[Congressional Record (Bound Edition), Volume 147 (2001), Part 5]
[Senate]
[Pages 6736-6742]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DODD (for himself and Mr. Corzine):
  S. 814. A bill to establish the Child Care Provider Retention and 
Development Grant Program and the Child Care Provider Scholarship 
Program; to the Committee on Health, Education, Labor, and Pensions.
  Mr. DODD. Mr. President, I rise today to introduce the Focus on 
Committed and Underpaid Staff for Children's Sake Act. I am pleased 
that Senator Corzine is joining me as a original cosponsor and that 
companion legislation is being introduced in the House today by 
Representatives Miller and Gilman.
  The need for child care has become a daily fact of life for millions 
of parents nationwide. 65 percent of mothers with children under age 
six and 78 percent of mothers with children ages 6 to 13 are in the 
labor force. Each day, 13 million preschool children, including 6 
million infants and toddlers, spend some part of their day in child 
care.
  The quality of that care has a tremendous impact on the critical 
early years of children's development. And, the most powerful 
determinant of the quality of child care is the training, education, 
and pay of those who spend 8-10 hours a day caring for our children.
  Yet, what we know about the child care field is alarming. Despite the 
fact that continuity of care is critical for the emotional development 
of children, staff turnover at child care centers averages 30 percent 
per year--four times greater than the turnover rate for elementary 
school teachers.
  Despite the fact that we as a society say there is no more important 
task than helping to raise a child, according to the Bureau of Labor 
Statistics, we pay the average child care worker about $15,400 a year, 
barely above the poverty level for a family of three. Few child care 
providers have basic benefits like health coverage or paid leave. Only 
a small fraction of child care workers have graduated from college.
  We pay people millions of dollars a year to throw baseballs, to shoot 
basketballs, and to swing golf clubs. What does that say about our 
priorities when at the same time we pay those who care for our most 
precious resource, our children, poverty-level wages?
  A report released yesterday by the University of California, Berkeley 
and the Center for Child Care Workforce on child care providers' pay, 
training and education highlights the current crisis in the child care 
field. In a survey of child care centers in three California 
communities, the study found that three-quarters of all child care 
staff employed in 1996 were no longer on the job in 2000. Some centers 
reported 100 percent turnover. Additionally, nearly half of the child 
care providers who had left had a bachelor's degree, compared to only 
one-third of the new teachers. Some 49 percent, nearly half, of those 
who had left their job, left the child care field entirely.
  It's clear that if we want to attract quality teachers to the child 
care field, the pay has to better reflect the value we place on their 
work. We can't attract them and we can't keep them if we don't pay them 
a living wage.
  The legislation I am introducing today will provide states with funds 
to increase child care worker pay based on the level of education, the 
greater the level of education, the greater the increase in pay. In 
addition, the legislation will provide scholarships of up to $1,500 for 
child care workers who want to further their early childhood education 
training by getting a college degree, an Associate's degree, or a child 
development associate credential.
  We will never make significant strides in improving the quality of 
child care in this nation if we fail to address one of the leading 
problems, attracting and retaining a quality child care workforce. It 
is time to invest in our children by investing in those who dedicate 
their lives to caring for our children.
  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. 814

       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 ``Focus On 
     Committed and Underpaid Staff for Children's Sake Act'' or as 
     the ``FOCUS Act''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Definitions.
Sec. 4. Funds for child care provider retention and development grants 
              and for child care provider scholarships.
Sec. 5. Application and plan.
Sec. 6. Allotments to States.
Sec. 7. Child Care Provider Retention and Development Grant Program.
Sec. 8. Child Care Provider Scholarship Program.
Sec. 9. Annual report.
Sec. 10. Authorization of appropriations.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress makes the following findings:
       (1) Research on early brain development and early childhood 
     demonstrates that the experiences children have and the 
     attachments they form early in life have a decisive, long-
     lasting impact on their later development and learning.

[[Page 6737]]

