[Congressional Record Volume 145, Number 39 (Thursday, March 11, 1999)]
[Senate]
[Pages S2592-S2598]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CHAFEE (for himself, Mr. Hatch, Mr. Cochran, Ms. Snowe, 
        Mr. Roberts, Mr. Specter, and Ms. Collins):
  S. 599. 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 Senators Susan Collins and Thad Cochran, who we are 
very fortunate to have on our child care proposal.
  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 
forgo 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. 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 my colleagues in the Congress to find workable, 
affordable solutions for all families. I ask unanimous consent that the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 599

       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.

[[Page S2593]]

  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 2000, 2001, 2002, and 
     2003.

     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--
       ``(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 S2594]]

       ``(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
       (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 2000 through 
     2004.

 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, 1999.
       (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 2000, 2001, and 
     2002.--
       ``(i) In general.--Subject to clause (iii), for fiscal 
     years 2000, 2001, and 2002, 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 as of 
     December 31, 1998; 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 2000, 75 percent;
       ``(II) for fiscal year 2001, 80 percent; and
       ``(III) for fiscal year 2002, 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 2001 and 2002.--
       ``(i) In general.--The allotment determined for a State 
     under paragraph (1) for each of fiscal years 2001 and 2002 
     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 2001, 50 percent; and
       ``(II) for fiscal year 2002, 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

[[Page S2595]]

     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 fiscal year 1999, $1,182,672,000;
       ``(2) for fiscal year 2000, $1,500,000,000;
       ``(3) for fiscal year 2001, $1,750,000,000;
       ``(4) for fiscal year 2002, $2,000,000,000;
       ``(5) for fiscal year 2003, $2,250,000,000; and
       ``(6) for fiscal year 2004, $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.
       (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 2000 through 2002. 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, 2003.

     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) Definitions.--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.--

[[Page S2596]]

       (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. HATCH. Mr. President, as this decade nears a close, and as our 
Nation has enjoyed an unprecedented period of economic growth, there 
remains an issue that affects many American families. I am referring to 
child care.
  It has been nearly 9 years since the passage of the bipartisan Child 
Care and Development Block Grant Act. I was proud to have been a 
sponsor of this legislation, and I remain committed to its goals, 
structure, and principles.
  Though the CCDBG has led to great improvements in the child care 
situation facing low-income families in every State, it has become 
clear that more needs to be done to help the family. In my home State 
of Utah, an extraordinary 57 percent of mothers with children under the 
age of 6 are in the labor force, and 134,000 children under the age of 
6 in Utah will be cared for by someone other than their parents.
  I am pleased to again join my colleagues--Senators Chafee, Snowe, 
Roberts, Specter, Collins, and Cochran--each of whom has a long record 
of concern and involvement in child care issues--in sponsoring this 
measure. The Caring for Children Act is a comprehensive, realistic 
child care proposal, which we believe will benefit middle- and lower-
income American families who struggle to get ahead or struggle to keep 
up.
  First, the Caring for Children Act will, by expanding the Dependent 
Care Tax Credit, cut taxes for many middle- and lower-income families. 
Under the current system, the maximum credit of 30 percent is available 
only to families with incomes of $10,000 or less. Our proposal 
increases the Dependent Care Tax Credit (DCTC) from 30 percent to 50 
percent. The maximum income is also increased to $30,000. The maximum 
allowable expenses of $2,400 for one child and $4,800 for two or more 
children will remain the same.
  For example, a working family in Vernal, UT, earning $30,000 with two 
children, could receive a tax credit of $2,400 (50 percent of $4,800), 
instead of $960 under the current law.
  Our bill also lowers the maximum credit more gradually than current 
law. This provides a form of tax relief for DCTC-eligible families 
earning between $30,000 and $75,000. This change is intended to benefit 
an often forgotten group--taxpayers who earn too much for Federal 
breaks but not enough for child care expenses not to be a big bite out 
of their budget.
  This proposal also breaks new ground. It recognizes, for the first 
time, as a matter of Federal child care policy, that many families 
elect to have one parent remain at home to serve as the primary are 
giver. We understand the value of a parent at home to care for a child, 
both in terms of quality of care and monetary sacrifice. Such families 
pay for their child care by forfeiting a second income. The Caring for 
Children Act would expand eligibility for the Dependent Care Tax Credit 
(DCTC) to families with young children in which one parent remained at 
home.
  Our bill assumes child care expenses for such a family of $150 per 
month. Thus, a family earning $30,000 with two children, ages 3 and 1, 
in Farmington, UT, in which one parent remains at home, would receive a 
tax credit of $900 (50 percent of $15012 months).
  Some have criticized our bill for not giving the same tax benefits to 
families with a stay-at-home parent. Frankly, I support such parity in 
the DCTC. I would like our bill to be able to provide a larger credit. 
But, expanding eligibility for this credit is an expensive proposition. 
While we may not be able to propose DCTC parity in one fell swoop, we 
should establish the concept in this bill and increase the level of 
benefit as quickly as we can. But, we should not fail to do something 
just because we cannot do it all.
  Many families across America elect to forego a second income in order 
to have a parent remain at home with children. Federal policy has so 
far failed to recognize parental care as child care, even if many 
people, myself included, consider it the best possible care. I happen 
to believe that parental care is the best care there is.
  And, let me offer a word of praise and gratitude for my wife, Elaine. 
Elaine could have had a successful career as a professional educator. 
Instead, she chose to stay home with our children--all of whom are now 
married with children of their own.
  Of course, my daughters and daughters-in-law will make their own 
choices about balancing career and family. Different families make 
different choices and face different circumstances that drive their 
choices. Our bill asserts that the Dependent Care Tax Credit should be 
available to families regardless of their choice. The DCTC should be a 
tax credit to help families care for children, not just a credit for 
employment expenses. We should not minimize the significance of this 
change in the federal child care paradigm.

