II

106TH CONGRESS

1ST SESSION S. 616

To amend the Child Care and Development Block Grant Act of 1990 and

the Higher Education Act of 1965 to establish and improve programs

to increase the availability of quality child care, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 15, 1999

Mr. WELLSTONE introduced the following bill; which was read twice and

referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To amend the Child Care and Development Block Grant

Act of 1990 and the Higher Education Act of 1965

to establish and improve programs to increase the availability of quality child care, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Child Development

5 Act’’.
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1 TITLE I—CHILD CARE AND

2 DEVELOPMENT BLOCK GRANT

3 SEC. 101. DEFINITIONS.

4 (a) AMENDMENTS.—Section 658P of the Child Care

5 and Development Block Grant Act of 1990 (42 U.S.C.

6 9858n) is amended—

7 (1) by striking paragraph (8) and inserting the

8 following:

9 ‘‘(8) LOCAL AREA.—The term ‘local area’

10 means a local area referred to in section

11 658D(d)(1).’’; and

12 (2) by adding at the end the following:

13 ‘‘(15) CHILD CARE; CHILD CARE SERVICES.—

14 The terms ‘child care’ and ‘child care services’ in15 clude out-of-school care provided under section

16 658F(a)(2), but do not include other services pro17 vided under section 658G or 658H.

18 ‘‘(16) GENERAL CHILD CARE PROVIDER.—The

19 term ‘general child care provider’ means a provider

20 that meets the licensing requirements (including ac21 creditation requirements) (if any) applicable to child

22 care services provided within the State.

23 ‘‘(17) HEAD START PROGRAM.—The term

24 ‘Head Start program’ means a program carried out

25 under the Head Start Act (42 U.S.C. 9831 et seq.).
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1 ‘‘(18) LOCAL COORDINATING BOARD.—The

2 term ‘local coordinating board’ means a local child

3 care coordinating board established under section

4 658D(d).

5 ‘‘(19) LOCAL EDUCATIONAL AGENCY; STATE

6 EDUCATIONAL AGENCY.—The terms ‘local edu7 cational agency’ and ‘State educational agency’ have

8 the meanings given the terms in section 14101 of

9 the Elementary and Secondary Education Act of

10 1965 (20 U.S.C. 8801).

11 ‘‘(20) OUT-OF-SCHOOL CARE.—The term ‘out12 of-school care’ means before- and after-school care,

13 weekend, holiday, and vacation care, and care pro14 vided on school release days.

15 ‘‘(21) STATE COORDINATING BOARD.—The

16 term ‘State coordinating board’ means a State child

17 care coordinating board established under section

18 658D(c).’’.

19 (b) REDESIGNATION.—The Child Care and Develop20 ment Block Grant Act of 1990 (42 U.S.C. 9858 et seq.)

21 is amended—

22 (1) by redesignating section 658P as section

23 658T; and

24 (2) by moving such section 658T to the end of

25 such Act.
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1 SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

2 Section 658B of the Child Care and Development

3 Block Grant Act of 1990 (42 U.S.C. 9858) is amended—

4 (1) by inserting before ‘‘There is’’ the following:

5 ‘‘(a) DIRECT CHILD CARE AND QUALITY IMPROVE6 MENT ACTIVITIES.—’’;

7 (2) by striking ‘‘this subchapter’’ and all that

8 follows and inserting ‘‘sections 658F(a)(1) and

9 658G(a), $1,000,000,000 for each of fiscal years

10 2000 through 2004.’’; and

11 (3) by adding at the end the following:

12 ‘‘(b) ADDITIONAL ACTIVITIES.—There are authorized

13 to be appropriated and there are appropriated, for each

14 of fiscal years 2000 through 2004—

15 ‘‘(1) $7,500,000,000, in addition to amounts

16 made available under subsection (a) and section 418

17 of the Social Security Act (42 U.S.C. 618), to carry

18 out section 658F(a)(1);

19 ‘‘(2) $1,000,000,000 to carry out section

20 658F(a)(2);

21 ‘‘(3) $800,000,000 to carry out section

22 658G(b);

23 ‘‘(4) $250,000,000 to carry out section

24 658G(c);

25 ‘‘(5) $200,000,000 to carry out section

26 658G(d); and
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1 ‘‘(6) $100,000,000 to carry out section 658H.’’.

2 SEC. 103. STATE CHILDREN’S BOARDS AND LOCAL COORDI3 NATING BOARDS.

4 Section 658D of the Child Care and Development

5 Block Grant Act of 1990 (42 U.S.C. 9858b) is amended—

6 (1) by striking the section heading and insert7 ing the following:

8 ‘‘SEC. 658D. STATE AND LOCAL COORDINATING BOARDS.’’;

9 (2) in subsection (a)—

10 (A) by striking ‘‘State agency’’ and insert11 ing ‘‘State entity’’; and

12 (B) by striking ‘‘to act as the lead agency’’

13 and inserting ‘‘to serve as a State coordinating

14 board’’;

15 (3) in subsection (b)—

16 (A) in paragraph (1)—

17 (i) in the matter preceding subpara18 graph (A), by striking ‘‘lead agency’’ and

19 inserting ‘‘State coordinating board’’; and

20 (ii) in subparagraph (D), by inserting

21 before the period the following: ‘‘, includ22 ing developing a plan for the coordination

23 of services provided under this subchapter

24 and services provided through such pro-
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1 grams in the State, which plan shall be de2 signed to—

3 ‘‘(i) reduce gaps and duplications in

4 the services described in the plan;

5 ‘‘(ii) promote continuity in the serv6 ices;

7 ‘‘(iii) promote the most cost-effective

8 models for the services; and

9 ‘‘(iv) direct the missions of the State

10 agencies represented in the Board to meet

11 the needs of children.’’; and

12 (B) in paragraph (2), by striking ‘‘lead

13 agency’’ and inserting ‘‘State coordinating

14 board’’;

15 (4) by adding at the end the following:

16 ‘‘(c) STATE CHILD CARE COORDINATING BOARD.—

17 ‘‘(1) IN GENERAL.—Each Governor of a State

18 that carries out an activity funded under this sub19 chapter shall establish the State child care coordi20 nating board referred to in subsection (a).