       (2) High-quality, developmentally appropriate child care 
     beginning in early childhood and continuing through the years 
     that children are in school improves the scholastic success 
     and educational attainments of children that persist into 
     adulthood.
       (3) According to a growing body of research, the single 
     most important determinant of child care quality is the 
     presence of consistent, sensitive, well-trained, and well-
     compensated child care providers; however, child care 
     programs nationwide experience high turnover in teaching 
     staff, fueled by poor compensation and few opportunities for 
     advancement.
       (4) The Department of Labor reports that in 1999 the 
     average wage for a child care provider was $7.42 per hour, or 
     $15,430 annually. For a full-time, full-year work, the wages 
     of a child care provider were not much above the 1999 poverty 
     threshold of $13,423 for a single parent with two children. 
     Family child care providers earned even less. The median wage 
     of a family child care provider in 1999 was $264 weekly, or 
     $13,728 annually.
       (5) Despite the important role child care providers may 
     play in early child development and learning, child care 
     providers earn less than bus drivers ($26,460), barbers 
     ($20,970), and janitors ($18,220).
       (6) Employer-sponsored benefits are minimal for most child 
     care staff. Even among child care centers, the availability 
     of health care coverage for staff remains woefully 
     inadequate.
       (7) To offer compensation that would be sufficient to 
     attract and retain qualified child care staff, child care 
     programs would be required to charge fees that many parents 
     could not afford. In programs that serve low-income children 
     who qualify for Federal and State child care subsidies, the 
     reimbursement rates set by the State strongly influence the 
     level of compensation that staff receive. Current 
     reimbursement rates for center-based child care services and 
     family child care services are insufficient to recruit and 
     retain qualified child care providers and to ensure high-
     quality services for children.
       (8) Teachers leaving the profession are replaced by staff 
     with less education and formal training in early child 
     development.
       (9) As a result of low wages and limited benefits, many 
     child care providers do not stay long in the child care 
     field. Approximately thirty percent of all teaching staff 
     leave their child care centers each year.
       (10) Child care providers, as well as the children, 
     families, and businesses that depend upon them, suffer the 
     consequences of inadequate compensation. This is true, with 
     few exceptions, for providers in all types of programs: 
     subsidized, nonsubsidized, for-profit, nonprofit, large, and 
     small child care settings.
       (11) Because of the severe shortage of qualified staff 
     available for employment by child care programs nationwide, 
     several States have recently initiated programs to improve 
     the quality of child care by increasing the training and 
     compensation of child care providers. Such programs encourage 
     the training, education and increased retention of qualified 
     child care providers by offering financial incentives, 
     including scholarships and compensation increases, that range 
     from $350 to $6,500 annually.
       (b) Purpose.--It is the purpose of this Act to establish 
     the Child Care Provider Retention and Development Grant 
     Program and the Child Care Provider Scholarship Program, to 
     help children receive the high quality child care and early 
     education they need for positive cognitive and social 
     development, by rewarding and promoting retention of 
     committed, qualified child care providers and by providing 
     financial assistance to improve the educational 
     qualifications of child care providers.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Child care provider.--The term ``child care provider'' 
     means an individual who provides a service directly to a 
     child on a person to person basis for compensation at--
       (A) a center-based child care provider that is licensed or 
     regulated under State law and that satisfies the State and 
     local requirements applicable to the child care services 
     provided,
       (B) a licensed or regulated family child care provider that 
     satisfies the State and local requirements applicable to the 
     child care services provided, or
       (C) an out-of-school time program that is licensed or 
     regulated under State law and that satisfies the State and 
     local requirements applicable to the child care services 
     provided,
       (2) Family child care provider.--The term ``family child 
     care provider'' has the meaning given such term in section 
     658P of the Child Care and Development Block Grant Act of 
     1990 (42 U.S.C. 9858n).
       (3) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given such term in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e).
       (4) In-kind contribution.--The term ``in-kind 
     contribution'' means payment of the cost of participation of 
     child care providers in health insurance programs or 
     retirement programs.
       (5) Lead agency.--The term ``lead agency'' means the agency 
     designated under section 658D of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858b).
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (7) State.--The term ``State'' means any of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, Guam, American Samoa, or the Commonwealth of the 
     Northern Mariana Islands.

       (8) Tribal organization.--The term ``tribal organization'' 
     has the meaning given such term in section 4 of the Indian 
     Self-Determination and Education Assistance Act.

     SEC. 4. FUNDS FOR CHILD CARE PROVIDER RETENTION AND 
                   DEVELOPMENT GRANTS AND FOR CHILD CARE PROVIDER 
                   SCHOLARSHIPS.

       (a) In General.--The Secretary may allot funds appropriated 
     to carry out this Act to eligible States for distribution to 
     pay the Federal share of the cost of making grants under this 
     Act to eligible child care providers.
       (b) Allotments.--Funds allotted under section 6 shall be 
     distributed by the Secretary, and expended by the States 
     (directly, or at the option of the States, through units of 
     general purpose local government), and by Indian tribes and 
     tribal organizations, in accordance with this Act.

     SEC. 5. APPLICATION AND PLAN.

       (a) Application.--To be eligible to receive a distribution 
     of funds allotted under section 6, a State shall submit to 
     the Secretary an application at such time, in such manner, 
     and containing such information as the Secretary may require 
     by rule and shall include in such application a State plan 
     that satisfies the requirements of subsection (b).
       (b) Requirements of Plan.--
       (1) Lead agency.--The State plan shall identify the lead 
     agency to make grants under this Act.
       (2) Recruitment and retention of child care providers.--The 
     State plan shall describe how the lead agency will encourage 
     both the recruitment of child care providers who are new to 
     the child care field and the retention of child care 
     providers who have a demonstrated commitment to the child 
     care field.
       (3) Notification of grant availability.--The State plan 
     shall describe how the lead agency will identify and notify 
     all eligible child care providers in the State of the 
     availability of grants under this Act.
       (4) Distribution of grants.--The State plan shall describe 
     how the lead agency will make grants under sections 7 and 8 
     to child care providers in selected geographical areas in the 
     State in compliance with the following requirements:
       (A) Selection of geographical areas.--For the purpose of 
     making such grants for a fiscal year, the State shall select 
     a variety of geographical areas, determined by the State, 
     that--
       (i) includes urban areas, suburban areas, and rural areas, 
     and
       (ii) contains diversity of income levels,
     but shall give special consideration to geographical areas 
     selected under this subparagraph for the preceding fiscal 
     year.
       (B) Selection of child care providers to receive grants.--
     The State may make grants under section 7 only to eligible 
     child care providers in geographical areas selected under 
     subparagraph (A), but--
       (i) may give special consideration in such areas to 
     eligible grant applicants who have attained a higher relevant 
     educational credential, who provide a specific kind of child 
     care services, who provide child care services to populations 
     who meet specific economic characteristics, or who meet such 
     other criteria as the State may establish, and
       (ii) shall give special consideration to eligible grant 
     applicants who received a grant under such section in the 
     preceding fiscal year.
       (C) Limitation.--The State shall describe how the State 
     will ensure that grants made under section 7 to child care 
     providers will not be used to offset reductions in the 
     compensation of such providers.
       (D) Reporting requirement.--With respect to each particular 
     geographical area selected, the State shall agree for each 
     fiscal year for which such State receives a grant under this 
     section--
       (i) to include in the report required by section 9, 
     detailed information regarding--

       (I) the continuity of employment of grant recipients as 
     child care providers with the same employer,
       (II) with respect to each employer that employed a grant 
     recipient, whether such employer was accredited by a 
     recognized State or national accrediting body during the 
     period of employment, and
       (III) to the extent practicable and available to the State, 
     detailed information regarding the rate and frequency of 
     employment turnover of qualified child care providers 
     throughout such area,

     during the 2-year period ending of the date of applications 
     for grants under section 7, and
       (ii) to provide a follow-up report, not later than 90 days 
     after the end of the succeeding fiscal year that includes 
     information regarding--

