by the employer, the 
``Caring for Children Act'' authorizes $1 million a year for the next 
five years to the Secretary of Labor to conduct outreach to both 
employers and employees about this program and its benefits.
  Finally, the bill would require that child care facilities located in 
federal buildings for federal employees be held to the same quality 
standards that apply to child care programs in the state in which the 
federal facility is located.
  I believe the measure we have introduced is a balanced approach. It 
does not depend entirely on the tax code to address child care issues, 
nor does it depend solely on federal spending.
  It does not concentrate benefits on only one income group. The DCTC 
expansion is geared particularly to assist the middle class. The 
increase in the CCDBG is targeted to subsidies for low-income families.
  It recognizes that we have to make an investment in our children, but 
it does not propose new federal mandatory spending programs that can 
become wildly expensive.
  Our bill gives careful attention to each of the three cornerstones of 
child care: affordability, availability, and quality.
  And, for the first time, federal child care legislation will not 
ignore those families who choose to forego one income to have a parent 
remain at home.
  I want to say again that I am proud to sponsor this bill with my 
colleagues, Senators Chafee, Snowe, Roberts, and Specter. I urge other 
senators to join us in this legislation.
  Mr. ROBERTS. Mr. President, I am pleased and honored to join with my 
colleagues to introduce legislation to help meet the child care 
challenges facing families around the nation. Our bill is entitled the 
``Caring for Children Act.''
  Child care, in the home when possible and outside the home when both 
parents work, goes right to the heart of keeping families strong. 
Unfortunately, finding quality, affordable child care is one of the 
most pressing problems for families in Kansas and around the country.
  The ``Caring for Children Act'' takes the first steps to address this 
challenge through a responsible approach. This legislation expands 
child care opportunities without expanded government costs or intrusion 
in our lives. This legislation builds into the existing network without 
adding more government intervention or mandates. This legislation will 
help families that have two working parents and families that have a 
stay-at-home parent. This legislation will help to increase the supply 
of quality of child care.
  First, in order to provide additional tax relief and increase 
affordability of child care, we expand the Dependent Care Tax Credit 
(DCTC) by raising the income level to $30,000 at which families become 
eligible for the maximum tax credit. We also raise the maximum 
percentage of child care expenses that parents can deduct to 50 
percent. These changes make the DCTC more realistic for families that 
face increasing child care costs.
  Increasing the income level and the percentage of child care expenses 
that are deductible will help families where both parents work. But, we 
also recognize that families who choose to have one parent remain at 
home have child care expenses as well. Therefore, we extend eligibility 
for the DCTC to families with a stay-at-home parent. This provides 
greater options to more families and leaves child care choices where 
they should be--with the family. In order to target this credit to 
parents who need it the most and meet our fiscal responsibilities, the 
credit is phased out for higher income wage earners.
  Small businesses play a critical role in providing child care options 
to millions of working parents. Unfortunately, small businesses 
generally do not have the resources required to start up and support a 
child care center. The ``Caring for Children Act'' includes a short-
term, flexible grant program to encourage small businesses to work 
together to provide child care services for employees. This program is 
more of a demonstration project that will sunset at the end of three 
years. In the meantime, small businesses will be eligible for grants up 
to $100,000 for start-up costs, training, scholarships, or other 
related activities. Businesses

[[Page S122]]

must continue to meet state quality and health standards. Businesses 
will be required to match federal funds to encourage self-sustaining 
facilities well into the future.
  ``Caring for Children'' also includes provisions to provide a tax 
credit of expenses up to $500,000 for employers who choose to 
construct, renovate, or operate on- or near-site child care facilities 
for their employees. And, ``Caring for Children'' includes funding to 
promote greater availability of the Dependent Care Assistance Program 
(DCAP) for families with children. This will allow the Department of 
Labor to conduct outreach to businesses to promote awareness of the 
DCAP program.
