[Senate Report 104-94]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                                 SENATE

 1st Session                                                     104-94
_______________________________________________________________________


 
      CHILD CARE AND DEVELOPMENT BLOCK GRANT AMENDMENTS ACT OF 1995

                                _______


     June 8 (legislative day, June 5), 1995.--Ordered to be printed

_______________________________________________________________________


   Mrs. Kassebaum, from the Committee on Labor and Human Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 850]
    The Committee on Labor and Human Resources, to which was 
referred the bill (S. 850) to amend the Child Care and 
Development Block Grant Act of 1990 to consolidate Federal 
child care programs, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.
                                CONTENTS

                                                                   Page
  I. Summary of the bill..............................................2
 II. Background and need for legislation..............................4
III. Legislative history and committee action.........................6
 IV. Committee views..................................................7
  V. Cost estimate...................................................11
 VI. Regulatory impact statement.....................................13
VII. Section-by-section analysis.....................................13
VIII.
     Changes in existing law.........................................16

    The Child Care and Development Block Grant Amendments Act 
of 1995 reauthorizes and amends the Child Care and Development 
Block Grant Act, which was enacted into law on November 5, 
1990, as part of the Omnibus Reconciliation Act of 1990. The 
Child Care and Development Block Grant Act was enacted to 
provide low-income working families with subsidies for child 
care and to improve the quality and availability of child care. 
The Child Care and Development Block Grant Amendments Act of 
1995 reauthorizes the 1990 law with several important changes. 
This legislation provides States with funding for child care 
subsidies and activities to improve the quality and 
availability of child care through a consolidated child care 
program.

                         I. Summary of the Bill

                               A. Purpose

    The Child Care and Development Block Grant Amendments Act 
of 1995 reauthorizes and amends the Child Care and Development 
Block Grant Act of 1990, which was originally enacted to 
provide low-income working families with assistance for child 
care services and to improve the quality and availability of 
child care. The purpose of this legislation is to make 
improvements to the 1990 law by: (1) giving States greater 
flexibility in designing their child care system; (2) providing 
greater emphasis on parental choice; (3) consolidating Federal 
discretionary child care programs and other child care funding 
into one seamless system of child care services; and (4) 
removing barriers to providing child care for Indian tribes. 
This legislation provides States with funding for child care 
subsidies and activities to improve the quality and 
availability of child care through a consolidated child care 
program.

                            B. Authorization

    The Child Care and Development Block Grant (CCDBG) is 
amended to include two discretionary programs, the State 
Dependent Care Planning and Development Grants and the Child 
Development Associate Credential (CDA) Scholarships, into a 
discretionary block grant with no State match required. This is 
consistent with the current CCDBG structure. The authorization 
for fiscal year 1996 is $1,000,000,000 and such sums as 
necessary through the year 2000.

                         C. State Requirements

    1. The health and safety standards included in the CCDBG 
when it was enacted in 1990, are maintained. These standards 
are broadly defined, and States continue to have broad 
discretion in enforcing them. The standards are: (1) the 
prevention and control of infectious diseases; (2) building and 
physical premises safety; and (3) minimum health and safety 
training appropriate to the provider setting. Providers 
receiving funds from the block grant (via contract or parent 
voucher) must meet any existing State and local licensing and 
regulatory requirements.
    2. The quality set-aside, which is part of the 1990 act, is 
maintained. However, it is more broadly defined and gives 
States discretion in how they choose to spend the money. The 
only required quality activity is that States must provide 
consumer education to encourage maximum parental choice and 
improve availability of child care through a comprehensive 
referral and resource system. The set-aside is 15 percent of 
the State allotment.
    3. States are required to submit a plan, similar to what 
they currently provide under the CCDBG, which designates a lead 
agency and outlines procedures for assuring parental choice of 
providers, parental complaints, consumer education, and 
compliance with State and local licensing and health and safety 
requirements.
    4. States are required to submit a report to the Secretary 
of Health and Human Services (HHS) every 2 years specifying how 
they used the money, the number of children who were assisted, 
activities that were implemented to encourage a public-private 
partnership, and the extent and manner in which they 
implemented a resource and referral network.
    5. States are required to establish a sliding fee scale 
that ensures a representative distribution of participation 
among low-income working families and welfare recipients.
    6. States may not expend more than 5 percent on 
administrative costs.
    7. If States expend monies for child care from other 
Federal funding sources, then this funding will be distributed 
through the State system established under the CCDBG. This will 
reduce Federal regulations and requirements by establishing one 
consolidated child care program. This will also provide 
beneficiaries with more stability in child care since 
eligibility requirements will be streamlined.

                       d. enforcement mechanisms

    If a State is determined (via the HHS appeals and hearing 
process) to have improperly expended the block grant funds, the 
Secretary is given the option of: (1) imposing additional 
requirements to ensure State compliance or correct areas of 
noncompliance with the act; (2) require States to repay funds 
improperly expended; (3) deduct from the administrative portion 
of the State allotment an amount less than or equal to the 
improperly expended funds; (4) or a combination of these 
options.

                            e. indian tribes

    The following provisions have been added for Indian tribes: 
(1) allowing tribes to use funds for facilities construction if 
the Secretary of HHS determines that this is a barrier to 
providing child care (this applies only to Indian tribes); (2) 
allowing any tribal allotments that are not expended to be 
redistributed to other tribes, which is similar to the 
provisions governing unused State allotments; and (3) exempting 
tribes from State licensing requirements and allowing the 
Secretary, in consultation with the tribes, to develop minimum 
standards for child care providers that takes into account 
tribes' needs and available resources. The set-aside for 
Indiana tribes of ``up to 3 percent'' remains unchanged from 
the 1990 law.

                     f. programs to be consolidated

Child care and development block grant

    Discretionary grant program to help low-income parents pay 
for child care, to expand early childhood development programs 
to improve the availability and quality of care. No State match 
is required. For fiscal year 1995, $935 million was 
appropriated.

State dependent care planning and development grants

    Discretionary grant program for child care resource and 
referral and for before- and after-school child care services. 
Provides a 75 percent Federal matching rate to States. For 
fiscal year 1995, $13 million was appropriated.

Child development associate credential (CDA) scholarships

    Discretionary grant program to States to provide 
scholarships to qualified child care workers to cover the cost 
of the CDA application, assessment, and credentialing. This 
credential is awarded by the Council for Early Childhood 
Professional Recognition. No State match is required. For 
fiscal year 1995, $1 million was appropriated.

                II. Background and Need for Legislation

    Dependable, high-quality child care is a universal need 
among working parents. However, not all working parents have 
access to such care because it is either not available, or not 
affordable. The search for reliable, acceptable child care can 
be particularly difficult for working parents with limited 
resources, and for parents who are dependent on welfare yet are 
trying to become self-sufficient through work or training. 
According to a 1994 General Accounting Office (GAO) report, 
affordable child care is a ``decisive'' factor affecting the 
likelihood of low-income mothers to work. The GAO predicted 
that child care subsidies would dramatically increase the 
number of poor who would work by 52 percent.
    Federal leadership is crucial to support the availability 
of quality child care services, particularly in the context of 
welfare reform and consideration of proposals that could 
significantly increase the participation of low-income parents 
in the work force. If State and Federal welfare reform 
initiatives are to be successful, child care services must be 
available for those struggling to earn their way off welfare, 
and for low-income working families who could become dependent 
on welfare in the absence of affordable child care.
    In 1988 and 1990, Congress recognized the need for 
affordable, quality child care for low-income families, and 
elevated the Federal role in child care by enacting four 
programs to subsidize services for various categories of low-
income families, ranging from welfare recipients required to 
participate in education and training activities to non-welfare 
working families with low incomes. Although these programs have 
allowed many families to work and remain self sufficient, they 
have resulted in a bureaucratic maze that is difficult for 
States to administer and often results in disrupted services 
for children as the economic circumstances and program 
participation of their parents change. Moreover, subsidized 
child care programs still serve only a small part of the 
eligible population and waiting lists for services exist in 
almost all States. The GAO found in 1994 that many States use 
funds intended for the working poor for families on AFDC and 
that 5 of 6 states they visited maintained waiting lists for 
subsidies--40,000 long in Texas.
                 History of Current Child Care Programs