       (I) the continuity of employment of grant recipients as 
     child care providers with the same employer,
       (II) with respect to each employer that employed a grant 
     recipient, whether such employer was accredited by a 
     recognized State

[[Page 6738]]

     or national accrediting body during the period of employment, 
     and
       (III) to the extent practicable and available to the State, 
     detailed information regarding the rate and frequency of 
     employment turnover of qualified child care providers 
     throughout such area,

     during the 1-year period beginning on the date grants are 
     made by under section 7 to applicants.
       (5) Child care provider retention and development grant 
     program.--The State plan shall describe how the lead agency 
     will determine the dollar amounts of grants made with funds 
     available to carry out section 7 in accordance with the 
     following requirements:
       (A) The State shall demonstrate that the amounts of 
     individual grants to be made under section 7 will be 
     sufficient--
       (i) to encourage child care providers to improve their 
     qualifications, and
       (ii) to retain qualified child care providers in the child 
     care field.
       (B) Such grants made to child care providers who have a 
     child development associate credential and who are employed 
     full-time to provide child care services shall be in an 
     amount that is not less than $1,000 per year.
       (C) The State shall make such grants in larger dollar 
     amounts to child care providers who have higher levels of 
     education than a credential such as a child development 
     associate credential, according to the following 
     requirements:
       (i) A child care provider who has a baccalaureate degree in 
     the area of child development or early child education shall 
     receive a grant that is not less than twice the amount of the 
     grant that is made to a child care provider who has an 
     associate of the arts degree in the area of child development 
     or early child education.
       (ii) A child care provider who has an associate of the arts 
     degree in the area of child development or early child 
     education shall receive a grant that is not less than 150 
     percent of the amount of the grant that is made to a child 
     care provider who has a child development associate 
     credential.
       (iii)(I) Except as provided in subclause (II), a child care 
     provider who has a baccalaureate degree in a field other than 
     child development or early child education shall receive a 
     grant equal to the grant made to a child care provider who 
     has an associate of the arts degree in the area of child 
     development or early child education.
       (II) If a child care provider who has such baccalaureate 
     degree obtains additional educational training in the area of 
     child development or early child education, as specified by 
     the State, such provider shall receive a grant equal to the 
     grant required under clause (i).
       (D) The State shall make such grants in larger dollar 
     amounts to child care providers who work full-time relative 
     to the grant amount made to child care providers who work 
     part-time, based on the State definitions of full-time and 
     part-time work.
       (E) The State shall provide grants in progressively larger 
     dollar amounts to child care providers to reflect the number 
     of years worked as a child care provider.
       (6) Distribution of child care provider scholarships.--The 
     State plan shall describe how the lead agency will make 
     scholarship grants in compliance with section 8 and shall 
     specify the types of educational and training programs for 
     which scholarship grants made under such section may be used, 
     including only programs that--
       (A) are administered by institutions of higher education 
     that are eligible to participate in student financial 
     assistance programs under title IV of the Higher Education 
     Act of 1965 (20 U.S.C. 1070 et seq.), and
       (B) lead to a State or nationally recognized credential in 
     the area of child development or early child education, an 
     associate of the arts degree in the area of child development 
     or early child education, or a baccalaureate degree in the 
     area of child development or early child education.




       (7) Employer contribution.--The State plan shall describe 
     how the lead agency will encourage employers of child care 
     providers to contribute to the attainment of education goals 
     by child care providers who receive grants under section 8.
       (8) Supplementation.--The State plan shall provide 
     assurances that funds received by the State to carry out 
     sections 7 and 8 will be used only to supplement, not to 
     supplant, Federal, State, and local funds otherwise available 
     to support existing services and activities that encourage 
     child care providers to improve their qualifications and that 
     promote the retention of qualified child care providers in 
     the child care field.

     SEC. 6. ALLOTMENTS TO STATES.