21 ‘‘(2) COMPOSITION.—The board shall include a

22 representative of—

23 ‘‘(A) the State educational agency;

24 ‘‘(B) the State health department or com25 parable agency;
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1 ‘‘(C) the State agency with primary re2 sponsibility for human services, as determined

3 by the Governor of the State; and

4 ‘‘(D) any State agencies with primary re5 sponsibility for child care (including out-of6 school care) programs, pre-kindergarten edu7 cation programs, Head Start programs, and

8 other early education services, as determined by

9 the Governor of the State.

10 ‘‘(d) LOCAL COORDINATING BOARD.—

11 ‘‘(1) IN GENERAL.—Each chief executive officer

12 of a unit of general purpose local government that

13 receives assistance under this subchapter shall estab14 lish a local child care coordinating board for the

15 local area served by the local government.

16 ‘‘(2) COMPOSITION.—Except as provided in

17 paragraph (3), the local coordinating board shall in18 clude representatives in the local area of—

19 ‘‘(A) entities carrying out early child care

20 and early education programs, including rep21 resentatives of family child care providers and

22 center-based child care providers;

23 ‘‘(B) entities carrying out child care re24 source and referral programs;
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1 ‘‘(C) entities carrying out Head Start pro2 grams;

3 ‘‘(D) entities carrying out pre-kindergarten

4 education programs;

5 ‘‘(E) the health department or comparable

6 agency for the local area;

7 ‘‘(F) the agency with primary responsi8 bility for human services for the local area, as

9 determined by the chief executive officer;

10 ‘‘(G) the agency with primary responsi11 bility for child welfare for the local area, as de12 termined by the chief executive officer;

13 ‘‘(H) entities carrying out child care pro14 grams for children within the compulsory school

15 attendance age range for the State involved;

16 ‘‘(I) the local educational agency;

17 ‘‘(J) the agencies with primary responsi18 bility for economic development, and employ19 ment and training services, for the local area,

20 as determined by the chief executive officer; and

21 ‘‘(K) parents.

22 ‘‘(3) ORGANIZATIONS.—In establishing a local

23 coordinating board, the chief executive officer may

24 designate a nonpartisan organization such as an en-
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1 tity described in paragraph (2)(B) to serve as the

2 board.

3 ‘‘(4) DUTIES.—The local coordinating board for

4 a local area shall carry out the duties specified for

5 the board under this subchapter and shall oversee

6 the administration of activities carried out in the

7 local area under sections 658F(a)(2) and 658G(c)

8 with funds made available to carry out this sub9 chapter.

10 ‘‘(5) SERVICES FOR LOCAL COORDINATING

11 BOARD.—The chief executive officer shall enter into

12 an agreement with an entity described in paragraph

13 (2)(B) or (if no such entity exists in the local area)

14 with a local agency to provide to the local coordi15 nating board, in appropriate cases, services that con16 sist of data collection, community needs assessment,

17 planning, research, and coordination services.’’.

18 SEC. 104. STATE PLAN REQUIREMENTS.

19 (a) IN GENERAL.—Section 658E(c) of the Child Care

20 and Development Block Grant Act of 1990 (42 U.S.C.

21 9858c(c)) is amended—

22 (1) in paragraph (1), by striking ‘‘lead agency

23 designated’’ and inserting ‘‘State coordinating board

24 established’’;

25 (2) in paragraph (2)(A)—
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1 (A) in clause (i)(II), by striking ‘‘section

2 658P(2)’’ and inserting ‘‘section 658T(2)’’; and

3 (B) in clause (ii), by striking ‘‘eligible pro4 vider’’ and inserting ‘‘eligible child care pro5 vider (or, in the case of out-of-school care de6 scribed in section 658F(a)(2), an entity that re7 ceives a grant under section 658F(a)(2)(B))’’;

8 (3) in paragraph (3)—

9 (A) in subparagraph (A), by striking

10 ‘‘(D)’’ and inserting ‘‘(E)’’;

11 (B) in subparagraph (B), by inserting be12 fore ‘‘, and any other activity’’ the following:

13 ‘‘(including activities described in subsections

14 (a) through (d) of section 658G), activities de15 scribed in section 658H’’;

16 (C) in subparagraph (C), in the first sen17 tence, by inserting before the period the fol18 lowing: ‘‘, including conducting rate and wage

19 surveys and submitting reports under section

20 658K(c)’’;

21 (D) in subparagraph (D), by striking

22 ‘‘under this subchapter’’ and inserting ‘‘under

23 section 658F(a)’’; and

24 (E) by adding at the end the following:
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1 ‘‘(E) ALLOCATION OF FUNDS BY ACTIV2 ITY.—The State plan shall provide that the

3 State will use each of the 5 State allotments

4 made under section 658O(b) for the activities

5 for which the allotment is made.’’;

6 (4) in paragraph (4)—

7 (A) by redesignating subparagraph (B) as

8 subparagraph (E); and

9 (B) by inserting after subparagraph (A)

10 the following:

11 ‘‘(B) LIMIT.—The State plan shall specify

12 that the payment rates for the provision of the

13 child care services shall be established in a

14 manner that provides for the payment of the

15 market rate for such services, except as pro16 vided in subparagraph (C).

17 ‘‘(C) HIGHER RATES FOR CERTAIN TYPES

18 OF CARE.—The State plan may provide that the

19 payment may be higher for—

20 ‘‘(i) child care services for children

21 with disabilities, or infants and toddlers

22 with disabilities, as such terms are defined

23 in section 602 of the Individuals with Dis24 abilities Education Act (20 U.S.C. 1401)

25 or for children within age ranges specified
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1 by the State if the State determines that

2 higher payments are justified for the care

3 of such children;

4 ‘‘(ii) comprehensive child care serv5 ices, as determined by the State;

6 ‘‘(iii) care by types of providers speci7 fied by the State if the State determines

8 that higher payments are justified for care

9 by such providers; and

10 ‘‘(iv) care provided through accredited

11 child care programs, as determined by the

12 State.

13 ‘‘(D) FEDERAL AND NON-FEDERAL

14 SHARES.—

15 ‘‘(i) IN GENERAL.—The State plan

16 shall provide that the funds made available

17 to the State from amounts appropriated

18 under section 658B(b) shall be used to pay

19 for the Federal share of the cost of car20 rying out the appropriate activities de21 scribed in the provisions referred to in sec22 tion 658B(b).