    The Family Support Act of 1988 (P.L. 100-485) amended Aid 
to Families with Dependent Children (AFDC) to require States to 
``guarantee'' child care services for welfare recipients who 
are required to participate in education, training, or work 
activities. This provision was based on the concept of a mutual 
obligation; i.e., that the welfare parent had a duty to prepare 
for work through education and training and that, in return, 
the welfare agency would provide a cash welfare benefit, 
training and work activities, and necessary support services 
such as child care and medical coverage. Prior to enactment of 
the Family Support Act, Federal law recognized the child care 
needs of AFDC families only by allowing State agencies to 
disregard a certain amount of work-related child care expenses 
from the family's income when calculating eligibility and 
benefit levels.
    In addition to the child care entitlement for AFDC 
recipients in education or training, the Family Support Act 
also created a program known as Transitional Child Care. This 
program requires States to continue to guarantee child care 
services, for up to 12 months, to families that have lost AFDC 
eligibility because of increased earnings, but who need child 
care to remain employed. This program was intended to address 
the concern that a lack of affordable child care is often a 
barrier in the process of leaving welfare for work, or for 
remaining off welfare.
    Despite enactment of the Family Support Act in 1988, debate 
continued in Congress about the availability, affordability, 
and quality of the Nation's child care services, including the 
extent to which the child care needs of non-welfare, low-income 
working families were being met. In 1990, Congress agreed on a 
child care package that created two new State grant programs: 
the Child Care and Development Block Grant, and the At-Risk 
Child Care program. Both programs were included in the Omnibus 
Budget Reconciliation Act of 1990 (P.L. 101-508).
    These two programs are self-contained and were developed 
largely independent of one another; however, they share certain 
broad policy goals. First, both programs are aimed at improving 
the availability of child care services for low-income working 
families. Second, both programs provide flexibility to States 
in administering and delivering child care services. Third, 
both programs contain features emphasizing parental choice. And 
finally, both rely on States, rather than the Federal 
Government, to regulate child care. Differences between the two 
programs relate to State administration, payment rates, 
eligibility, sectarian care, and funding. In addition, the 
CCDBG differs from the At-Risk and other child care programs by 
having a portion of funds set aside for activities to improve 
the quality of child care services.
    Together with the three AFDC-related child care programs, 
the CCDBG has made significant contributions in meeting the 
child care needs of low-income families. Nevertheless, while 
the welfare-related child care programs have increased the 
level of resources available, they also have complicated the 
design and delivery of child care services due to different 
eligibility criteria and other requirements. Based on field 
research conducted in several States, in testimony before the 
committee in March 1995, the GAO reported that serious service 
gaps exist as a result of these different requirements. These 
gaps can interfere with a parent's ability to work or to look 
for work. In particular, GAO found service gaps resulting from 
different categorical and income eligibility criteria in the 
various programs, restrictions in 2 programs on the provision 
of child care while parents are engaged in job search, and time 
limits in 1 program on the duration of subsidized child care.

       Child Care and Development Block Grant Amendments of 1995

    The purposes of the Child Care and Development Block Grant 
Amendments Act of 1995 are to streamline Federal support for 
child care by combining existing discretionary programs into a 
single grant to States and to improve and build upon the 
strengths of the CCDBG. Two small discretionary programs--State 
Dependent Care Planning and Development Grants and Child 
Development Associate Scholarship Assistance--will be 
consolidated into the CCDBG. Under a key feature of the 
legislation, all Federal funds used by States for child care, 
regardless of their source, will be governed by a single set of 
rules and requirements. Using the existing State systems 
developed to implement the CCDBG in 1990, these rules and 
regulations are designed to give flexibility to States in 
administering their child care programs and to assure 
continuous services to families regardless of changes in their 
work or welfare status. Use of a sliding fee scale will enable 
States to serve all low-income working families, including 
those dependent on welfare, through a single program.
    Under the proposal, minimum Federal health and safety 
standards now required by the CCDBG will be maintained and will 
apply to all federally funded child care. The proposal 
addresses the need to improve the quality of available child 
care services by maintaining a set-aside for quality 
improvement activities, but giving States greater flexibility 
in the use of the funds. States will be required to provide 
comprehensive consumer education information to parents through 
referral and resource activities that will enhance access to 
quality child care and honor parental choice. Beyond this 
requirement, States will have increased discretion in the use 
of quality improvement funds.
    The legislation makes other improvements in the current 
CCDBG designed to enhance State flexibility and make child care 
services more responsive to the needs of low-income families. 
The legislation also includes several important provisions 
intended to improve the availability of quality child care 
services for Native American children.

             III. Legislative History and Committee Action

    A hearing was held on February 16, 1995, on the Child Care 
and Development Block Grant in the Committee on Labor and Human 
Resources' Subcommittee on Children and Families. The Committee 
on Labor and Human Resources held a hearing on the impact of 
welfare reform on child care on March 1, 1995.
    Senate bill 850 was introduced on May 24, 1995, by Senators 
Kassebaum, Coats, Jeffords, Kennedy, Dodd, and Inouye and was 
referred to the Committee on Labor and Human Resources. The 
Committee on Labor and Human Resources considered S. 850 in an 
executive session held on Friday, May 26, 1995. No amendments 
were offered. The bill was adopted by a unanimous roll call 
vote and reported favorably to the full Senate.
                          IV. Committee Views

                             general goals

    The committee has two general goals for this legislation: 
(1) to consolidate and streamline Federal child care programs 
into a seamless system of child care services; and (2) to 
preserve the accessibility and affordability of quality child 
care for low-income working families as well as families 
transitioning off welfare assistance.

                               section 2

    Section 2 of the bill makes several amendments to the Child 
Care and Development Bloc Grant Act of 1990.

Section 2(a)

    Section 2(a) authorizes $1 billion for fiscal year 1996 and 
such sums as may be necessary for each of fiscal years 1997 
through 2000. The committee believes that it is important to 
preserve current Federal funding for child care with potential 
for growth to account for inflation, particularly as Congress 
and the States attempt to move more welfare recipients into the 
workplace.

Section 2(b)

    States are given greater discretion in determining the 
appropriate lead agency (governmental or nongovernmental) to 
administer the program. This section also requires that States 
give sufficient notice of public hearings on the development of 
the State plan. The committee included this provision in order 
to ensure that all interested parties have an opportunity to 
participate in the development of the State plan.

Section 2(c)

    Section 2(c) includes several amendments. The committee 
included a provision to replace the requirement that providers 
not subject to licensing or regulation be registered with the 
State with a requirement that the State implement mechanisms to 
ensure proper payment to such providers. The purpose of this is 
to ensure that such providers are not subject to burdensome 
requirements. This provision does not exempt these providers' 
from complying with requirements of this Act, such as the 
minimum health and safety standards. It is not the intent of 
this committee to restrict or in any way discourage States from 
providing information that may be educational or helpful to 
such providers.
    This section also includes an amendment that would require 
the Secretary of Health and Human Services to develop minimum 
standards for Indian tribes and tribal organizations in lieu of 
State licensing requirements. The Secretary is to take into 
consideration the tribe's needs and available resources. This 
amendment recognizes that tribes are sovereign and have unique 
child care needs that need to be addressed appropriately.
    The committee has eliminated several requirements for the 
State plan in order to reduce burdensome requirements on 
States. The committee has maintained a set-aside for States for 
use to improve the quality of child care and increase the 
availability of before- and after-school care, infant care, and 
after-hours care (child care provided between the hours of 5 
p.m. and 8 a.m.). States have been given greater flexibility in 
the use of these funds. The quality set-aside has been 
demonstrated to be critical in improving the quality of child 
care. According to a recent national study of center-based 
child care, entitled ``Cost, Quality, and Child Outcomes'' 
(January 1995), ``Child care at most centers in the United 
States is poor to mediocre, with almost half of the infants and 
toddlers in rooms having less than minimal quality.'' As 
Congress and the States proceed with welfare reform, the demand 
for child care will increase dramatically as more and more 
welfare recipients are required to work. Even if Congress makes 
no changes to the current welfare system, waiting lists for 
child care already exist in almost every State. If the quality 
set-aside is not preserved, States will not have funds 
available to improve the quality of child care.
    A cap of 5 percent on administrative costs is included in 
the act. To help States implement this provision, the committee 
expects the Department of Health and Human Services to issue 
regulations, in a timely manner and prior to the deadline for 
submission of State plans, that define and determine true 
administrative costs, as distinct from expenditures for 
services. The committee does not view the following as 
administrative costs: eligibility determination and 
redetermination, preparation and participation in judicial 
hearings, child care placement, management (licensing, 
inspection, plan development, reviews and supervision), 
recruitment of child care homes and institutions, rate setting, 
resource and referral, training, automation and data collection 
costs. All of the aforementioned are an integral part of 
service delivery and should not be considered administrative 
costs.