       (a) Amounts Reserved.--
       (1) Territories and possessions.--The Secretary shall 
     reserve not more than \1/2\ of 1 percent of the funds 
     appropriated to carry out this Act for any fiscal year for 
     distribution to Guam, American Samoa, and the Commonwealth of 
     the Northern Mariana Islands, to be allotted in accordance 
     with their respective needs.
       (2) Indian tribes and tribal organizations.--The Secretary 
     shall reserve not more than 3 percent of the funds 
     appropriated to carry out this Act for any fiscal year for 
     distribution to Indian tribes and tribal organizations with 
     applications approved under subsection (c).
       (b) Allotments to Remaining States.--
       (1) General authority.--From the funds appropriated to 
     carry out this Act for any fiscal year remaining after 
     reserving funds under subsection (a), the Secretary shall 
     allot to each State (excluding Guam, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands) an amount equal 
     to the sum of--
       (A) an amount that bears the same ratio to 50 percent of 
     such remainder as the product of the young child factor of 
     the State and the allotment percentage of the State bears to 
     the sum of the corresponding products for all States, and --
       (B) an amount that bears the same ratio to 50 percent of 
     such remainder as the product of the school lunch factor of 
     the State and the allotment percentage of the State bears to 
     the sum of the corresponding products for all States. --
       (2) Young child factor.--The term ``young child factor'' 
     means the ratio of the number of children in the State under 
     5 years of age to the number of such children in all States 
     as provided by the most recent annual estimates of population 
     in the States by the Bureau of the Census.
       (3) School lunch factor.--The term ``school lunch factor'' 
     means the ratio of the number of children in the State who 
     are receiving free or reduced price lunches under the school 
     lunch program established under the National School Lunch Act 
     (42 U.S.C. 1751 et seq.) to the number of such children in 
     all the States as determined annually by the Department of 
     Agriculture.
       (4) Allotment percentage.--
       (A) In general.--The allotment percentage for a State is 
     determined by dividing the per capita income of all 
     individuals in the United States, by the per capita income of 
     all individuals in the State.
       (B) Limitations.--If an allotment percentage determined 
     under subparagraph (A)--
       (i) is more than 1.2 percent, then the allotment percentage 
     of that State shall be considered to be 1.2 percent, and
       (ii) is less than 0.8 percent, then the allotment 
     percentage of the State shall be considered to be 0.8 
     percent. --
       (C) Per capita income.--For purposes of subparagraph (A), 
     per capita income shall be--
       (i) determined at 2-year intervals,
       (ii) applied for the 2-year period beginning on October 1 
     of the first fiscal year beginning on the date such 
     determination is made, and
       (iii) equal to the average of the annual per capita incomes 
     for the most recent period of 3 consecutive years for which 
     satisfactory data are available from the Department of 
     Commerce at the time such determination is made.
       (c) Allotments to Indian Tribes and Tribal Organizations.--
       (1) Reservation of funds.--From amounts reserved under 
     subsection (a)(2), the Secretary may make allotments to 
     Indian tribes and tribal organizations that submit 
     applications under this subsection, to plan and carry out 
     programs and activities to encourage child care providers to 
     improve their qualifications and to retain qualified child 
     care providers in the child care field.
       (2) Applications and requirements.--An application for an 
     allotment to an Indian tribe or tribal organization under 
     this section shall provide that--
       (A) the applicant will coordinate, to the maximum extent 
     practicable, with the lead agency in each State in which the 
     applicant will carry out such programs and activities, and
       (B) will make such reports on, and conduct such audits of, 
     programs and activities under this Act as the Secretary may 
     require.
       (d) Data and Information.--The Secretary shall obtain from 
     each appropriate Federal agency, the most recent data and 
     information necessary to determine the allotments provided 
     for in subsection (b).
       (e) Reallotments.--
       (1) In general.--Any portion of the allotment under 
     subsection (b) to a State for a fiscal year that the 
     Secretary determines will not be distributed to the State for 
     such fiscal year shall be reallotted by the Secretary to 
     other States proportionately based on allotments made under 
     such subsection to such States for such fiscal year.
       (2) Limitations.--
       (A) Reduction.--The amount of any reallotment to which a 
     State is entitled to under paragraph (1) shall be reduced to 
     the extent that such amount exceeds the amount that the 
     Secretary estimates will be distributed to the State to make 
     grants under this Act.
       (B) Reallotments.--The amount of such reduction shall be 
     reallotted proportionately based on allotments made under 
     subsection (b) to States with respect to which no reduction 
     in an allotment, or in a reallotment, is required by this 
     subsection.
       (3) Amounts reallotted.--For purposes of this Act (other 
     than this subsection and subsection (b)), any amount 
     reallotted to a State under this subsection shall be 
     considered to be part of the allotment made under subsection 
     (b) to the State.
       (f) Cost Sharing.--
       (1) Federal share.--Allotted funds distributed by the 
     Secretary to a State for a fiscal year to carry out sections 
     7 and 8 may be used by the State to pay--

[[Page 6739]]

       (A) not more than 90 percent of the cost of each grant made 
     under such sections, in the 1st fiscal year for which the 
     State receives such funds,
       (B) not more than 85 percent of the cost of each grant made 
     under such sections, in the 2d fiscal year for which the 
     State receives such funds,
       (C) not more than 80 percent of the cost of each grant made 
     under such sections, in the 3d fiscal year for which the 
     State receives such funds, and
       (D) not more than 75 percent of the cost of each grant made 
     under such sections, in any subsequent fiscal year for which 
     the State receives such funds.
       (2) State share.--The non-Federal share of the cost of 
     making such grants shall be paid by the State in cash or in 
     the form of an in-kind contribution, fairly evaluated by the 
     Secretary.
       (g) Availability of Allotted Funds Distributed to States.--
     Of the allotted funds distributed under this Act to a State 
     for a fiscal year--
       (1) not less than 67.5 percent shall be available to the 
     State for grants under section 7,
       (2) not less than 22.5 percent shall be available to the 
     State for grants under section 8, and
       (3) not more than 10 percent shall be available to pay 
     administrative costs incurred by the State to carry out this 
     Act.

     SEC. 7. CHILD CARE PROVIDER RETENTION AND DEVELOPMENT GRANT 
                   PROGRAM.

       (a) In General.--A State that receives funds allotted under 
     section 6 and made available to carry out this section shall 
     expend such funds to make grants to eligible child care 
     providers in accordance with this section, to improve the 
     qualifications and promote the retention of qualified child 
     care providers.
       (b) Eligibility To Receive Grants.--To be eligible to 
     receive a grant under this section, a child care provider 
     shall--
       (1) have a child development associate credential or 
     equivalent, an associate of the arts degree in the area of 
     child development or early child education, a baccalaureate 
     degree in the area of child development or early child 
     education, or a baccalaureate degree in an unrelated field, 
     and
       (2) be employed as a child care provider for not less than 
     1 calendar year, or the program equivalent of 1 calendar year 
     if then employed in a child care program that operates for 
     less than a full calendar year, ending on the date of the 
     application for such grant, except that not more than 3 
     months of education related to child development or to early 
     child education obtained during a calendar year may be 
     treated as employment that satisfies the requirements of this 
     paragraph.
       (c) Preservation of Eligibility.--The receipt of a grant 
     under section 8 by a child care provider shall not be taken 
     into consideration for purposes of selecting eligible 
     applicants to receive a grant under this section.

     SEC. 8. CHILD CARE PROVIDER SCHOLARSHIP PROGRAM.