23 ‘‘(ii) FEDERAL SHARE.—The Federal

24 share of the cost is 80 percent.
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1 ‘‘(iii) NON-FEDERAL SHARE.—The

2 non-Federal share of the cost may be in

3 cash or in kind, fairly evaluated, including

4 plant, equipment, or services.’’; and

5 (5) by adding at the end the following:

6 ‘‘(6) REPORT, PLAN, AND PROPOSAL FOR CHILD

7 CARE CAPITAL FINANCING PROGRAM.—The State

8 plan shall include—

9 ‘‘(A) a report described in section

10 658H(c)(2), based on a study described in sec11 tion 658H(c)(1);

12 ‘‘(B) a plan with clear measurable goals

13 for addressing the differences and deficiencies

14 described in the report, including addressing

15 the differences and deficiencies through a child

16 care capital financing program carried out

17 under section 658H(b); and

18 ‘‘(C) a proposal for monitoring the impact

19 and effectiveness of the implementation of the

20 plan described in subparagraph (B) under sec21 tion 658H.’’.

22 (b) REDESIGNATION AND CONFORMING AMEND23 MENTS.—Section 658F of the Child Care and Develop24 ment Block Grant Act of 1990 (42 U.S.C. 9858d) is

25 amended—
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1 (1) in subsection (b)—

2 (A) in paragraph (1), by striking ‘‘section

3 658O(c)(6)’’ and inserting ‘‘sections 658H and

4 658O(c)(6)’’; and

5 (B) in paragraph (2), by inserting before

6 ‘‘except’’ the following: ‘‘except as provided in

7 section 658H and’’;

8 (2) by redesignating subsections (a) and (b) as

9 subsections (c) and (d);

10 (3) by moving such subsections to the end of

11 section 658M; and

12 (4) by striking the section heading.

13 SEC. 105. SCHOOL-AGE CHILD CARE AND OTHER CHILD

14 CARE PROGRAMS.

15 The Child Care and Development Block Grant Act

16 of 1990 (42 U.S.C. 9858 et seq.) is amended by inserting

17 after section 658E the following:

18 ‘‘SEC. 658F. SCHOOL-AGE CHILD CARE AND OTHER CHILD

19 CARE PROGRAMS.

20 ‘‘(a) CHILD CARE PROGRAMS.—

21 ‘‘(1) GENERAL CHILD CARE PROGRAMS.—A

22 State that receives an allotment for a fiscal year in

23 accordance with section 658O(f)(1) shall use the

24 funds made available through the allotment (less any
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1 amounts needed to carry out section 658G(a)) for

2 child care services on a sliding fee scale basis.

3 ‘‘(2) OUT-OF-SCHOOL CARE PROGRAMS.—

4 ‘‘(A) STATE GRANTS.—

5 ‘‘(i) IN GENERAL.—A State that re6 ceives an allotment for a fiscal year in ac7 cordance with section 658O(f)(2) shall use

8 the funds made available through the allot9 ment to make grants to local coordinating

10 boards for out-of-school care programs.

11 ‘‘(ii) APPLICATION.—To be eligible to

12 receive a grant from a State under clause

13 (i), a local coordinating board shall submit

14 to the State an application at such time, in

15 such manner, and containing such infor16 mation as the State may require. At a

17 minimum, the application shall include an

18 assurance that the board has issued a re19 quest for proposals to carry out the pro20 grams, and shall include a plan for con21 ducting the programs, based on the pro22 posals received.

23 ‘‘(B) LOCAL GRANTS.—

24 ‘‘(i) IN GENERAL.—A local coordi25 nating board that receives funds under
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1 subparagraph (A) shall use the funds to

2 make grants to appropriate entities to es3 tablish, develop, and carry out out-of4 school care programs.

5 ‘‘(ii) PROPOSAL.—To be eligible to re6 ceive a grant from a local coordinating

7 board under clause (i), an entity shall sub8 mit to the board a proposal at such time,

9 in such manner, and containing such infor10 mation as the board may require.

11 ‘‘(iii) SELECTION.—In selecting an

12 entity to receive a grant under clause (i),

13 a local coordinating board shall evaluate

14 the qualifications of the entities submitting

15 proposals on the basis of the quality indi16 cators used for accreditation by a national

17 accreditation association concerned with

18 school-age child care.

19 ‘‘(iv) USE OF FUNDS.—An entity that

20 receives a grant under clause (i) shall use

21 the funds made available through the

22 grant to provide out-of-school care pro23 grams for children (including children with

24 disabilities, as defined in section 602 of the

25 Individuals with Disabilities Education Act
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1 (20 U.S.C. 1401)) who are not more than

2 age 18 and who meet the requirements of

3 subparagraphs (B) and (C) of section

4 658T(4).

5 ‘‘(v) SERVICES.—In providing an out6 of-school care program under this subpara7 graph, an entity may use the funds de8 scribed in clause (iv) to provide services for

9 children described in clause (iv), that con10 sist of—

11 ‘‘(I) recreational activities;

12 ‘‘(II) community-based service

13 programs that provide for meaningful

14 human, educational, environmental, or

15 public safety service;

16 ‘‘(III) academic assistance and

17 tutoring;

18 ‘‘(IV) mentoring;

19 ‘‘(V) conflict management;

20 ‘‘(VI) health and nutrition serv21 ices or disease and injury prevention

22 services;

23 ‘‘(VII) literacy services;
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1 ‘‘(VIII) child care (other than

2 another service described in this

3 clause);

4 ‘‘(IX) transportation of the chil5 dren described in clause (iv)

6 between—

7 ‘‘(aa) school or home; and

8 ‘‘(bb) the facility in which

9 the services are provided; and

10 ‘‘(X) such other activities as the

11 local coordinating board may deter12 mine to be appropriate.