  All children deserve quality care. Although all states have health 
and safety standards in place, many times these regulations are not 
enforced. ``Caring for Children'' includes incentives for states to 
improve their inspection efforts and ensure that facilities are in 
compliance with their own state standards. The bill also authorizes 
funding for the Department of Health and Human Services to get more 
information in the hands of parents and help child care providers 
access child care training programs.
  Finally, we authorize additional funding for the Child Care and 
Development Block Grant. This program sends federal assistance to 
states, permitting them to allocate resources where they are most 
needed in the state. We maintain maximum flexibility and allow states 
to make decisions about how to address their own child care challenges.
  Child care is an issue that impacts each and every one of us. While 
parents continue to struggle to meet the constant demand of work and 
family, we must continue to do our part to expand child care options 
and protect our nation's most valuable resource, our children. I look 
forward to working with all of my colleagues in this important effort.
  Ms. SNOWE. Thank you, Mr. President, I am pleased to join with my 
colleagues, Senators Hatch, Roberts, Specter, and Chafee to introduce a 
bill that I believe is an historic opportunity to help ensure the well-
being of our children and by extension the very well-being of our 
nation: the Caring for Children Act.
  I come before you as a veteran on child care issues who has worked to 
address child care throughout my political life, and was the lead 
Republican cosponsor on the Act for Better Child Care in 1989--the bill 
which set the stage for the bipartisan package that was adopted by the 
101st Congress. Since that time we have advanced the ball in profound 
ways that reflect the changing nature of the American family, but our 
work must never cease when it comes to our children. We must build on 
our laurels, not rest on them: and that is precisely what this bill 
does.
  Consider the challenge: In California alone in 1997, 500,000 children 
were already on waiting lists for federal child care in--half a 
million! Now, it is estimated that, as welfare reform proceeds, some 2 
million parents across America will join the workforce and their 
children will require child care. A GAO report from May of last year 
determined that in Chicago, for example, the known supply of child care 
would only meet 14 percent of the need for infant child care in the 
first year of welfare reform implementation. And within three years, 3 
out of 4 American women with children under 5 will be working and in 
need of child care.
  With the perspective of years spent on this issue, I have come to the 
conclusion that what American parents need most are choices. The 
decision of how to care for a young child is a deeply personal and 
difficult one. Many feel handcuffed by economic concerns, others worry 
about the safety of child care, but all face different circumstances 
that make the decision making process unique.
  Given the tremendous challenges of raising children today, and the 
extraordinary range of issues facing families, I believe the federal 
government should not be in the business of encouraging one choice over 
another. Instead the government's role must be to ensure that families 
have viable options and that the basis for decisions is the best 
interests of the child. If we are to care about children we must care 
about choices, and not politicize the issue with partisanship or 
ideology.
  That is the spirit in which we crafted our bill. Because it is not 
about pitting one group against another. It is not about starting a 
``mommy war''. It is about helping parents do the best they can for 
their children--no matter what choice they make.
  The reality is that, despite our best efforts to date to make 
quality, affordable child care accessible, the myriad pressures facing 
American families today still imperil their ability to provide the best 
possible care for their children. In my home state of Maine, one out of 
every five Mainers are working multiple jobs. Across the country, 63 
percent of women with children under age six are in the workforce, and 
as a result, over 12 million children are cared for by someone other 
than a parent during working hours. In Maine, there are 42,000 women in 
the labor force with children under 6, and 64,000 with children between 
the ages of 6 and 17.
  At the same time, child care costs can range from $4,000 to $9,000 
annually--with families earning less than $14,000 per year paying more 
than one quarter of their income in child support. As a result, 
families are often forced to make a choice between two unacceptable 
options: find care for their children that may not be safe or 
appropriate, or stay home and hope that they can somehow still put food 
on the table.
  Our bill respects parents' decisions and expands the choices 
available in a number of innovative ways. By expanding the Dependent 
Care Tax Credit, we make it more affordable for parents to choose 
quality child care, but we also leave the door open for a parent to 
stay at home with their child. And we target our tax benefits to those 
who need them most: working American families.