       (a) In General.--A State that receives funds allotted under 
     section 6 and made available to carry out this section shall 
     expend such funds to make scholarship grants to eligible 
     child care providers in accordance with this section to 
     improve their educational qualifications to provide child 
     care services.
       (b) Eligibility Requirement for Scholarship Grants.--As a 
     condition of eligibility to receive a scholarship grant under 
     this section, a child care provider shall be employed as a 
     child care provider for not less than 1 calendar year, or the 
     program equivalent of 1 calendar year if then employed in a 
     child care program that operates for less than a full 
     calendar year ending on the date of the application for such 
     grant.
       (c) Selection of Grantees.--For purposes of selecting child 
     care providers to receive scholarship grants under this 
     section and determining the dollar amounts of such grants, a 
     State may not--
       (1) take into consideration whether a grant applicant is 
     receiving, will receive, or has applied to receive any funds 
     under any other provision of this Act, or under any other 
     Federal or State law that provides funds for educational 
     purposes, or
       (2) consider as resources of such applicant any funds such 
     applicant is receiving, may receive, or may be eligible to 
     receive under any other provision of this Act, under any 
     other Federal or State law that provides funds for 
     educational purposes, or from a private entity.
       (d) Cost Sharing Required.--The dollar amount of a 
     scholarship grant made under this section to a child care 
     provider shall be less than the cost of the education for 
     which such grant is made.
       (e) Annual Maximum Scholarship Grant Amount.--The maximum 
     aggregate dollar amount of a scholarship grant made to an 
     eligible child care provider under this section in a fiscal 
     year may not exceed $1,500.

     SEC. 9. ANNUAL REPORT.

       A State that receives funds appropriated to carry out this 
     Act for a fiscal year shall submit to the Secretary, not 
     later than 90 days after the end of such fiscal year, a 
     report--
       (1) specifying the uses for which the State expended such 
     funds, and the aggregate amount of funds (including State 
     funds) expended for each of such uses,
       (2) containing available data relating to grants made with 
     such funds, including--
       (A) the number of child care providers who received such 
     grants,
       (B) the dollar amounts of such grants,
       (C) any other information that describes or evaluates the 
     effectiveness of this Act,
       (D) the particular geographical areas selected under 
     section 5 for the purpose of making such grants,
       (E) with respect to grants made under section 7--
       (i) the number of years grant recipients have been employed 
     as a child care provider,
       (ii) the level of training and education of grant 
     recipients,
       (iii) the salaries and other compensation received by grant 
     recipients to provide child care services,
       (iv) the number of children who received child care 
     services provided by grant recipients,
       (v) information on family demographics of such children,
       (vi) the types of settings described in subparagraphs (A), 
     (B), and (C) of section 3(a)(1) in which grant recipients are 
     employed, and
       (vii) the ages of the children who received child care 
     services provided by grant recipients,
       (F) with respect to grants made under section 8--
       (i) the number of years grant recipients have been employed 
     as child care provider,
       (ii) the types of settings described in subparagraphs (A), 
     (B), and (C) of section 3(a)(1) in which grant recipients are 
     employed, and
       (iii) the level of training and education of grant 
     recipients,
       (iv) to the extent practicable and available to the State, 
     detailed information regarding the salaries and other 
     compensation received by grant recipients to provide child 
     care services before, during, and after receiving such grant,
       (vi) the ages of the children who received child care 
     services provided by grant recipients,
       (vi) the number of course credits or credentials obtained 
     by grant recipients, and
       (vii) the amount of time taken for completion of the 
     education for which such grants were made, and
       (G) such other information as the Secretary may require by 
     rule.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated $5,000,000,000 in 
     the aggregate for fiscal years 2002 through 2006 to carry out 
     this Act.
                                 ______
                                 
      By Mr. MURKOWSKI:
  S. 815. A bill to make improvements to the Arctic Research and Policy 
Act of 1984; to the Committee on Governmental Affairs.
  Mr. MURKOWSKI. Mr. President, today I rise to introduce legislation 
to improve the operation of the Arctic Research and Policy Act. We have 
about 17 years of experience with this act, and the time has come to 
make some modifications to reflect the experience we have gained over 
that time.
  The most important feature of this bill is contained in section 4. 
This section authorizes the Arctic Research Committee, a Presidential 
Commission, to make grants for scientific research. Currently, the 
Commission can make recommendations and set priorities, but it cannot 
make grants. Our experience with the act and the Commission has shown 
us that research needs that do not fit neatly in a single agency do not 
get funded, even if they are compelling priorities.
  One example is a proposed Arctic contamination initiative that was 
developed a few years ago after we discovered that pollutants from the 
Former Soviet Union, including radionuclides, heavy metals and 
persistent organic pollutants, were working their way into the Arctic 
environment. It became clear that the job of monitoring and evaluating 
the threat was too big for any single agency. The Interior Department, 
given its vast land management responsibilities in Alaska, was 
interested. The Commerce Department, given its jurisdiction over 
fisheries issues, was interested. The Department of Health and Human 
Services, given its concern about the health of Alaska's indigenous 
peoples, was interested. The only agency that didn't seem interested in 
the problem, strangely enough, was the EPA, which at the time was in 
the process of dismantling its Arctic Contaminants program.
  Unfortunately, because the job was too big for any single agency, it 
was difficult to get the level of interagency cooperation necessary for 
a coordinated program. Moreover, agencies were unwilling to make a 
significant budgetary commitment to a program