13 ‘‘(b) DEFINITION.—For purposes of this subchapter,

14 the term ‘eligible child’, used with respect to child care

15 provided under subsection (a)(2), includes a child de16 scribed in subsection (a)(2)(B)(iv).’’.

17 SEC. 106. CHILD CARE QUALITY IMPROVEMENT ACTIVI18 TIES.

19 Section 658G of the Child Care and Development

20 Block Grant Act of 1990 (42 U.S.C. 9858e) is amended

21 to read as follows:

22 ‘‘SEC. 658G. CHILD CARE QUALITY IMPROVEMENT ACTIVI23 TIES.

24 ‘‘(a) GENERAL QUALITY IMPROVEMENT ACTIVI25 TIES.—A State that receives an allotment for a fiscal year
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1 in accordance with section 658O(f)(1) shall use not less

2 than 4 percent of the funds made available through such

3 allotment for activities that are designed to provide com4 prehensive consumer education to parents and the public,

5 activities that increase parental choice, and activities de6 signed to improve the quality and availability of child care

7 (such as resource and referral services).

8 ‘‘(b) AVAILABILITY OF QUALITY CHILD CARE SERV9 ICES.—

10 ‘‘(1) IN GENERAL.—A State that receives an al11 lotment for a fiscal year in accordance with section

12 658O(f)(3) shall use the funds made available

13 through the allotment for activities described in

14 paragraph (2) designed to improve the availability of

15 quality child care services.

16 ‘‘(2) ACTIVITIES.—The State may use the

17 funds for—

18 ‘‘(A) assisting general child care providers

19 in the State in bringing provider-child ratios up

20 to standards recommended by nationally recog21 nized child care accrediting bodies;

22 ‘‘(B) improving the enforcement of licens23 ing requirements, including through the use of

24 unannounced inspection of general child care

25 providers;
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1 ‘‘(C) conducting background checks on

2 general child care providers;

3 ‘‘(D) improving the compensation of gen4 eral child care providers;

5 ‘‘(E) assisting general child care providers

6 in becoming licensed (including becoming ac7 credited);

8 ‘‘(F) expanding activities to educate par9 ents on the availability and quality of child

10 care, including the development and operation

11 of resource and referral systems;

12 ‘‘(G) creating support networks for family

13 child care providers;

14 ‘‘(H) establishing linkages between child

15 care services and health care services;

16 ‘‘(I) offering training and education to

17 general child care providers, including offering

18 scholarships to assist with the expenses of ob19 taining such training and education; and

20 ‘‘(J) providing parent education and family

21 support programs.

22 ‘‘(3) ADMINISTRATION.—The State may carry

23 out the activities described in this subsection directly

24 or by grant or contract.
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1 ‘‘(c) CHALLENGE GRANTS TO INCREASE THE AVAIL2 ABILITY AND QUALITY OF CHILD CARE.—

3 ‘‘(1) ESTABLISHMENT.—The Secretary shall es4 tablish a program to award challenge grants to local

5 coordinating boards that demonstrate to the Sec6 retary that the boards can successfully generate the

7 matching funds from the private sector required

8 under paragraph (3) for the purpose of expanding

9 the availability of, and improving the quality of,

10 child care throughout the local areas served by the

11 boards.

12 ‘‘(2) APPLICATION.—To be eligible to receive a

13 grant under this subsection, a local coordinating

14 board shall prepare and submit to the Secretary an

15 application at such time and in such manner as the

16 Secretary may require, and that includes—

17 ‘‘(A) an assurance that the private sector

18 matching funds required under paragraph (3)

19 will be provided;

20 ‘‘(B) evidence of collaboration with par21 ents, schools, employers, child care agencies,

22 and other State and local government agencies

23 in the preparation of the application;

24 ‘‘(C) an assessment of child care resources

25 and needs within the local area; and
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1 ‘‘(D) any additional information that the

2 Secretary may require.

3 ‘‘(3) MATCHING REQUIREMENT.—To be eligible

4 to receive a grant under this subsection a local co5 ordinating board shall provide assurances to the Sec6 retary that the local area will provide $1 for every

7 $2 provided under the grant, from private sector

8 sources.

9 ‘‘(4) USE OF FUNDS.—A local coordinating

10 board shall use the matching funds provided under

11 a grant awarded under this subsection only for the

12 purpose described in paragraph (1).

13 ‘‘(5) ADMINISTRATION.—A local coordinating

14 board awarded a grant under this subsection may

15 authorize a public or nonprofit entity within the

16 local area to act as the fiscal agent for the adminis17 tration of the program funded under the grant.

18 ‘‘(d) PROFESSIONAL DEVELOPMENT ACTIVITIES AND

19 COMPENSATION.—

20 ‘‘(1) STATE USE OF FUNDS.—A State that re21 ceives an allotment for a fiscal year in accordance

22 with section 658O(f)(4) shall use the funds made

23 available through the allotment to provide, directly

24 or by grant or contract with an appropriate entity,

25 the professional development activities and com-
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1 pensation described in paragraph (2), in order to im2 prove the availability of quality child care services.

3 ‘‘(2) ACTIVITIES.—The State may use the

4 funds to—

5 ‘‘(A) provide training or classes related to

6 early childhood development for general child

7 care providers;

8 ‘‘(B) provide increased compensation for

9 general child care providers who have completed

10 training or coursework in classes described in

11 subparagraph (A), or additional early childhood

12 development training, that meets such require13 ments as the State may specify; and

14 ‘‘(C) provide mentoring and apprenticeship

15 programs for general child care providers.’’.

16 SEC. 107. CHILD CARE CAPITAL FINANCING PROGRAM.

17 The Child Care and Development Block Grant Act

18 of 1990 (42 U.S.C. 9858 et seq.) is amended by inserting

19 after section 658G the following:

20 ‘‘SEC. 658H. CHILD CARE CAPITAL FINANCING PROGRAM.

21 ‘‘(a) IN GENERAL.—A State that receives an allot22 ment for a fiscal year in accordance with section

23 658O(f)(5) shall use the funds made available through the

24 allotment for the establishment and implementation of a

25 child care capital financing program described in sub-
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1 section (b) and for related activities described in sub2 section (c).