Section 2(d)

    This section maintains the requirement that States 
implement a sliding fee scale, however, a new provision was 
added requiring States to ensure that ``there is a 
representative distribution of funding among the working poor 
and recipients of Federal welfare assistance.'' The act also 
requires States to extend the sliding fee scale from its 
current limit of 75 percent of the State median income to 100 
percent of the State median income. The committee included 
these amendments to ensure that low-income working families 
would receive subsidies under this act. Due to limited 
resources and an inability to fund AFDC-JOBS match rates, 
States have used an increasing amount of funds received under 
Child Care and Development Block Grant to provide child care 
for welfare recipients. This has resulted in many low-income 
working families, who are eligible for subsidies, being placed 
on a waiting list. In addition, the committee believes that 
families should make some contribution, where feasible, to 
cover the costs of child care for their children. This 
reinforces the shared responsibility between parents and the 
government. However, the committee believes these funds should 
be distributed equitably among eligible recipients.
Section 2(e)

    This section requires States to use their quality 
improvement set-aside for referral and resource activities in 
addition to any of the other allowable activities States 
choose. The committee intends that this provision will give 
States greater flexibility in their use of set-aside funds. 
States will be required to use some portion of their quality 
improvement funds for resource and referral systems that 
provide comprehensive consumer education information to 
parents. However, it is the intent of the committee that States 
also use part of their set-aside funds for other activities to 
enhance the quality and availability of child care services. 
The committee included language which allows States to use 
funds to increase the availability of before- and after-school 
care, infant care, and care between the hours of 5 p.m. and 8 
a.m. The committee included these as allowable activities under 
the quality set-aside in recognition of the increasing demand 
for and scarcity of such care.
    This section also includes language that prohibits States 
from discriminating against providers, who are legally 
operating in a State, but not required to be regulated by the 
State, who want to participate in resource and referral 
systems. Such participation is entirely voluntary on the part 
of the providers. The committee believes that States should 
identify such providers as legally operating and unregulated 
when distributing information to parents and the public.

Section 2(f)

    The committee repeals the requirement that States use a 
portion of the quality set-aside for increasing the 
availability of before- and after-school care and early child 
development. These activities, instead, become allowable 
activities under the quality set-aside. Nothing in this act 
prohibits States from using funds allocated toward child care 
subsidies to increase the availability of before- and after-
school care and early childhood development activities. The 
committee would encourage States to use funds for increasing 
the number and availability of child care providers, if the 
lack of supply is a barrier to providing child care.

Section 2(g)

    The committee eliminates the requirement that the Secretary 
withhold further payments to a State when a State is found 
noncompliant until the noncompliance is corrected. The 
committee chose to strike this provision as it did not want to 
penalize recipients of child care assistance by withholding 
payments to States indefinitely. Instead, the committee decided 
to provide the Secretary with discretion in sanctioning States. 
The Secretary is given the option of imposing additional 
requirements on the State, requiring a State to reimburse the 
Secretary the amount that was improperly expended, deduct from 
the State's administrative allotment an amount equal to or less 
than the misspent funds, or any combination of these options. 
The committee believes it is important that any sanctions 
should be designed to ensure the States' compliance while 
limiting the impact of those sanctions on the families 
dependent upon Federal assistance to meet their child care 
needs.
Section 2(h)

    The committee amends the act to reduce State reporting 
requirements and to require States to submit reports biennially 
instead of annually. The committee intends to relieve States of 
overly burdensome reporting requirements.

Section 2(i)

    The committee has amended the act to require the Secretary 
to report to Congress biennially. This is consistent with the 
States requirement to submit reports biennially.

Section 2(j)

    Indian tribes and tribal organizations are allowed to use 
funds for construction or renovation of facilities with the 
approval of the Secretary. This provision is intended to assist 
tribes that are not able to provide child care services under 
this act because of the lack of appropriate facilities. Lack of 
adequate facilities is a barrier to offering child care 
services that Indian tribes and tribal organizations often 
face. The other provision under this section gives Indian 
tribes and tribal organizations the same benefit that States 
currently receive--the reallocation of unused tribal funds to 
other tribes or tribal organizations in proportion to the 
original allotments under this act. Previously, unused tribal 
funds were returned to the Federal Treasury. This provision 
ensures that Indian tribes and tribal organizations are 
provided the opportunity to utilize fully funds set aside for 
their use.

Section 2(k)

    This section adds a provision allowing funds under this act 
to be used for a deposit if a deposit is ordinarily required by 
the child care provider. The committee is concerned that many 
child care providers regularly require parents to pay a deposit 
before their children are enrolled for services, and that such 
deposits can be barriers to receiving services for poor 
families who lack the funds to pay them. The committee intends 
that this provision will eliminate this barrier by allowing 
States to use CCDBG funds to pay these deposits when necessary 
to enable a family to receive child care services.
    This section also expands the definition of who can be 
considered an eligible relative child care provider in order to 
remove barriers to providing child care services under this 
act, particularly for Indian tribes and tribal organizations. 
Added to the definition of relative child care provider are 
great grandchild and sibling when the sibling lives in a 
separate residence from the child. These providers will have to 
comply with any applicable requirements that govern child care 
provided by a relative, be that State requirements or tribal 
requirements.

Section 2(l)

    This section requires that any Federal funds used by States 
for child care services must comply with the requirements, 
standards, and criteria of this act. In addition, these funds 
will also be subject to any regulations that are promulgated 
under this act. States must submit a uniform State plan 
concerning the State's child care system that includes how the 
State will consolidate Federal funds into one State child care 
system. The committee does not intend this provision to apply 
to Federal funds used for children's nutrition programs, such 
as the Child Care and Adult Food program; for programs that 
provide comprehensive services to children and families in 
which child care may be one of the services, such as the Head 
Start program and the Chapter 1 program; or for programs that 
provide child care for a specific population, such as the 
military programs and Native Hawaiian Family Centers. This 
provision applies to Federal funds allocated to the States that 
are used to provide child care assistance and are subject to 
State requirements
    Under current law, States receive Federal funds that are 
used for child care under several different programs with 
different eligibility criteria, standards provisions, and other 
requirements. It is the committee's intent that States 
administer all Federal funds used for child care under a single 
set of rules and requirements, regardless of the Federal source 
of these funds. The committee expects that this provision will 
result in more efficient State administration of child care 
services and will facilitate the establishment of a 
``seamless'' delivery system, so that families are not faced 
with disruption in their child care arrangements due to changes 
in economic circumstances or participation in other programs 
(i.e., welfare, job training, educational programs).

                               section 3

    The committee has conveyed its view that child care is a 
critical component in the success of welfare reform and that 
the Federal Government has a responsibility to provide funding 
and leadership with respect to child care. Nothing in this 
section should be construed to indicate or suggest the 
committee's view on entitlement or other mandatory funding 
mechanisms for the CCDBG.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 1, 1995.
Hon. Nancy Landon Kassebaum,
Chairman, Committee on Labor and Human Resources, U.S. Senate, 
        Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
reviewed S. 850, the Child Care and Development Block Grant 
Amendments of 1995, as ordered reported by the Senate Committee 
on Labor and Human Resources on May 26, 1995.
    CBO estimates that enactment of S. 850 would not affect 
direct spending or receipts. Therefore, pay-as-you-go 
procedures would not apply to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dorothy 
Rosenbaum.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
               congressional budget office cost estimate

    1. Bill number: S. 850.
    2. Bill title: Child Care and Development Block Grant 
Amendments of 1995.
    3. Bill status: As ordered reported by the Senate Committee 
on Labor and Human Resources on May 26, 1995.
    4. Bill purpose: S. 850 would extend the authorization of 
appropriations for the Child Care and Development Block Grant 
through 2000. Currently the program is authorized only through 
1995. The bill authorizes to be appropriated $1 billion in 1996 
and such sums as may be necessary through 2000.
    5. Estimated cost to the Federal Government: The budgetary 
effects of the legislation are summarized below, both with and 
without adjusting the authorization for inflation after 1996.