[[Page 6740]]

that wasn't under their exclusive control. If the Arctic Research 
Commission, which recognized the need, had some funding of its own to 
leverage agency participation and help to coordinate the effort, we 
would know far more about the Arctic contaminants problem than we do 
today.
  Another example is the compelling need to understand the Bering Sea 
ecosystem. Over the past 20 years we have seen significant shifts in 
some of the populations comprising this ecosystem. King crab 
populations have declined sharply. Pollock populations have increased 
sharply. Steller sea lion populations have declined as have many types 
of sea birds. Scientists cannot tell us whether these population shifts 
are due to abiotic factors such as climate change, biotic factors such 
as predator-prey relationships, or some combination of both. Because 
the nation depends on this area for a significant portion of all its 
seafood, this is not an issue without stakeholders. Despite the chorus 
of interests and federal agencies that have said research is needed, a 
coordinated effort has not yet occurred. If the Arctic Research 
Commission, which recognized this need early on, had some funding of 
its own to leverage agency participation and help to coordinate the 
effort, we would know far more about the Bering Sea ecosystem than we 
do today.
  This bill also makes a number of other minor changes in the act:
  Section 2 allows the chairperson of the Commission to receive 
compensation for up to 120 days per year rather than the 90 days per 
year currently allowed by the Act. The chairperson has a major role to 
play in interacting with the legislative and executive branches of the 
government, representing the Commission to non-governmental 
organizations, in interacting with the State of Alaska, and serving in 
international fora. In the past, chairpersons have been unable to fully 
discharge their responsibilities in the 90 day limit specified in the 
act.
  Section 3 authorizes the Commission to award an annual award not to 
exceed $1,000 to recognize either outstanding research or outstanding 
efforts in support of research in the Arctic. The ability to give 
modest awards will bring recognition to outstanding efforts in Arctic 
Research which, in turn, will help to stimulate research in the Arctic 
region. This section also specifies that a current or former Commission 
member is not eligible to receive the award.
  Section 5 authorizes official representation and reception 
activities. Because the Commission is not authorized to use funds for 
these kinds of activities, the Commission has experienced embarrassment 
when they were unable to reciprocate after their foreign counterparts 
hosted a reception or lunch on their behalf. Under this provision, the 
Commission may spend not more than two tenths of one percent of its 
budget for representation and reception activities in each fiscal year.
  The Arctic Research and Policy Act and the Arctic Research Commission 
has worked well over the past 17 years. It can work even better with 
these modest changes. I look forward to working with my colleagues to 
enact this bill as soon as possible.
                                 ______
                                 
      By Mr. BREAUX:
  S. 816. A bill to amend the Internal Revenue Code of 1986 to allow 
certain coins to be acquired by individual retirement accounts and 
other individually directed pension plan accounts; to the Committee on 
Finance.
  Mr. BREAUX. Mr. President, I rise today to introduce legislation 
allowing certain U.S. legal tender coins to be qualified investments 
for an individual retirement account, IRA.
  Congress excluded ``collectibles,'' such as antiques, gold and silver 
bullion, and legal tender coinage, as appropriate for contributions to 
IRAs in 1981. The primary reason was the concern that individuals would 
get a tax break when they bought collectibles for their personal use. 
For example, a taxpayer might deduct the purchase of an antique rug for 
his/her living room as an IRA investment. Congress was also concerned 
about how the many different types of collectibles are valued.
  Over the years, however, certain coins and precious metals have been 
excluded from the definition of a collectible because they are 
independently valued investments that offer investors portfolio 
diversity and liquidity. For example, Congress excluded gold and silver 
U.S. American Eagles from the definition of collectibles in 1986, and 
the Taxpayer Relief Act of 1997 took the further step of excluding 
certain precious metals bullion.
  My legislation would exclude from the definition of collectibles only 
those U.S. legal tender coins which meet the following three standards: 
certification by a nationally recognized grading service, traded on a 
nationally recognized network, and held by a qualified trustee as 
described in the Internal Revenue Code. In other words, only investment 
quality coins that are independently valued and not held for personal 
use may be included in IRAs.
  There are several nationally recognized, independent certification or 
grading services. Full-time professional graders, numismatists, examine 
each coin for authenticity and grade them according to established 
standards. Upon certification, the coin is sonically-sealed, preserved, 
to ensure that it remains in the same condition as when it was graded.
  Legal tender coins are then traded via two independent electronic 
networks--the Certified Coin Exchange and Certified Coin Net. These 
networks are independent of each other and have no financial interest 
in the legal tender coinage and precious metals markets. The networks 
function in precisely the same manner as the NASDAQ with a series of 
published ``bid'' and ``ask'' prices and last trades. The buys and 
sells are enforceable prices that must be honored as posted until 
updated.
  The liquidity provided through a bona fide national trading network, 
combined with published prices, make legal tender coinage a practical 
investment that offers investors diversification and liquidity. 
Investment in these tangible assets has become a safe and prudent 
course of action for both the small and large investor and should given 
the same treatment under the law as other financial investments. I urge 
the Senate to enact this important legislation as soon as possible.
  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. 816

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

     SECTION 1. CERTAIN COINS NOT TREATED AS COLLECTIBLES.

       (a) In General.--Subparagraph (A) of section 408(m)(3) of 
     the Internal Revenue Code of 1986 (relating to exception for 
     certain coins and bullion) is amended to read as follows:
       ``(A) any coin certified by a recognized grading service 
     and traded on a nationally recognized electronic network, or 
     listed by a recognized wholesale reporting service, and--
       ``(i) which is or was at any time legal tender in the 
     United States, or
       ``(ii) issued under the laws of any State, or''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                 ______
                                 
      By Mr. DOMENICI (for himself and Mr. Bingaman):
  S. 817. A bill to amend the National Trails System Act to designate 
the Old Spanish Trail as a National Historic Trail; to the Committee on 
Energy and Natural Resources.
  Mr. DOMENICI. Mr. President, I stand here before you today to 
introduce the designation of the Old Spanish Trail as a National 
Historic Trail. This legislation will amend the National Trails System 
Act and designate the Old Spanish Trail; which originates in Santa Fe, 
NM and continues to Los Angeles, CA as a National Historic Trail.
  The United Stats of America has a rich history of which, as citizens, 
we are very proud. Particularly in the west, citizens from all walks of 
life have deep rooted cultural and historic ties to land throughout the 
west. The Old Spanish Trail dates back to 1829. The Old Spanish Trail 
had a variety of uses, from trade caravans to military