3 ‘‘(b) CHILD CARE CAPITAL FINANCING PROGRAM.—

4 ‘‘(1) IN GENERAL.—Each State described in

5 subsection (a) shall establish a child care capital fi6 nancing program, through which the State shall fi7 nance child care capital projects described in para8 graph (4), consistent with the plan and proposal ap9 proved in the State plan under section 658E(c)(6).

10 ‘‘(2) CAPITAL FINANCING MECHANISMS.—In

11 carrying out the program, the State may use the

12 funds made available through the allotment referred

13 to in subsection (a) to provide capital financing for

14 the child care capital projects by—

15 ‘‘(A) making grants to the entities de16 scribed in paragraph (3);

17 ‘‘(B) making direct loans to the entities;

18 ‘‘(C) making guarantees for loans assumed

19 by the entities, or purchasing letters of credit

20 from the lenders for such loans;

21 ‘‘(D) entering into contracts to make an22 nual interest and principal payments on behalf

23 of the entities for such loans;

24 ‘‘(E) subsidizing interest payments on be25 half of the entities for such loans;
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1 ‘‘(F) capitalizing, or assisting in the cap2 italization of, a child care capital investment

3 fund, which shall be available to provide the fi4 nancial assistance described in subparagraphs

5 (A) through (E) for the entities; and

6 ‘‘(G) funding a reserve to enhance the abil7 ity of the State to issue a revenue bond (includ8 ing obtaining more favorable underwriting

9 terms for the bond) designed to provide the fi10 nancial assistance for the entities.

11 ‘‘(3) ELIGIBLE ENTITIES.—

12 ‘‘(A) IN GENERAL.—Entities eligible to re13 ceive assistance through capital financing pro14 vided under this subsection for facilities shall

15 be—

16 ‘‘(i) general child care providers who

17 own the facilities, or lease the facilities as

18 described in subparagraph (B)(ii); or

19 ‘‘(ii) qualified private entities devel20 oping child care facilities under agreements

21 with general child care providers described

22 in clause (i), in any State in which the

23 Secretary determines that State law gov24 erns such agreements, prohibits fraudulent

25 and other inappropriate transactions, and
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1 is sufficient to protect the financial inter2 ests of the Federal Government and the

3 State.

4 ‘‘(B) APPLICATION.—To be eligible to re5 ceive assistance through capital financing pro6 vided under this subsection, an entity shall sub7 mit an application to the State at such time, in

8 such manner, and containing such information

9 as the State may require. At a minimum, the

10 application shall contain—

11 ‘‘(i) the agreement described in para12 graph (4)(E); and

13 ‘‘(ii) if the general child care provider

14 leases the facility at which the child care

15 capital project will occur—

16 ‘‘(I) a copy of a signed and en17 forceable lease providing that the pro18 vider may provide child care at the fa19 cility for not less than 5 years after

20 the completion of the project; and

21 ‘‘(II) an agreement by the owner

22 of the facility and the general child

23 care provider that the owner and pro24 vider will deliver to the State an exe-
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1 cuted assignment of the lease to the

2 State.

3 ‘‘(4) CHILD CARE CAPITAL PROJECTS.—An en4 tity that receives assistance under this subsection

5 through capital financing described in paragraph (2)

6 shall use the assistance—

7 ‘‘(A) for a project, carried out in accord8 ance with the plan and proposal described in

9 section 658E(c)(6), that involves the construc10 tion, renovation, or repair of a child care facil11 ity, or the acquisition or repair of equipment

12 for such a facility;

13 ‘‘(B) for a facility through which a center14 based child care provider, a group home child

15 care provider, or a family child care provider

16 provides child care services;

17 ‘‘(C) for a facility through which a

18 provider—

19 ‘‘(i) provides full-time year-round pre20 school child care;

21 ‘‘(ii) carries out a Head Start pro22 gram;

23 ‘‘(iii) carries out a child care program,

24 for children within the compulsory school

25 attendance age range for the State, that
28

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1 the State determines meets the needs of

2 working parents; or

3 ‘‘(iv) provides a specialized child care

4 program, such as a program to provide

5 evening and weekend child care, that the

6 State determines meets the needs of work7 ing parents;

8 ‘‘(D) for a facility in which not less than

9 30 percent of the children receiving child care

10 are children whose family income does not ex11 ceed 100 percent of the State median family in12 come (for a family of the size involved); and

13 ‘‘(E) only after entering into an agreement

14 with the State specifying that—

15 ‘‘(i) the facility will be used to provide

16 child care for eligible children, in accord17 ance with subparagraphs (B), (C), and

18 (D), for at least 5 years after the comple19 tion of the project; and

20 ‘‘(ii) if the facility is not used as de21 scribed in clause (i) for the 5-year period,

22 the owner of the facility shall reimburse

23 the State in an amount equal to the prod24 uct of—

25 ‘‘(I) the cost of the project;
29

•S 616 IS

1 ‘‘(II) 20 percent; and

2 ‘‘(III) the number of years in the

3 5-year period in which the facility is

4 not used as described in clause (i).

5 ‘‘(5) ARRANGEMENTS.—The State may provide

6 the capital financing described in paragraph (2) di7 rectly, or may make grants or enter into contracts

8 with public agencies and other appropriate entities

9 to provide the financing.

10 ‘‘(6) TECHNICAL ASSISTANCE.—The State shall

11 provide technical assistance to entities carrying out

12 child care capital projects under this subsection.

13 ‘‘(c) PLANNING PROCESS.—

14 ‘‘(1) STUDY.—Each State described in sub15 section (a) shall, prior to the submission of the State

16 plan described in section 658E, study the demand

17 for and supply of child care throughout the State. In

18 conducting the study, the State shall collect informa19 tion on the demand and supply and, in particular,

20 on—

21 ‘‘(A) the demand and supply in census

22 tracts in which the median family income does

23 not exceed 100 percent of the State median

24 family income (for a family of the size in25 volved); and
30

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1 ‘‘(B) the quality (including the physical

2 condition) of child care facilities in the State.