------------------------------------------------------------------------
                      1995     1996     1997     1998     1999     2000 
------------------------------------------------------------------------
Spending under                                                          
 current law:                                                           
    Budget                                                              
     authority \1\      935  .......  .......  .......  .......  .......
    Estimated                                                           
     outlays......      918      947      418       65        0        0
                                                                        
                      With adjustment for inflation                     
Proposed changes:                                                       
    Estimated                                                           
     authorization  .......    1,000    1,034    1,071    1,107    1,146
    Estimated                                                           
     outlays......  .......      300      969    1,251    1,087    1,125
Projected spending                                                      
 under S. 850:                                                          
    Estimated                                                           
     authorization                                                      
      \1\.........      935    1,000    1,034    1,071    1,107    1,146
    Estimated                                                           
     outlays......      918    1,247    1,386    1,316    1,087    1,125
                                                                        
                    Without adjustment for inflation                    
Proposed changes:                                                       
    Estimated                                                           
     authorization  .......    1,000    1,000    1,000    1,000    1,000
    Estimated                                                           
     outlays......  .......      300      950    1,200    1,000    1,000
Projected spending                                                      
 under S. 850:                                                          
    Estimated                                                           
     authorization                                                      
      \1\.........      935    1,000    1,000    1,000    1,000    1,000
    Estimated                                                           
     outlays......      918    1,247    1,368    1,265    1,000    1,000
------------------------------------------------------------------------
\1\ The 1995 figure is the amount actually appropriated for that fiscal 
  year.                                                                 
                                                                        
Note: Details may not add to totals due to rounding.                    

    The costs of this bill fall within budget function 600.
    6. Base of estimate: S. 850 reauthorizes the Child Care and 
Development Block Grant at $1 billion in 1996 and such sums as 
may be necessary through 2000. CBO estimates the authorization 
in years after 1996 under two scenarios. Under the first 
scenario, the stated amount for 1996 is adjusted for projected 
inflation. Under the second scenario, the projected 
authorization level is equal to the stated amount for 1996. 
Estimated outlays assume full appropriation of amounts 
authorized.
    In recent fiscal years, including 1995, the appropriation 
for the Child Care and Development Block Grant has stipulated 
that funds shall not be available for obligation until the last 
day of the fiscal year. Thus, CBO's budget projections for this 
program assume that outlays from 1995 and prior years' budget 
authority will be delayed. This estimate, however, assumes that 
the obligation delay will not continue in fiscal years after 
1995. Therefore, outlays in 1996 through 1998 are estimated to 
be higher than they would be if the appropriators continued the 
obligation delay.
    The bill would also repeal the State Dependent Care 
Development Grants Act and the Child Development Associate 
Scholarship Assistance Act. Because the current authorization 
of appropriations for these two programs ends after 1995, CBO 
does not estimate any change in the level authorized to be 
appropriated for these programs.
    Section 2(l) of the bill would require that all programs 
providing child care services and using federal funds meet the 
requirements, standards, and criteria of the Child Care and 
Development Block Grant. Because CBO has no basis for 
interpreting what child care services would be affected, we do 
not estimate any effect on the federal budget. However, if the 
language were interpreted broadly, a wide variety of programs 
could be affected, including the Child and Adult Care Food 
Program, where children from families with incomes above 100 
percent median state family income are served. Committee staff 
indicate that the committee report will make clear that a 
narrow interpretation is intended.
    7. Pay-as-you-go considerations: If section 2(l) were 
interpreted broadly, direct spending could be affected by the 
bill. Otherwise, pay-as-you-go procedures would not apply.
    8. Estimated cost to State and local governments: The bill 
limits administrative costs to five percent of the amount of 
payments under the block grant. To the extent that a state 
spends a higher percentage on administration, the state would 
have to either lower its administrative costs or spend more 
state funds.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Dorothy Rosenbaum.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.
                    VI. Regulatory Impact Statement

    The committee has determined that there will be minimal 
increases in the regulatory burden imposed by this bill.

                    VII. Section-by-Section Analysis

    Section 1 establishes the short title of the act to be the 
``Child Care and Development Block Grant Amendments Act of 
1995.''
    Section 2 contains amendments to the Child Care and 
Development Block Grant Act of 1990.
    Section 2(a) amends section 658B of the act to authorize 
appropriations as follows: $1 billion for fiscal year 1996, and 
such sums as may be necessary for each of fiscal years 1997-
2000.
    Section 2(b) amends section 658D(b) of the act to allow the 
State lead agency to administer financial assistance received 
under the act through other ``governmental or nongovernmental'' 
agencies (instead of other ``State'' agencies); to require that 
``sufficient time and Statewide distribution of the notice'' be 
given of the public hearing on development of the State plan; 
and strikes language on issues that may be considered during 
consultation with local governments on development of the State 
plan.
    Section 2(c)(1) amends section 758E(b) of the Act to 
require that State plans cover a 2-year period, instead of 3 
years for the initial plan and 2 years for subsequent plans.
    Section 2(c)(2) amends section 658(c) of the act to strike 
an outdated provision; to replace the requirement that 
providers not subject to licensing or regulation be registered 
with the State with a requirement that the State implement 
mechanisms to ensure proper payment to providers; to require 
the Secretary to develop minimum standards for Indian tribes 
and tribal organizations receiving assistance under the act, in 
lieu of State or local licensing or regulatory requirements; to 
strike subparagraphs (H) and (I) related to reduction in 
standards and reviews of State licensing and regulatory 
requirements; and to reserve 15 percent of each State's 
allotment for activities to improve quality of child care, a 
reduction from the 25 percent for both quality improvement and 
before- and after-school child care services contained in the 
1990 law.
    Section 2(c)(2) also amends section 658(c) of the act to 
add new language that places a 5 percent limit on State use of 
funds for administrative costs.
    Section 2(d)(1) amends section 658E(c)(5) of the act to 
require that the sliding fee scale developed by the State 
``ensures a representative distribution of funding among the 
working poor and recipients of Federal welfare assistance.''
    Section 2(d)(2) amends section 658P(4)(B) of the act to 
change the definition of ``eligible child'' to one whose family 
income does not exceed 100 percent of the State median, 
increased from 75 percent.
    Section 2(e) amends section 658(G) of the act to require 
States to use their quality improvement set-aside for resource 
and referral activities, including ``providing comprehensive 
consumer education to parents and the public, referrals that 
honor parental choice, and activities designed to improve the 
quality and availability of child care,'' and for one or more 
``other activities,'' which include those listed in the current 
section 658G, plus activities to increase the availability of 
before- and after-school care, infant care, and child care 
between the hours of 5 p.m. and 8 a.m.
    Section 2(e) also adds new language to section 658G of the 
act that will prohibit States from discriminating against 
providers that wish voluntarily to participate in resource and 
referral systems, that are operating legally within the State 
but that are exempt from State licensing requirements.
    Section 2(f) repeals section 658H of the act related to 
early childhood development before- and after-school services.
    Section 2(g) amends section 658I(b)(2)(A) of the act to 
strike the requirement that the Secretary withhold further 
payments to a State, in case of a finding of noncompliance, 
until the noncompliance is corrected. Instead, the amendment 
authorizes the Secretary, in such cases, to impose additional 
program requirements on the State, require that the State 
reimburse the Secretary for any improperly spent funds, or 
deduct from the administrative portion of the State's 
subsequent allotment an amount equal to or less than the 
misspent funds, or a combination of such options. The amendment 
also strikes sections 658I(b)(2)(B) and (C) related to 
additional sanctions and notice of such additional sanctions.
    Section 2(h) amends section 658K of the act to require 
States to submit reports every 2 years, rather than every year, 
with the first report due no later than December 31, 1996. The 
amendment also consolidates current requirements that States 
include information in these reports on the type of Federal 
child care and preschool programs serving children in the 
State, and requires States to describe the extent and manner to 
which resource and referral activities are being carried out by 
the State. The amendment strikes the current requirement for 
information on the type and number of child care programs, 
providers, caregivers, and support personnel in the State, and 
strikes the provision related to review findings of State 
licensing and regulatory requirements.
    Section 2(i) amends section 658L of the act to require the 
Secretary to prepare and submit bi-annual reports, rather than 
annual, with the first report due no later than July 31, 1997; 
and replaces the reference to the House Education and Labor 
Committee with the House Economic and Educational Opportunities 
Committee.
    Section 2(j) amends section 658O(c) of the act, related to 
payments for the benefit of Indian children, to add new 
provisions allowing the use of funds by Indian tribes or tribal 
organizations for construction or renovation of facilities, 
upon request by the tribe or tribal organization and subject to 
approval by the Secretary. Section 2(j) also amends section 
658O(e) of the act to allow the Secretary to reallocate any 
funds provided to a tribe or tribal organization that are not 
required under the tribe or tribal organization's plan to other 
tribes or tribal organizations in proportion to the other 
tribes or tribal organizations original allotments in the 
period for which the allotment is made available.
    Section 2(k)(1) amends section 658P(2) of the act to add 
the following as an allowable use of a child care certificate: 
``as a deposit for child care services if such a deposit is 
required of other children being cared for by the provider.''
    Section 2(k)(2) amends section 658P(5)(b) of the act to 
revise the definition of relative child care provider by adding 
great-grandchild and sibling (if the provider lives in a 
separate residence) to the list of eligible children--by 
striking the requirement that such providers be registered--and 
by requiring such providers to comply with any ``applicable'' 
requirements governing child care provided by a relative, 
instead of any ``State'' requirements governing such care.
    Section 2(l) amends the act to create a new section 658T 
that requires States that use any Federal funds for child care 
services to ensure that such services meet the requirements, 
standards and criteria of the CCDBG and any regulations issued 
under the CCDBG. These funds must be administered through a 
uniform State plan and, to the maximum extent practicable, 
shall be transferred to the lead agency and integrated into the 
CCDBG program.
    Section 3 sets forth 5 findings relative to the importance 
of child care in welfare reform and efforts to move parents 
toward self-sufficiency and establishes the sense of the Senate 
that ``the Federal Government has a responsibility to provide 
funding and leadership with respect to child care.''
    Section 4(a) repeals the State Dependent Care Development 
Grants Act.
    Section 4(b) repeals the Child Development Associate 
Scholarship Assistance Act.
    Section 4(c) directs the Secretary of HHS, after 
consultation with the appropriate committees of Congress and 
the Director of the Office of Management and Budget, to prepare 
and submit to Congress, within 6 months after enactment of this 
act, a legislative proposal containing technical and conforming 
amendments that reflect the amendments and repeals made by this 
act.