  Yet, many working but low-income families have no tax liability and 
will not benefit from our proposed changes to the DCTC. These families, 
many of which may be headed by single parents or headed by individuals 
moving from welfare to work, are struggling to make ends meet.
  One of the family's biggest expenses is child care.
  The cost of child care, like almost everything else, has increase in 
the 9 years since the implementation of the Child Care and Development 
Block Grant. When the CCDBG was enacted, the average cost of care per 
child was $3,000. Today, it is estimated to be more than $4,000 per 
child.
  I invite senators to do the math: If a parent is making $10 an hour 
($20,800 per year before taxes) and has just one child, child care 
expenses claim almost

[[Page S2597]]

one-fifth of the family budget. It is no wonder that the Utah Child 
Protective Services told me some years ago about a mother who was 
forced to choose between groceries and child care.
  The Caring for Children Act proposes to increase the authorization of 
appropriations for the Child Care and Development Block grant Act 
(CCDBG), which states use to subsidize child care for low-income 
parents and to develop new capacity in areas--both geographic and 
functional--where there are shortages.
  In Utah, as in other states as well, smaller and more rural 
communities often have shortages of child care. And, nearly every 
community suffers shortages of infant care, after school care, and care 
for special needs children.
  The CCDBG is the only federal program we have for assisting low-
income working families with child care expenses. We are not proposing 
to create another one. We are not expanding the statutory eligibility 
or entitlement for this program. The Caring for Children Act merely 
makes it possible for states to serve more eligible people and to 
address more of the problem of shortages under the provisions of the 
CCDBG.
  I have said many times in this body that I do not support federal 
assistance for those who are able but do not help themselves. But, I 
likewise believe that some help is warranted when people are working 
and doing all they can to provide for their families. This is why I 
joined as a sponsor of the Child Care and Development Block Grant 10 
years ago. I do not want Utah families to have to choose between child 
care and food.
  We still face issues of quality of care. Our bill affirms state 
prerogatives to set their own standards for child care. My colleagues 
are well aware of my strong opposition to any federal effort to set or 
imply federal standards. States must be allowed discretion in this. 
But, our bill also recognizes that standards are worthless if they are 
not enforced.
  To encourage states to make a stronger commitment to enforce their 
own standards for child care, the Caring for Children Act provides a 
system of bonuses for states who exceed a threshold of inspections or, 
conversely, penalties for those who fail to conduct a minimum number of 
inspections. In my view, the most stringent standards in the world do 
not provide any assurance of quality care if providers do not believe 
standards will be enforced.
  I also believe that the best assurance of quality is a parent's own 
good judgment. The Caring for Children Act takes the very inexpensive, 
but potentially very productive step of providing funds for beefed up 
consumer information to parents.
  There are other important provisions in our bill that are designed to 
encourage private sector initiatives in child care as well as to 
enhance training opportunities for child care providers.
  All together, the Caring for Children Act attempts to address all 
three of the major issues in child care: affordability, availability, 
and quality. I believe the bill we are introducing today is measured 
and responsible.
  In no way is this a government knows best model of social problem 
solving; rather, it builds on what we already know works and what we 
already know that parents want. They want resources and information to 
make their own decisions and to care for their own children. They want 
input into the plans developed by states. They want control over child 
care.
  The bill we are introducing today endeavors to put government on the 
side of parents by returning resources to them through tax credits, by 
enabling states to do more under the CCDBG, by increasing available 