3 ‘‘(2) REPORT.—The State shall prepare and

4 submit to the Secretary in the State plan a report

5 based on the results of the study and such other in6 formation relating to the demand for and supply of

7 child care in the State as the State may determine

8 to be appropriate. The report shall contain an anal9 ysis of—

10 ‘‘(A) any differences between the demand

11 and supply; and

12 ‘‘(B) any deficiencies in the quantity and

13 quality of the child care.

14 ‘‘(d) CHILD CARE FEDERAL GUARANTEE PRO15 GRAM.—

16 ‘‘(1) GUARANTEES.—

17 ‘‘(A) IN GENERAL.—The Secretary may,

18 on such terms and conditions as the Secretary

19 may prescribe, guarantee notes and other obli20 gations issued by States for the purposes of as21 sisting entities described in subsection (b)(3)(A)

22 in obtaining financing for projects described in

23 subsection (b)(4)(A).

24 ‘‘(B) FULL FAITH AND CREDIT.—The full

25 faith and credit of the United States is pledged
31

•S 616 IS

1 to the payment of each guarantee made under

2 this subsection for an obligation. The guarantee

3 shall be conclusive evidence of the eligibility of

4 the obligation for the guarantee with respect to

5 principal and interest. The validity of the guar6 antee shall be incontestable in the hands of a

7 holder of the obligation.

8 ‘‘(2) CONDITIONS ON OBLIGATIONS AND FI9 NANCING.—A guarantee under this subsection may

10 be used to assist an entity in obtaining financing

11 only if the entity has made efforts to obtain the fi12 nancing without the guarantee and cannot complete

13 the financing in a manner that allows the timely exe14 cution of the project plans without the guarantee.

15 Obligations guaranteed under this subsection shall

16 be in such form and denominations, have such matu17 rities, and be subject to such conditions as the Sec18 retary may prescribe in regulations. The Secretary

19 may not deny a guarantee under this subsection on

20 the basis of the proposed repayment period for the

21 obligation, unless the period is more than 20 years

22 or the Secretary determines that the period causes

23 the guarantee to constitute an unacceptable financial

24 risk.
32

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1 ‘‘(3) MAXIMUM GUARANTEE FOR A STATE.—

2 The Secretary may not guarantee an obligation for

3 a State under this subsection during a fiscal year if,

4 as a result, the total amount of the outstanding obli5 gations guaranteed for the State under this sub6 section would exceed 5 times the amount of the al7 lotments of the State under this subchapter for the

8 fiscal year.

9 ‘‘(4) REPAYMENT CONTRACT; PLEDGE; SECU10 RITY.—To assure the repayment of obligations and

11 charges incurred under this subsection, in order for

12 a State to receive a guarantee for an obligation

13 under this subsection the State shall—

14 ‘‘(A) enter into a contract, in a form ac15 ceptable to the Secretary, for repayment of the

16 obligation;

17 ‘‘(B) pledge any allotment for which the

18 State may become eligible under this sub19 chapter for the fiscal year during which the ob20 ligation is guaranteed, and the 4 succeeding fis21 cal years; and

22 ‘‘(C) furnish, at the request of the Sec23 retary, such other security as the Secretary may

24 determine to be appropriate in making such

25 guarantees.
33

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1 ‘‘(5) PLEDGED ALLOTMENTS FOR REPAY2 MENTS.—Notwithstanding any other provision of

3 this subchapter, the Secretary may apply allotments

4 pledged under paragraph (4)(B) to any repayment

5 due to the United States as a result of a guarantee

6 made under this subsection.

7 ‘‘(6) PAYMENT OF PRINCIPAL, INTEREST, AND

8 COSTS.—Notwithstanding any other provision of this

9 subchapter, a State may use an allotment received

10 under this subchapter (including program income

11 derived from the allotment) to pay for principal and

12 interest due (including such servicing, underwriting,

13 and other costs as the Secretary may specify in reg14 ulations) on an obligation guaranteed under this

15 subsection.

16 ‘‘(7) ISSUANCE OF OBLIGATIONS TO SECRETARY

17 OF THE TREASURY.—

18 ‘‘(A) ISSUANCE.—The Secretary may issue

19 obligations to the Secretary of the Treasury in

20 an amount outstanding at any one time suffi21 cient to enable the Secretary to carry out the

22 obligations of the Secretary under guarantees

23 authorized by this subsection. The obligations

24 issued under this paragraph shall have such

25 maturities and bear such rates of interest as
34

•S 616 IS

1 the Secretary of the Treasury shall determine

2 to be appropriate.

3 ‘‘(B) PURCHASE.—The Secretary of the

4 Treasury shall purchase any obligations of the

5 Secretary issued under this paragraph. For the

6 purposes of making such a purchase, the Sec7 retary of the Treasury may use as a public debt

8 transaction the proceeds from the sale of any

9 security issued under chapter 31 of title 31,

10 United States Code. The purposes for which

11 such a security may be issued under such chap12 ter are extended to include the purchases of the

13 obligations issued under this paragraph.

14 ‘‘(8) PURCHASE OF GUARANTEED OBLIGATIONS

15 BY FEDERAL FINANCING BANK.—An obligation

16 guaranteed under this subsection may not be pur17 chased by the Federal Financing Bank.

18 ‘‘(9) FEDERAL TAXATION OF GUARANTEED OB19 LIGATIONS.—The interest paid on an obligation

20 guaranteed under this subsection shall be included

21 in gross income for the purpose of chapter 1 of the

22 Internal Revenue Code of 1986.

23 ‘‘(10) MAXIMUM TOTAL AMOUNT OF GUARAN24 TEES.—
35

•S 616 IS

1 ‘‘(A) FISCAL YEARS.—To the extent pro2 vided in appropriations Acts and permitted

3 under this subsection, and notwithstanding any

4 other provision of law, the Secretary may guar5 antee obligations under this subsection with an

6 aggregate principal amount of $500,000,000

7 for fiscal year 2000 and $500,000,000 for each

8 subsequent fiscal year.