                     VIII. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

           CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990

          * * * * * * *

          Subchapter C--Child Care and Development Block Grant

          * * * * * * *

SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

    [There are authorized to be appropriated to carry out this 
subchapter, $750,000,000 for fiscal year 1991, $825,000,000 for 
fiscal year 1992, $925,000,000 for fiscal year 1993, and such 
sums as may be necessary for each of the fiscal years 1994 and 
1995.]
    There are authorized to be appropriated to carry out this 
subchapter $1,000,000,000 for fiscal year 1996; and such sums 
as necessary for each of the fiscal years 1997 through 2000.
          * * * * * * *

SEC. 658D. LEAD AGENCY.

          * * * * * * *
    (b) Duties.--
          (1) *  *  *
                  (A) administer, directly or through other 
                [State] governmental or nongovernmental 
                agencies, the financial assistance received 
                under this subchapter by the State;
          * * * * * * *
                  (C) in conjunction with the development of 
                the State plan as required under subparagraph 
                (B), hold at least one hearing in the State 
                with sufficient time and Statewide distribution 
                of the notice of such hearing to provide to the 
                public an opportunity to comment on the 
                provision of child care services under the 
                State plan; and
          * * * * * * *
          (2) Development of plan.--In the development of the 
        State plan described in paragraph (1)(B), the lead 
        agency shall consult with appropriate representatives 
        of units of general purpose local government. [Such 
        consultations may include consideration of local child 
        care needs and resources, the effectiveness of existing 
        child care and early childhood development services, 
        and the methods by which funds made available under 
        this subchapter can be used to effectively address 
        local shortages.]
SEC. 658E. APPLICATION AND PLAN.

          * * * * * * *
    (b) Period Covered by Plan.--The State plan contained in 
the application under subsection (a) shall be designed to be 
[implemented--
          [(1) during a 3-year period for the initial State 
        plan; and
          [(2) during a 2-year period for subsequent State 
        plans.] implemented during a 2-year period.
    (c) * * *
          * * * * * * *
          (2) * * *
                  (A) * * *
          * * * * * * *
                          (iii) child care certificates offered 
                        to parents selecting the option 
                        described in clause (i)(II) shall be of 
                        a value commensurate with the subsidy 
                        value of child care services provided 
                        under the option described in clause 
                        (i)(I).
                          [except that nothing in this 
                        subparagraph shall require a State to 
                        have a child care certificate program 
                        in operation prior to October 1, 1992.]
          * * * * * * *
                  (E) * * *
          * * * * * * *
                          [(ii) providers within the State that 
                        are not required to be licensed or 
                        regulated under State or local law are 
                        required to be registered with the 
                        State prior to payment being made under 
                        this subchapter, in accordance with 
                        procedures designed to facilitate 
                        appropriate payment to such providers, 
                        and to permit the State to furnish 
                        information to such providers, 
                        including information on the 
                        availability of health and safety 
                        training, technical assistance, and any 
                        relevant information pertaining to 
                        regulatory requirements in the State. 
                        and that such providers shall be 
                        permitted to register with the State 
                        after selection by the parents of 
                        eligible children and before such 
                        payment is made.]
                          (ii) the State will implement 
                        mechanisms to ensure that appropriate 
                        payment mechanisms exist so that proper 
                        payments under this subchapter will be 
                        made to providers within the State and 
                        to permit the State to furnish 
                        information to such providers. In lieu 
                        of any licensing and regulatory 
                        requirements applicable under State and 
                        local law, the Secretary, in 
                        consultation with Indian tribes and 
                        tribal organizations, shall develop 
                        minimum child care standards (that 
                        appropriately reflect tribal needs and 
                        available resources) that shall be 
                        applicable to Indian tribes and tribal 
                        organization receiving assistance under 
                        this subchapter.
          * * * * * * *
                  [(H) Reduction in standards.--Provide 
                assurances that if the State reduces the level 
                of standards applicable to child care services 
                provided in the State on the date of enactment 
                of this subchapter, the State shall inform the 
                Secretary of the rationale for such reduction 
                in the annual report of the State described in 
                section 658K.
                  [(I) Review of state licensing and regulatory 
                requirements.--Provide assurances that not 
                later than 18 months after the date of the 
                submission of the application under section 
                658E, the State will complete a full review of 
                the law applicable to, and the licensing and 
                regulatory requirements and policies of, each 
                licensing agency that regulates child care 
                services and programs in the State unless the 
                State has reviewed such law, requirements, and 
                policies in the 3-year period ending on the 
                date of the enactment of this subchapter.]
          * * * * * * *
          (3) Use of block grant funds.--
          * * * * * * *
                  (C) Activities to improve the quality of 
                child care [and to increase the availability of 
                early childhood development and before- and 
                after-school care services].--The State shall 
                reserve [25] 15 percent of the amounts provided 
                to the State for each fiscal year under this 
                subchapter to carry out activities designed to 
                improve the quality of child care (as described 
                in section 658G) [and to provide before-and 
                after-school and early childhood development 
                services (as described in section 658H)].
                  (D) Limitation on administrative costs.--Not 
                more than 5 percent of the aggregate amount of 
                payments received under this subchapter by a 
                State in each fiscal year may be expended for 
                administrative costs incurred by such State to 
                carry out all its functions and duties under 
                this subchapter.
          * * * * * * *
          (5) Sliding fee scale.--The State plan shall provide 
        that the State will establish and periodically revise, 
        by rule, a sliding fee scale that provides for cost 
        sharing by the families that receive child care 
        services for which assistance is provided under this 
        subchapter and that ensures a representative 
        distribution of funding among the working poor and 
        recipients of Federal welfare assistance.
          * * * * * * *

SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

    [A state] (a) In General.--A State that receives financial 
assistance under this subchapter shall use [not less than 20 
percent of] the amounts reserved by such State under section 
658E(c)(3)(C) for each fiscal year for [one or more of the 
following]: carrying out the resource and referral activities 
described in subsection (b), and for one of more of the 
activities described in subsection (c).
          [(1) Resource and referral programs.--Operating] (b) 
        Resource and Referral Programs._The activities 
        described in this subsection are operating directly or 
        providing financial assistance to private nonprofit 
        organizations or public organizations (including units 
        of general purpose local government) for the 
        development, establishment, expansion, operation, and 
        coordination of resource and referral programs 
        specifically related to child care, including providing 
        comprehensive consumer education to parents and the 
        public, referrals that honor parental choice, and 
        activities designed to improve the quality and 
        availability of child care.
    (c) Other Activities.--The activities described in this 
section are the following:
          [(2)] (1) Grants or loans to assist in meeting state 
        and local standards.--Making grants or providing loans 
        to child care providers to assist such providers in 
        meeting applicable State and local child care 
        standards.
          [(3)] (2) Monitoring of compliance with licensing and 
        regulatory requirements.--Improving the monitoring of 
        compliance with, and enforcement of, State and local 
        licensing and regulatory requirements (including 
        registration requirements).
          [(4)] (3) Training.--Providing training and technical 
        assistance in areas appropriate to the provision of 
        child care services, such as training in health and 
        safety, nutrition, first aid, the recognition of 
        communicable diseases, child abuse detection and 
        prevention, and the care of children with special 
        needs.
          [(5)] (4) Compensation.--Improving salaries and other 
        compensation paid to full- and part-time staff who 
        provide child care services for which assistance is 
        provided under this subchapter.
          (5) Before- and after-school activities.--Increasing 
        the availability of before- and after-school care.
          (6) Infant care.--Increasing the availability of 
        child care for infants under the age of 18 months.
          (7) Nontraditional work hours.--Increasing the 
        availability of child care between the hours of 5:00 
        p.m. and 8:00 a.m.
    (d) Nondiscrimination.--With respect to child care 
providers that comply with applicable State law but which are 
otherwise not required to be licensed by the State, the State, 
in carrying out this section, may not discriminate against such 
a provider if such provider desires to participate in resource 
and referral activities carried out under subsection (b).
[SEC. 658H. EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOOL 
                    SERVICES.

    [(a) In General.--A State that receives financial 
assistance under this subchapter shall use not less than 75 
percent of the amounts reserved by such State under section 
658E(c)(3)(C) for each fiscal year to establish or expand and 
conduct, through the provision of grants or contracts, early 
childhood development or before- and after-school child care 
programs, or both.
    [(b) Program Description.--Programs the receive assistance 
under this section shall--
          [(1) in the case of early childhood development 
        programs, consist of services that are not intended to 
        serve as a substitute for a compulsory academic 
        programs but that are intended to provide an 
        environment that enhances the educational, social, 
        cultural emotional, recreational development of 
        children; and
          [(2) in the case of before- and after-school child 
        care programs--
                  [(A) be provided Monday through Friday, 
                including school holidays and vacation periods 
                other than legal public holidays, to children 
                attending early childhood development programs, 
                kindergarten, or elementary or secondary school 
                classes during such times of the day and on 
                such days that regular instructional services 
                are not in session; and
                  [(B) not be intended to extend or replace the 
                regular academic program.
    [(c) Priority for Assistance.--In awarding grants and 
contracts under this section, the State shall give the highest 
priority to geographic areas within the State that are eligible 
to receive grants under section 1006 of the Elementary and 
Secondary Education Act of 1965, and shall then give priority 
to--
          [(1) any other areas with concentrations of poverty; 
        and
          [(2) any areas with very high or very low population 
        densities.]

SEC. 658I. ADMINISTRATION AND ENFORCEMENT.

          * * * * * * *
    (b) Enforcement.--
          * * * * * * *
          (2) Noncompliance.--
                  (A) * * *
          * * * * * * *
                          (ii) * * *
                the Secretary shall notify the State of the 
                [finding and that no further payments may be 
                made to such State under this subchapter (or, 
                in the case of noncompliance in the operation 
                of a program or activity, that no further 
                payments to the State will be made with respect 
                to such program or activity) until the 
                Secretary is satisfied that there is no longer 
                any such failure to comply or that the 
                noncompliance will be promptly corrected.] 
                finding and may impose additional program 
                requirements on the State, including a 
                requirement that the State reimburse the 
                Secretary for any funds that were improperly 
                expended for purposes prohibited or not 
                authorized by this subchapter, that the 
                Secretary deduct from the administrative 
                portion of the State allotment for the 
                following fiscal year an amount that is less 
                than or equal to any improperly expended funds, 
                or a combination of such options.
                  [(B) Additional sanctions.--In the case of a 
                finding of noncompliance made pursuant to 
                subparagraph (A), the Secretary may, in 
                addition to imposing the sanctions described in 
                such subparagraph, impose other appropriate 
                sanctions, including recoupment of money 
                improperly expended for purposes prohibited or 
                not authorized by this subchapter, and 
                disqualification from the receipt of financial 
                assistance under this subchapter.
                  [(C) Notice.--The notice required under 
                subparagraph (A) shall include a specific 
                identification of any additional sanction being 
                imposed under subparagraph (B).]
          * * * * * * *

SEC. 658K. [ANNUAL REPORT] REPORTS AND AUDITS.

    (A) [Annual Report] Reports._Not later than [December 31, 
1992, and annually thereafter] December 31, 1996, and every 2 
years thereafter, a State that receives assistance under this 
subchapter shall prepare and submit to the Secretary a report--
          * * * * * * *
        (2) * * *
                  (A) the number of children being assisted 
                with funds provided under this subchapter, and 
                under other Federal child care and pre-school 
                programs and the types of child care programs 
                under which such assistance is provided;
                  [(B) the type and number of child care 
                programs, child care providers, caregivers, and 
                support personnel located in the State;]
                  [(C)] (B) salaries and other compensation 
                paid to full- and part-time staff who provide 
                child care services; and
                  [(D)] (C) activities in the State to 
                encourage public-private partnerships that 
                promote business involvement in meeting child 
                care needs;
          * * * * * * *
          [(4) if applicable, describing, in either the first 
        or second such report, the findings of the review of 
        State licensing and regulatory requirements and 
        policies described in section 658E(c), including a 
        description of actions taken by the State in response 
        to such reviews;]
          [(5)] (4) containing an explanation of any State 
        action, in accordance with section 658E, to reduce the 
        level of child care standards in the State, if 
        applicable; [and]
          [(6)] (5) describing the standards and health and 
        safety requirements applicable to child care providers 
        in the State, including a description of State efforts 
        to improve the quality of child care; and
          (6) describing the extent and manner to which the 
        resource and referral activities are being carried out 
        by the State;
          * * * * * * *

SEC. 658L. REPORT BY SECRETARY.

    Not later than July 31, [1993] 1997, and [annually] bi-
annually thereafter, the Secretary shall prepare and submit to 
the Committee on [Education and Labor] Economic and Educational 
Opportunities of the House of Representatives and the Committee 
on Labor and Human Resources of the Senate a report that 
contains a summary and analysis of the data and information 
provided to the Secretary in the State reports submitted under 
section 658K. Such report shall include an assessment, and 
where appropriate, recommendations for the Congress concerning 
efforts that should be undertaken to improve the access of the 
public to quality and affordable child care in the United 
States.
          * * * * * * *
SEC. 6580. AMOUNTS RESERVED; ALLOTMENTS.

          * * * * * * *
    (c) Payments for the Benefit of Indian Children.--
          * * * * * * *
        (6) Construction or renovation of facilities.--
                  (A) Request for use of funds.--An Indian 
                tribe or tribal organization may submit to the 
                secretary a request to use amounts provided 
                under this subsection for construction or 
                renovation purposes.
                  (B) Determination.--With respect to a request 
                submitted under subparagraph (A), and except as 
                provided in subparagraph (C), upon a 
                determination by the Secretary that adequate 
                facilities are not otherwise available to an 
                Indian tribe or tribal organization to enable 
                such tribe or organization to carry out child 
                care programs in accordance with this 
                subchapter, and that the lack of such 
                facilities will inhibit the operation of such 
                programs in the future, the Secretary may 
                permit the tribe or organization to use 
                assistance provided under this subsection to 
                make payments for the construction or 
                renovation of facilities that will be used to 
                carry out such programs.
                  (C) Limitation.--The Secretary may not permit 
                an Indian tribe or tribal organization to use 
                amounts provided under this subsection for 
                construction or renovation if such use will 
                result in a decrease in the level of child care 
                services provided by the tribe or organization 
                as compared to the level of such services 
                provided by the tribe or organization in the 
                fiscal year preceding the year for which the 
                determination under subparagraph (A) is being 
                made.
                  (D) Uniform procedures.--The Secretary shall 
                develop and implement uniform procedures for 
                the solicitation and consideration of requests 
                under this paragraph.
          * * * * * * *
    (e) Reallotments.--
          (1) In general.--[Any] Except as provided in 
        paragraph (4), any portion of the allotment under 
        subsection (b) to a State that the Secretary determines 
        is not required to carry out a State plan approved 
        under section 658E(d), in the period for which the 
        allotment is made available, shall be reallotted by the 
        Secretary to other States in proportion to the original 
        allotments to the other States.
          * * * * * * *
          (4) Indian tribes or tribal organizations.--Any 
        portion of a grant or contract made to a Indian tribe 
        or tribal organization under subsection (c) that the 
        Secretary determines is not being used in a manner 
        consistent with the provision of this subchapter in the 
        period for with the grant or contract is made 
        available, shall be reallocated by the Secretary to 
        other tribes or organization that have submitted 
        applications under subsection (c) in proportion to the 
        original allocations to such tribes or organizations.
          * * * * * * *
SEC. 658P. DEFINITIONS.