[[Page 6741]]

expeditions. For twenty plus years the Old Spanish Trail was used as a 
main route of travel between New Mexico and California.
  Today, more than one hundred and fifty years after the first caravan 
on the Old Spanish Trail, the historic character of the trail is tied 
to its routes in the natural environment and the existence of 
landscapes along the trail. The Old Spanish Trail remains relatively 
unchanged from the trail period. It has also been proven that numerous 
Indian pueblos were situated along the Old Spanish Trail serving as 
trading centers. The majority of these pueblos are occupied by 
descendants who contributed to the labor and goods that constituted 
commerce on the Old Spanish Trail.
  The National Trails System was established by the National Trails 
System Act of 1968 ``to promote the preservation of, public access to, 
travel within, and enjoyment and appreciation of the open air, outdoor 
areas and historic resources of the Nation.'' Designating the Old 
Spanish Trail as a National Historic Trail would allow for just what 
the act has intended, preservation, access, enjoyment and appreciation 
of the historic resources of our Nation.
  By definition under the National Trails System Act of 1968, National 
Historic Trails are ``extended trails which follow as closely as 
possible and practicable the original route or routes of travel of 
national historic significance.'' The main route of Old Spanish Trail 
travels more than 1,160 miles through the states of New Mexico, 
Colorado, Utah, Arizona, Nevada and California as well as 33 different 
counties throughout these states. More than 1,190 miles of Old Spanish 
Trail are currently managed by the Bureau of Land Management, more than 
310 miles are managed by the USDA Forest Service with an additional 
approximate 120 miles controlled by the U.S. Fish and Wildlife Service. 
The relative lack of development facilitates public access as well as 
minimizing potential conflicts with private land uses.
  The Old Spanish Trail has been significant in many respects to many 
different people. The rich history of this trail is something that 
should not be left out of our National Trails System. Designating Old 
Spanish Trail as a national Historic Trail will protect this historic 
route and its historic remnants and artifacts for public use and 
enjoyment.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Torricelli, Mr. Kyl, and Mr. 
        Murkowski):
  S. 818. A bill to amend the Internal Revenue Code of 1986 to provide 
a long-term capital gains exclusion for individuals, and to reduce the 
holding period for long-term capital gain treatment to 6 months, and 
for other purposes; to the Committee on Finance.
  Mr. HATCH. Mr. President, on behalf of myself and Senator Torricelli, 
I rise today to introduce the Capital Gains Relief and Simplification 
Act of 2001. We are joined by Senators Kyle  and Murkowski, each of 
whom contributed to the development of this bill. This is a strong, 
bipartisan capital gains tax cut package designed to help all 
investors, but is aimed directly at small investors first.
  This bill takes a bottom-up approach to capital gains relief, but 
offers reduced capital gains rates to all taxpayers. But this is not 
all. The bill also offers a great deal of simplification for all 
taxpayers with capital gains to report on their tax returns. Both of 
these features are important because investment in capital assets has 
become such an important part of the lives of most Americans.
  In looking at the issue of capital gains in 2001, Mr. President, 
three things are clear. First capital gains and losses are experienced 
by ordinary Americans and are not just the province of the wealthy. 
Second, the reporting of capital gains transactions on the tax return 
has grown very complex and burdensome, and third, capital gains tax 
rates are too high. These all add up to the need for capital gains 
relief, and this is what our bill is designed to address.
  Long gone are the days when anyone can credibly say that capital 
assets are only, or even mostly, owned by the rich. A 1992 Treasury 
study showed that about three-quarters of all families in the U.S. 
owned capital assets, and this percentage has grown higher since then. 
That same study showed that 30 percent of the dollar value of all 
capital assets, excluding personal residences, was held by families 
with incomes of $50,000 or less in 1992.
  More recent data confirm that more and more U.S. families own capital 
investments. A survey last year by the Federal Reserve showed that 
stock made up nearly 32 percent of U.S. household wealth in 1999, up 
from 28 percent the year before. Moreover, another Federal Reserve 
study showed that in 1998, almost 49 percent of all families directly 
or indirectly held stock. Among families with annual income of between 
$25,000 and $50,000, the level was almost 53 percent.
  When looking at data on who pays capital gains taxes, we find that 
many lower- and middle-income Americans are reporting capital gains. In 
fact, IRS data from the year 1998, the latest available, show that over 
25 million returns filed that year reported capital gains. This is 
about one in five tax returns filed in 1998. Over 40 percent of those 
reporting capital gains had income of less than $50,000, and 59 percent 
had income of less than $75,000. Moreover, when looking at the dollar 
amount of gains reported, we find that 56 percent of all capital gains 
in 1998 were claimed by taxpayers with incomes of under $75,000.
  I believe it is very clear, that capital gains relief is not just for 
wealthy Americans. It is very much needed by the average American 
family. It is also clear that reporting capital gains is very complex 
for most taxpayers.
  Millions of Americans hold investments in mutual funds. In fact, 
according to the Joint Economic Committee, 44 percent of all U.S. 
households owned mutual funds in 1998, up from just 6 percent in 1980. 
Most of these mutual funds annually distribute dividends and capital 
gains to their owners, which must be reported as income on Form 1040 
each year. This can be a rather confusing process for many investors, 
for several reasons.
  First, many mutual fund owners routinely reinvest the dividend and 
capital gains income back into the fund, rather than taking them in 
cash. Because they receive no cash, it comes as a surprise to some that 
they must pay tax on the gains at all. Many mutual fund investors were 
particularly dismayed this past tax filing season, because they had to 
report capital gains from funds that had decreased in value.
  Second, when mutual fund owners sell their interest in a fund, 
computing the capital gain or loss on the sale can be daunting, 
particularly if the individual had been reinvesting the dividends and 
capital gains back to the fund.
  Finally, after figuring out what capital gains have been received and 
how much should be reported, and any gain or loss from a sale of the 
fund, mutual fund owners, like other investors in capital assets, must 
then deal with the challenge of reporting capital gains on the 
complicated Schedule D of Form 1040. This form is confusing at best and 
exasperating at worst. It consists of 54 lines on two pages, and is 
accompanied by an 8-page set of instructions with two worksheets. The 
estimated time to complete this form, according to IRS estimates, is an 
astounding 6 hours and 48 minutes.
  Finally, it is clear that capital gains tax rates are too high. In 
fact, a new report by Arthur Andersen LLP shows that the average 
middle-income individual investor faces a combined state and federal 
capital gains tax burden of 25 percent on long-term capital gains. I 
want to emphasize that this is the average rate across the U.S. In some 
states, including my home state of Utah where the rate is 27 percent, 
the burden is even higher.
  These figures may surprise some of our colleagues. After all, many 
members of this body were present in 1997 when we reduced the maximum 
capital gains tax rate from 28 percent to 20 percent. The fact is, 
however, that most states tack a relatively high additional tax on the 
federal capital gains rate to produce this 25 percent average capital 
gains tax rate.