9 ‘‘(B) OUTSTANDING OBLIGATIONS.—The

10 aggregate principal amount of outstanding obli11 gations guaranteed on a cumulative basis by the

12 Secretary under this subsection shall not exceed

13 $2,500,000,000.

14 ‘‘(C) MONITORING.—The Secretary shall

15 monitor the use of guarantees under this sub16 section by States. If the Secretary determines

17 that 50 percent of the aggregate guarantee au18 thority described in subparagraph (B) has been

19 committed, the Secretary may impose limita20 tions on the amount of guarantees any State

21 may receive in any fiscal year, or request the

22 enactment of legislation increasing the limit on

23 the authority.

24 ‘‘(11) LIMITATION ON IMPOSITION OF FEE OR

25 CHARGE.—No fee or charge may be imposed by the
36

•S 616 IS

1 Secretary or any other head of a Federal agency on

2 or with respect to a guarantee made by the Sec3 retary under this subsection.

4 ‘‘(e) INTERAGENCY AGREEMENTS.—The Secretary

5 may carry out the responsibilities of the Secretary under

6 this section directly or by entering into an interagency

7 agreement with the head of another Federal agency to

8 carry out such responsibilities.’’.

9 SEC. 108. ADMINISTRATION AND ENFORCEMENT.

10 Section 658I(b)(2)(A) of the Child Care and Develop11 ment Block Grant Act of 1990 (42 U.S.C.

12 9858g(b)(2)(A)) is amended, in the matter following

13 clause (ii), by striking ‘‘the State allotment’’ and inserting

14 ‘‘the appropriate State allotment’’.

15 SEC. 109. PAYMENTS.

16 Section 658J of the Child Care and Development

17 Block Grant Act of 1990 (42 U.S.C. 9858h) is amended—

18 (1) in subsection (a), by striking ‘‘its allot19 ment’’ and inserting ‘‘each allotment of the State’’;

20 and

21 (2) in subsection (c), by striking ‘‘the allot22 ment’’ and inserting ‘‘an allotment’’.

23 SEC. 110. SURVEYS.

24 Section 658K of the Child Care and Development

25 Block Grant Act of 1990 (42 U.S.C. 9858i) is amended—
37

•S 616 IS

1 (1) in subsection (a)(2)(A), by striking ‘‘section

2 658P(5)’’ and inserting ‘‘section 658T(5)’’; and

3 (2) by adding at the end the following:

4 ‘‘(c) SURVEYS.—A State that receives allotments to

5 carry out this subchapter shall conduct periodic surveys

6 to collect wage and rate information referred to in section

7 658E(c)(3)(C) and shall periodically submit to the Sec8 retary reports containing the results of the surveys.’’.

9 SEC. 111. ALLOTMENTS.

10 (a) PAYMENTS FOR THE BENEFIT OF INDIAN CHIL11 DREN.—Section 658O(c) of the Child Care and Develop12 ment Block Grant Act of 1990 (42 U.S.C. 9858m(c)) is

13 amended—

14 (1) in paragraph (2)(A), by striking ‘‘lead agen15 cy’’ and inserting ‘‘State coordinating board’’;

16 (2) in paragraph (3)—

17 (A) by striking ‘‘child care services pro18 vided’’ and inserting ‘‘services provided’’; and

19 (B) by striking ‘‘child care services;’’ and

20 inserting ‘‘services described in this sub21 chapter;’’; and

22 (3) in paragraph (6), by inserting ‘‘(other than

23 the amounts provided to carry out section 658H)’’

24 after ‘‘this subsection’’ each place it appears.
38

•S 616 IS

1 (b) ALLOTMENTS.—Section 658O of the Child Care

2 and Development Block Grant Act of 1990 (42 U.S.C.

3 9858m) is amended—

4 (1) by redesignating subsection (f) as sub5 section (g);

6 (2) by inserting before subsection (g) the fol7 lowing:

8 ‘‘(f) RELATIONSHIP BETWEEN APPROPRIATED

9 FUNDS, RESERVATIONS, AND ALLOTMENTS.—The Sec10 retary shall make 5 sets of reservations described in para11 graphs (1) and (2) of subsection (a), and of allotments

12 described in subsection (b). The Secretary shall make the

13 reservations and allotments—

14 ‘‘(1) to carry out activities under sections

15 658F(a)(1) and 658G(a), from the amount appro16 priated under subsections (a) and (b)(1) of section

17 658B;

18 ‘‘(2) to carry out activities under section

19 658F(a)(2), from the amount appropriated under

20 section 658B(b)(2);

21 ‘‘(3) to carry out activities under section

22 658G(b), from the amount appropriated under sec23 tion 658B(b)(3);
39

•S 616 IS

1 ‘‘(4) to carry out activities under section

2 658G(d), from the amount appropriated under sec3 tion 658B(b)(5); and

4 ‘‘(5) to carry out activities under section 658H,

5 from the amount appropriated under section

6 658B(b)(6).’’; and

7 (3) in subsection (g) (as redesignated in para8 graph (1)), by striking ‘‘DEFINITION.—’’ and all

9 that follows through ‘‘the term’’ and inserting the

10 following: ‘‘DEFINITIONS.—In this section:

11 ‘‘(1) APPROPRIATED AMOUNT.—The term ‘ap12 propriated amount’ means, with respect to a set of

13 activities described in a paragraph of subsection (f),

14 the amount described in that paragraph.

15 ‘‘(2) STATE.—The term’’.