          * * * * * * *
          (2) Child care certificate.--The term ``child care 
        certificate'' means a certificate (that may be a check 
        or other disbursement) that is issued by a State or 
        local government under this subchapter directly to a 
        parent who may use such certificate only as payment for 
        child care services or as a deposit for child care 
        services if such a deposit is required of other 
        children being cared for by the provider. Nothing in 
        this subchapter shall preclude the use of such 
        certificates for sectarian child care services if 
        freely chosen by the parent. For purposes of this 
        subchapter, child care certificates shall not be 
        considered to be grants or contracts.
          * * * * * * *
          (4) * * *
          * * * * * * *
                  (B) whose family income does not exceed [75] 
                100 percent of the State median income for a 
                family of the same size; and
          * * * * * * *
          (5) * * *
          * * * * * * *
                  (B) a child care provider that is 18 years of 
                age or older who provides child care services 
                only to eligible children who are, by affinity 
                or consanguinity, or by court decree, the 
                grandchild, great grandchild, sibling (if the 
                provider lives in a separate residence), niece, 
                or nephew of such provider, if such provider 
                [is registered and] complies with any [State] 
                applicable requirements that govern child care 
                provided by the relative involved.
          * * * * * * *
SEC. 658T. APPLICATION TO OTHER PROGRAMS.

    Notwithstanding any other provision of law, a State that 
uses funding for child care services under any Federal program 
shall ensure that activities carried out using such funds meet 
the requirements, standards, and criteria of this subchapter 
and the regulations promulgated under this subchapter. Such 
sums shall be administered through a uniform State plan. To the 
maximum extent practicable, amounts provided to a State under 
such programs shall be transferred to the lead agency and 
integrated into the program established under this subchapter 
by the State.
          * * * * * * *
                              ----------                              


              [State Dependent Care Development Grants Act

    [Subchapter E--Grants to States for Planning and Development of 
             Dependent Care Programs and for Other Purposes

                    [authorization of appropriations

    [Sec. 670A. For the purpose of making allotments to States 
to carry out the activities described in section 670D, there is 
authorized to be appropriated $13,000,000 for fiscal year 1995.

                              [allotments

    [Sec. 670B. (a) From the amounts appropriated under section 
6701A for each fiscal year, the Secretary shall allot to each 
State an amount which bears the same ratio to the total amount 
appropriated under such section for such fiscal year as the 
population of the State bears to the population of all States, 
except that no State may receive less than $50,000 in each 
fiscal year.
    [(b) For the purpose of the exception contained in 
subsection (a), the term ``State'' does not include Guam, 
American Samoa, the Virgin Islands, the Trust Territory of the 
Pacific Islands, and the Commonwealth of the Northern Mariana 
Islands.

                  [payments under allotments to states

    [Sec. 670C. The Secretary shall make payment, as provided 
by section 6503(a) of title 31, United States Code, to each 
State from its allotment under section 670B from amounts 
appropriated under section 670A.

                           [use of allotments

    [Sec. 670D. (a)(1) Subject to the provisions of subsections 
(c) and (d), amounts paid to a State under section 670C from it 
allotment under section 670B may be used for the planning, 
development, establishment, operation, expansion, or 
improvement by the States, directly or by grant or contract 
with public or private entities, of State and local resource 
and referral systems to provide information concerning the 
availability, types, costs, and locations of dependent care 
services. The information provided by any such system may 
include--
          [(A) the types of dependent care services available, 
        including services provided by individual homes, 
        religious organizations, community organizations, 
        employers, private industry, and public and private 
        institutions;
          [(B) the cost of available dependent care services;
          [(C) the locations in which dependent care services 
        are provided;
          [(D) the forms of transportation available to such 
        locations;
          [(E) the hours during which such dependent care 
        services are available;
          [(F) the dependents eligible to enroll for such 
        dependent care services; and
          [(G) any resource and referral system planned, 
        developed, established, expanded, or improved with 
        amounts paid to a State under this subchapter.
    [(2) The State, with respect to the uses of funds described 
in paragraph (1) of this subsection shall--
          [(A) provide assurances that no information will be 
        included with respect to any dependent care services 
        which are not provided in compliance with the laws of 
        the State and localities in which such services are 
        provided; and
          [(B) provide assurances that the information provided 
        will be the latest information available and will be 
        kept up to date.
    [(b)(1) Subject to the provisions of subsections (c) and 
(d), amounts paid to a State under section 670C from its 
allotment under section 670B may be used for the planning 
development, establishment, operation, expansion, or 
improvement by the States, directly, or by grant or contract, 
with public agencies or private non-profit organizations of 
programs to furnish school-age child care services before and 
after school. Amounts so paid to a State and used for the 
operation of such child care services shall be designed to 
enable children, whose families lack adequate financial 
resources, to participate in before or after school child care 
programs.
    [(2) The State, with respect to the uses of funds described 
in paragraph (1) of this subsection shall--
          [(A) provide assurances, in the case of an applicant 
        that is not a State or local educational agency, that 
        the applicant has or will enter into an agreement with 
        the State or local educational agency, institution of 
        higher education or community center containing 
        provisions for--
                  [(i) the use of facilities for the provision 
                of before or after school child care services 
                (including such use during holidays and 
                vacation periods),
                  [(ii) the restrictions, if any, on the use of 
                such space, and
                  [(iii) the times when the space will be 
                available for the use of the applicant;
          [(B) provide an estimate of the costs of the 
        establishment of the child care service program in the 
        facilities;
          [(C) provide assurances that the parents of school-
        age children will be involved in the development and 
        implementation of the program for which assistance is 
        sought under this Act;
          [(D) provide assurances that the applicant is able 
        and willing to seek to enroll racially, ethnically, and 
        economically diverse school-age children, as well as 
        handicapped school-age children, in the child care 
        service program for which assistance is sought under 
        this Act 1;
          [(E) provide assurances that the child care program 
        is in compliance with State and local child care 
        licensing laws and regulations governing day care 
        services for school-age children to the extent that 
        such regulations are appropriate to the age group 
        served; and
          [(F) provide such other assurance as the chief 
        executive officer of the State may reasonably require 
        to carry out this Act.
    [(c)(1) Except as provided in paragraph (2), of the 
allotment to each State in each fiscal year--
          [(A) 40 percent shall be available for the activities 
        described in subsection (a); and
          [(B) 60 percent shall be available for the activities 
        described in subsection (b).
    [(2) For any fiscal year the Secretary may waive the 
percentage requirements specified in paragraph (1) on the 
request of a State if such State demonstrates to the 
satisfaction of the Secretary--
          [(A) that the amount of funds available as a result 
        of one of such percentage requirements is not needed in 
        such fiscal year for the activities for which such 
        amount is so made available; and
          [(B) the adequacy of the alternative percentages, 
        relative to need, the State specifies the State will 
        apply with respect to all of the activities referred to 
        in paragraph (1) if such waiver is granted.
      [(d) A State may not use amounts paid to it under this 
subchapter to--
          [(1) make cash payments to intended recipient of 
        dependent care services including child care services;
          [(2) pay for construction or renovation; or
          [(3) satisfy any requirement for the expenditure of 
        non-Federal funds as a condition for the receipt of 
        Federal funds.
    [(e)(1) The Federal share of any project supported under 
this subchapter shall be not more than 75 percent.
    [(2) Not more than 10 percent of the allotment of each 
State under this subchapter may be available for the cost of 
administration.
    [(f) Project supported under this section to plan, develop, 
establish, expand, operate, or improve a State or local 
resource and referral system or before or after school child 
care program shall not duplicate any services which are 
provided before the date of the enactment of this subchapter, 
by the State or locality which will be served by such system.
    [(g) The Secretary may provide technical assistance to 
States in planning and carrying out activities under this 
subchapter.