child care information, and, finally by respecting the choices they 
make.
  I am again pleased to join my colleagues in this legislation and hope 
other Senators will support this measure as well.
  Mr. ROBERTS. Mr. President, I am pleased to join with my colleagues 
to reintroduce legislation to help meet the child care challenges 
facing families in Kansas and around the nation.
  Child care, in the home when possible and outside the home when 
parents work, goes right to the heart of keeping families strong.
  Unfortunately, just being able to afford child care is a major issue 
for most families. Some child care can cost as much as college tuition 
and consume up to 40 percent of a family's income. Finding quality care 
is another challenge.
  Welfare reforms have cut Kansas welfare rolls in half since 1996. As 
more and more of these families come off the rolls, child care needs 
grow. About half of the 11,000 families that have left welfare rolls in 
Kansas have young children. In order to continue the successful 
transition from welfare to work, parents, especially single parents, 
must have access to affordable, quality child care.
  Only parents can and should decide what child care arrangements work 
best for their children. This includes the decision to stay at home.
  The Caring for Children Act includes provisions to allow a parent who 
is able to stay at home and care for a child to receive a tax credit to 
help cover expenses. This credit applies during the first three years 
of a child's life and amounts to about $900 per year.
  The Caring for Children Act takes steps to assist small businesses 
that want to provide child care. I am pleased that this bill includes a 
short-term flexible grant program to encourage these businesses to work 
together to provide child care services. This program, which provides 
$60 million to the states, allows those closer to home to make 
decisions necessary to improve child care in communities. This funding 
provides the start-up assistance necessary to create self-sustaining 
child care programs.
  I have pledged to work to improve child care. I will continue this 
effort. I look forward to working with my colleagues to expand child 
care options and protect our nation's most valuable resource, our 
children.
  Mr. SPECTER. Mr. President, I have sought recognition to once again 
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. This legislation is identical to 
the child care proposal my colleagues and I introduced during the 105th 
Congress, on January 28, 1998. I believe it is vital that the Congress 
recognize the importance of affordable, quality child care to the 
successful development of our children.
  The Caring for Children Act is a middle-ground, targeted response to 
the growing child care needs facing American families. Our bill 
includes tax incentives for employers and parents, and an increase in 
funding for programs that assist the most needy families. Most 
importantly, our bill proposes prudent adjustments to discretionary 
programs rather than implementing new mandatory spending.
  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 during the 105th Congress with my colleagues, 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 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.

[[Page S2598]]

  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 5 years to the Child Care Development Block 
Grant program, bringing total spending for this program to nearly $2.5 
billion annually by fiscal year 2003. The child care block grant works 
well to assist low-income families acquire child care, and helped over 
93,000 Pennsylvania families last year. Fiscal year 1999 funding for 
this vital assistance program totaled $1.182 billion, $182 billion, 
$182 million above the currently authorized level. 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 provided $20 billion in child care funding 
over a 6-year period. Similarly, I was pleased to participate in the 
bipartisan effort in 1997 to enact legislation to provide $24 billion 
over the next 5 years for States to establish or broaden children's 
health insurance programs. Utilizing these new Federal funds, over 
10,000 previously uninsured children in Pennsylvania have been enrolled 
in this program since May of 1998.
  In conclusion, Mr. President, I believe that it is critical that the 
106th 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.
                                 ______