[[Page 6742]]

  This is particularly important in light of the fact that the United 
States still taxes capital gains more heavily than do most other 
countries. In fact, a recent survey of 24 industrial and developing 
countries taken by the American Council for Capital Formation's Center 
for Policy Research showed an average capital gains rate of 14.5 
percent. This is more than 10 percent above the combined average 
federal-state U.S. rate.
  The Capital Gains Relief and Simplification Act we are introducing 
today is designed to address the problem of too high a tax rate as well 
as the complexity problem, in a way that is directed to all taxpayers, 
but especially those in the middle- and lower-income groups.
  Let me briefly describe this bill. First, it provides a 100 percent 
exclusion for the first $1,000 in capital gains for every individual 
taxpayer. This would be $2,000 for a married couple filing a joint 
return. Individuals with capital gains below these thresholds would 
generally not even have to file the confusing Schedule D. Totally 
avoiding a complex tax form is the ultimate in simplification.
  Second, for individual capital gains above the $1,000 (or $2,000) 
exclusion threshold, the bill provides a 50 percent deduction. The 
effect of this would be to lower an individual's top capital gains tax 
rate to exactly half the ordinary income rate. If for example, under 
current law an investor's marginal tax bracket is 31 percent, the top 
capital gains rate for that investor would be 15.5 percent.
  This deduction approach offers both simplicity, and a greater 
reduction in rates for those in the lower tax brackets than for those 
in the highest brackets. For example, compared with current law, a 
taxpayer in the highest tax bracket of 39.6 percent would find his or 
her top capital gains tax rate cut from the current 20 percent to 19.8 
percent under this bill. An investor in the 28 percent bracket, 
however, would see his or her top capital gains rate drop from the 
current 20 percent to 14 percent.
  Moreover, under this bill investors would see further capital gains 
tax rate cuts as the ordinary income tax rates are reduced, as under 
President Bush's tax plan. For example, those in the proposed 25 
percent rate bracket would enjoy a top capital gains rate of just 12.5 
percent, while those in lower brackets would see even lower capital 
gains rates, to the extent their capital gains exceeded the 100 percent 
exclusion thresholds.
  Furthermore, this 50 percent deduction approach also helps with the 
problem I mentioned before of high combined federal and state capital 
gains tax rates. Most states use the federal adjusted gross income, 
AGI, as a starting point for determining state income tax liability. 
Thus, under current law, all of an investor's capital gains are 
generally included in the state tax base. Under this bill's exclusion 
approach, only 50 percent of capital gains over the exclusion would be 
included in the federal AGI. This means most states would generally 
only tax a fraction of the investor's capital gains. Therefore, this 
bill would result in lower federal and state taxes on capital gains.
  I would like to mention several other features of the bill. First, it 
would reduce the holding period of long-term capital gains from one 
year to six months. According to Bruce Bartlett, a well-known economist 
with the National Center for Policy Analysis, a holding period 
requirement for favorable capital gains treatment has several economic 
costs to investors, the consequences of which may reduce the level of 
investment. Among these economic costs are a reduction in liquidity and 
the creation of a lock-in effect that can cause the prices of stock to 
vary from its real value. Reducing the holding period will reduce these 
costs and may also increase revenue to the Treasury from capital gains.
  Second, the bill increases the amount of capital loss an individual 
may deduct against ordinary income. Under current law, an individual's 
capital gains are taxed from the first dollar to the last dollar. 
However, if an individual suffers a capital loss, and has no capital 
gains to use to offset the loss, he or she is allowed to deduct only 
$3,000 of the loss against ordinary income. This is unfair and the 
amount is too low. Our legislation helps alleviate this problem by 
increasing the $3,000 figure to $10,000 and indexing it for future 
inflation.
  Finally, the Capital Gains Relief and Simplification Act includes two 
provisions to help taxpayers who sell their homes and want to take 
advantage of the principal residence exclusion enacted in 1997. The 
first one addresses a problem that members of the U.S. uniformed 
services and Foreign Service sometimes suffer when called away from 
their homes for work-related purposes. In many cases, they return from 
these assignments and want or need to sell their principal residence. 
Because they do not meet the five-year ownership and use test, however, 
they are denied the full use of the present law exclusion. This bill 
corrects this inequity by suspending this test during such absences. 
The provision would also apply to individuals relocated outside the 
United States by their employers.
  The second provision merely indexes for inflation the $250,000 and 
$500,000 thresholds for purposes of the principal residence exclusion. 
While these levels might have seemed adequate in 1997, and perhaps even 
in 2001, inflation will soon cause these thresholds to be worth far 
less than Congress intended when crafting this provision. We should 
adjust them now.
  This bill represents a win for everybody. All investors win because 
it would significantly lower the capital gains tax rate and simplify 
their lives at tax time. Small investors especially win because all or 
much of their capital gains would escape taxation altogether and they 
would avoid much of the complexity they currently face with Schedule D. 
All Americans win because reducing capital gains would increase 
economic growth and job creation.
  I urge my colleagues on both sides of the aisle to take a close look 
at this legislation and join us in lowering taxes on millions of 
Americans and striking an important blow for tax simplicity at the same 
time.

                          ____________________