        [application and description of activities; requirements

    [Sec. 670E. (a)(1) In order to receive an allotment under 
section 670B, each State shall submit an application to the 
Secretary. Each such application shall be in such form and 
submitted by such date as the Secretary shall require.
    [(2) Each application required under paragraph (1) for an 
allotment under section 670B shall contain assurances that the 
State will meet the requirements of subsection (b).
    [(b) As part of the annual application required by 
subsection (a), the chief executive officer of each State 
shall--
          [(1) certify that the State agrees to use the funds 
        allotted to it under section 670B in accordance with 
        the requirements of this subchapter; and
          [(2) certify that the State agrees that Federal funds 
        made available under section 670C for any period will 
        be so used as to supplement and increase the level of 
        State, local, and other non-Federal funds that would in 
        the absence of such Federal funds be made available for 
        the programs and activities for which funds are 
        provided under that section and will in no event 
        supplant such State, local, and other non-Federal 
        funds.

[The Secretary may not prescribe for a State the manner of 
compliance with the requirements of this subsection.
    [(c)(1) The chief executive officer of a State shall, as 
part of the application required by subsection (a), also 
prepare and furnish the Secretary (in accordance with such form 
as the Secretary shall provide) with a description of the 
intended use of the payments the State will receive under 
section 670C, including information on the programs and 
activities to be supported. The description shall be made 
public within the State in such manner as to facilitate comment 
from any person (including any Federal or other public agency) 
during development of the description and after its 
transmittal. The description shall be revised (consistent with 
this section) until September 30, 1991, as may be necessary to 
reflect substantial changes in the programs and activities 
assisted by the State under this subchapter, and any revision 
shall be subject to the requirements of the preceding sentence.
    [(2) The chief executive officer of each State shall 
include in such a description of--
          [(A) the number of children who participated in 
        before and after school child care programs assisted 
        under this subchapter;
          [(B) the characteristics of the children so served 
        including age levels, handicapped condition, income 
        level of families in such programs;
          [(C) the salary level and benefits paid to employees 
        in such child care programs; and
          [(D) the number of clients served in resource and 
        referral systems assisted under this subchapter, and 
        the types of assistance they requested.
    [(d) Except where inconsistent with the provisions of this 
subchapter the provisions of section 1903(b), paragraph (1) 
through (5) of section 1906(a), and sections 1906(b), 1907, 
1908, and 1909 of the Public Health Service Act shall apply to 
this subchapter in the same manner as such provisions apply to 
part A of title XIX of such Act.
    [Sec. 670F. Within three years after the date of enactment 
of this subchapter, the Secretary shall prepare and transmit to 
the Senate Committee on Labor and Human Resources and the House 
Committee on Education and Labor a report concerning the 
activities conducted by the States with amounts provided under 
this subchapter.

                              [definitions

    [Sec. 670G. For purposes of this subchapter--
          [(1) the term ``community center'' means facilities 
        operated by nonprofit community-based organizations for 
        the provision of recreational, social, or educational 
        services to the general public;
          [(2) the term ``dependent'' means--
                  [(A) an individual who has not attained the 
                age of 17 years;
                  [(B) an individual who has attained the age 
                of 55 years; or
                  [(C) an individual with a developmental 
                disability;
          [(3) the term ``developmental disability'' has the 
        same meaning as in section 102(7) of the Developmental 
        Disabilities Assistance and Bill of Rights Act;
          [(4) the term ``equipment'' has the same meaning 
        given that term by section 198(a)(8) of the Elementary 
        and Secondary Education Act of 1965;
          [(5) the term ``institution of higher education'' has 
        the same meaning given that term under section 1201(a) 
        of the Higher Education Act of 1965;
          [(6) the term ``local educational agency'' has the 
        same meaning given that term under section 198(a)(10) 
        of the Elementary and Secondary Education Act of 1965;
          [(7) the term ``school-age children'' means children 
        aged five through thirteen, except that in any State in 
        which by State law children at an earlier age are 
        provided free public education, the age provided in 
        State law shall be substituted for age five;
          [(8) the term ``school facilities'' means classrooms 
        and related facilities used for the provision of 
        education;
          [(9) the term ``Secretary'' means the Secretary of 
        Health and Human Services;
          [(10) the term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, American Samoa, the Virgin Islands, 
        the Federated States of Micronesia, the Republic of the 
        Marshall Islands, Palau, and the Commonwealth of the 
        Northern Mariana Islands; and
          [(11) the term ``State educational agency'' has the 
        meaning given that term under section 198(a)(17) of the 
        Elementary and Secondary Education Act of 1965.

                              [short title

    [Sec. 670H. This subchapter may be cited as the ``State 
Dependent Care Development Grants Act''.]
          * * * * * * *

               HUMAN SERVICES REAUTHORIZATION ACT OF 1986

 [TITLE VI--CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP ASSISTANCE PROGRAM

[SEC. 601. SHORT TITLE.

    [This title may be cited as the ``Child Development 
Associate Scholarship Assistance Act of 1985''.

[SEC. 602. GRANTS AUTHORIZED.

    [The Secretary is authorized to make a grant for any fiscal 
year to any State receiving a grant under title XX of the 
Social Security Act for such fiscal year to enable such State 
to award scholarships to eligible individuals within the State 
who are candidates for the Child Development Associate 
credential.

[SEC. 603. APPLICATIONS.

    [(a) Application Required.--A State desiring to participate 
in the grant program established by this title shall submit an 
application to the Secretary in such form as the Secretary may 
require.
    [(b) Contents of Applications.--A State's application shall 
contain appropriate assurances that--
          [(1) scholarship assistance made available with funds 
        provided under this title will be awarded--
                  [(A) only to eligible individuals;
                  [(B) on the basis of the financial need of 
                such individuals; and
                  [(C) in amounts sufficient to cover the cost 
                of application, assessment, and credentialing 
                (including, at the option of the State, any 
                training necessary for credentialing) for the 
                Child Development Associate credential for such 
                individuals;
          [(2) not more than 35 percent of the funds received 
        under this title by a State may be used to provide 
        scholarship assistance under paragraph (1) to cover the 
        cost of training described in paragraph (1)(C); and
          [(3) not more than 10 percent of the funds received 
        by the State under this title will be used for the 
        costs of administering the program established in such 
        State to award such assistance.
    [(c) Equitable Distribution.--In making grants under this 
title, the Secretary shall--
          [(1) distribute such grants equitably among States; 
        and
          [(2) ensure that the needs of rural and urban areas 
        are appropriately addressed.

[SEC. 604. DEFINITIONS.

    [For purposes of this title--
          [(1) the term ``eligible individual'' means a 
        candidate for the Child Development Associate 
        credential whose income does not exceed the 130 percent 
        of the lower living standard income level, by more than 
        50 percent;
          [(2) the term ``lower living standard income level'' 
        means that income level (adjusted for regional, 
        metropolitan, urban, and rural differences and family 
        size) determined annually by the Secretary of Labor and 
        based on the most recent lower living family budget 
        issued by the Secretary of Labor;
          [(3) the term ``Secretary'' means the Secretary of 
        Health and Human Services; and
          [(4) the term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, American Samoa, the Virgin Islands, 
        the Commonwealth of the Northern Mariana Islands, the 
        Marshall Islands, the Federated States of Micronesia, 
        and Palau.

[SEC. 605. ADMINISTRATIVE PROVISIONS.

    [(a) Reporting.--Each State receiving grants under this 
title shall annually submit to the Secretary information on the 
number of eligible individuals assisted under the grant 
program, and their positions and salaries before and after 
receiving the Child Development Associate credential.
    [(b) Payments.--Payments pursuant to grants made under this 
title may be made in installments, and in advance or by way of 
reimbursement, with necessary adjustments on account of 
overpayments or underpayments, as the Secretary may determine.

[SEC. 606. AUTHORIZATION OF APPROPRIATIONS

    [There are authorized to be appropriated to carry out this 
title such sums as may be necessary for fiscal year 1995.]