  For two-working parent families with child care expenses, we raise 
the income level at which parents can take the maximum credit from 
$10,000 to $30,000, allowing more parents to take advantage of the 
maximum tax credit. In addition, we raise the percentage of child care 
expenses that parents can put toward their credit to 50% (up from 40% 
under current law) of expenses up to $2400 for one child, or $4800 for 
two or more children. The credit will phase down 1% for every $1500 of 
income above $30,000, phasing out completely for families earning over 
$105,000 per year. Under this new scheme, the maximum tax credit will 
be $1200 for one child (up from $720), or $2400 for two or more 
children (up from $480).
  For the first time, parents who forgo an income to stay at home to 
take care of a child between the ages of 0-3 will be able to take 
advantage of the Dependent Care Tax Credit. By attributing child care 
expenses to stay at home parents of $150 per month, they will be 
eligible for a maximum tax credit of up to $900 per year, depending on 
their income. Applying the tax credit to parents who wish to stay 
home for children ages 0-3 acknowledges that parents of infants and 
toddlers often face the toughest decisions between working or staying 
at home, particularly in light of recent research in the area of early 
childhood development which demonstrates that care from one or two 
consistent, loving and stimulating caregivers during these earliest 
years is crucial to brain development.

  The Caring for Children Act will also help defray the considerable 
costs of child care for low-income families by doubling funding for the 
Child Care and Development Block Grant, to the time of $5 billion. This 
will create more child care slots for low-income families and double 
the amount of money devoted to improving quality, again leaving more 
options for parents.
  And we also address the issue safety, because parents are still 
rightfully concerned about safety. According to a US News and World 
Report article last August, a query of all 50 states and the District 
of Columbia revealed that 76 children died in day care in 1996. The 
causes included drownings, falls, and being struck by automobiles. And 
these numbers are low because, shockingly, some states do not even 
track day care deaths. In terms of oversight, the US News report 
revealed that in Virginia, for example, the state had failed to make 
mandatory twice-a-year inspections of 722 of its 4,200 licensed 
facilities in 1996; 159 centers were not visited even once.
  No parents should have to fear for their child's safety--no parent 
should

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ever get that dreaded call that their child was hurt at day care. 
Bringing a young child to day care in the morning should not be an act 
of faith--it should be an act of confidence. While states have the 
responsibility to set health and safety standards, states need to be 
held accountable for enforcing these standards by adhering to the 
inspection-schedule that they establish under state law. Accordingly, 
our bill provides a 10 percent bonus in CCDBG funding to states that 
meet targeted inspection rates, while penalizing those by 10 percent 
that don't meet their existing responsibility to ensure health and 
safety. This gives our bill ``teeth'' to ensure that child care is safe 
and children are protected.
  Finally, we encourage more American businesses to become partners in 
child care by offering then tax credits for child care operation, 
construction and renovation expenses up to $500,000. And recognizing 
that it is not always feasible for small businesses to assist with 
child care, we offer grants to small employers to provide such care. 
Businesses already have an incentive to provide child care in that 
parents who are confident in their child care arrangements are more 
reliable, productive workers. These initiatives will not only create 
more slots and make child care more affordable for parents and 
businesses alike, but it will help literally bring care closer to more 
parents.
  In closing, let me emphasize that this bill is an investment in our 
nation's future. It is a statement by the federal government that there 
can be no greater cause--no more noble a purpose than providing for our 
children. How a nation raises its youth and the value it places on 
giving children a chance to grow up safe, happy, and healthy speaks 
volumes to its greatness. This legislation won't make decisions easier 
for parents but it will ensure that they have a full range of options 
available to them as they seek to do the very best they can for their 
children. That's why I'm proud to be here today and that's why I will 
work hard to ensure the passage of the Caring for Children Act. Thank 
you.
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