16 (c) CONFORMING AMENDMENTS.—Section 658O (42

17 U.S.C. 9858m) is amended—

18 (1) in subsection (a)—

19 (A) in paragraph (1), by striking ‘‘the

20 amount appropriated under this subchapter’’

21 and inserting ‘‘the appropriated amount’’; and

22 (B) in paragraph (2), by striking ‘‘the

23 amount appropriated under section 658B’’ and

24 inserting ‘‘the appropriated amount’’;
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•S 616 IS

1 (2) in subsection (b)(1), by striking ‘‘the

2 amounts appropriated under section 658B’’ and in3 serting ‘‘the appropriated amount’’; and

4 (3) in subsection (e)—

5 (A) in paragraph (1)—

6 (i) by striking ‘‘the allotment under’’

7 and inserting ‘‘an allotment for an activity

8 made under’’; and

9 (ii) by striking ‘‘the original allot10 ments’’ and inserting ‘‘the original allot11 ments for the activity’’;

12 (B) in paragraph (2)—

13 (i) in subparagraph (A), by striking

14 ‘‘carry out a State plan’’ and inserting

15 ‘‘carry out the activity involved under a

16 State plan’’; and

17 (ii) in subparagraph (B), by inserting

18 ‘‘for the activity’’ before the period; and

19 (C) in paragraph (3)—

20 (i) by inserting ‘‘for an activity’’ be21 fore ‘‘shall be’’; and

22 (ii) by inserting ‘‘for the activity’’ be23 fore the period.
41

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1 TITLE II—SUPPORTING FAMILY

2 CHOICES IN CHILD CARE

3 SEC. 201. EXPANDING THE DEPENDENT CARE TAX CREDIT.

4 (a) PERCENTAGE OF EMPLOYMENT-RELATED EX5 PENSES DETERMINED BY TAXPAYER STATUS.—Section

6 21(a)(2) of the Internal Revenue Code of 1986 (defining

7 applicable percentage) is amended to read as follows:

8 ‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For

9 purposes of paragraph (1), the term ‘applicable per10 centage’ means—

11 ‘‘(A) except as provided in subparagraph

12 (B), 50 percent reduced (but not below 20 per13 cent) by 1 percentage point for each $1,000, or

14 fraction thereof, by which the taxpayers’s ad15 justed gross income for the taxable year exceeds

16 $30,000, and

17 ‘‘(B) in the case of employment-related ex18 penses described in subsection (e)(11), 50 per19 cent reduced (but not below zero) by 1 percent20 age point for each $800, or fraction thereof, by

21 which the taxpayers’s adjusted gross income for

22 the taxable year exceeds $30,000.’’.

23 (b) INFLATION ADJUSTMENT FOR ALLOWABLE EX24 PENSES.—Section 21(c) of the Internal Revenue Code of

25 1986 (relating to dollar limit on amount creditable) is
42

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1 amended by striking ‘‘The amount determined’’ and in2 serting ‘‘In the case of any taxable year beginning after

3 1999, each dollar amount referred to in paragraphs (1)

4 and (2) shall be increased by an amount equal to such

5 dollar amount multiplied by the cost-of-living adjustment

6 determined under section 1(f)(3) for the calendar year in

7 which the taxable year begins, by substituting ‘calendar

8 year 1998’ for ‘calendar year 1992’ in subparagraph (B)

9 thereof. If any dollar amount after being increased under

10 the preceding sentence is not a multiple of $10, such dollar

11 amount shall be rounded to the nearest multiple of $10.

12 The amount determined’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section apply to taxable years beginning after Decem15 ber 31, 1999.

16 SEC. 202. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME

17 PARENTS.

18 (a) IN GENERAL.—Section 21(e) of the Internal Rev19 enue Code of 1986 (relating to special rules) is amended

20 by adding at the end the following:

21 ‘‘(11) MINIMUM CREDIT ALLOWED FOR STAY22 AT-HOME PARENTS.—Notwithstanding subsection

23 (d), in the case of any taxpayer with one or more

24 qualifying individuals described in subsection

25 (b)(1)(A) under the age of 1 at any time during the
43

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1 taxable year, such taxpayer shall be deemed to have

2 employment-related expenses with respect to such

3 qualifying individuals in an amount equal to the sum

4 of—

5 ‘‘(A) $90 for each month in such taxable

6 year during which at least one of such quali7 fying individuals is under the age of 1, and

8 ‘‘(B) the amount of employment-related ex9 penses otherwise incurred for such qualifying

10 individuals for the taxable year (determined

11 under this section without regard to this para12 graph).’’.

13 (b) EFFECTIVE DATE.—The amendments made by

14 this section apply to taxable years beginning after Decem15 ber 31, 1999.

16 SEC. 203. CREDIT MADE REFUNDABLE.

17 (a) IN GENERAL.—Part IV of subchapter A of chap18 ter 1 of the Internal Revenue Code of 1986 (relating to

19 credits against tax) is amended—

20 (1) by redesignating section 35 as section 36,

21 and

22 (2) by redesignating section 21 as section 35.

23 (b) ADVANCE PAYMENT OF CREDIT.—Chapter 25 of

24 such Code (relating to general provisions relating to em-
44

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1 ployment taxes) is amended by inserting after section

2 3507 the following:

3 ‘‘SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE

4 CREDIT.

5 ‘‘(a) GENERAL RULE.—Except as otherwise provided

6 in this section, every employer making payment of wages

7 with respect to whom a dependent care eligibility certifi8 cate is in effect shall, at the time of paying such wages,

9 make an additional payment equal to such employee’s de10 pendent care advance amount.

11 ‘‘(b) DEPENDENT CARE ELIGIBILITY CERTIFI12 CATE.—For purposes of this title, a dependent care eligi13 bility certificate is a statement furnished by an employee

14 to the employer which—

15 ‘‘(1) certifies that the employee will be eligible

16 to receive the credit provided by section 35 for the

17 taxable year,

18 ‘‘(2) certifies that the employee reasonably ex19 pects to be an applicable taxpayer for the taxable

20 year,

21 ‘‘(3) certifies that the employee does not have

22 a dependent care eligibility certificate in effect for

23 the calendar year with respect to the payment of

24 wages by another employer,
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1 ‘‘(4) states whether or not the employee’s

2 spouse has a dependent care eligibility certificate in

3 effect,

4 ‘‘(5) states the number of qualifying individuals

5 in the household maintained by the employee, and

6 ‘‘(6) estimates the amount of employment-re7 lated expenses for the calendar year.

8 ‘‘(c) DEPENDENT CARE ADVANCE AMOUNT.—

9 ‘‘(1) IN GENERAL.—For purposes of this title,

10 the term ‘dependent care advance amount’ means,

11 with respect to any payroll period, the amount

12 determined—

13 ‘‘(A) on the basis of the employee’s wages

14 from the employer for such period,

15 ‘‘(B) on the basis of the employee’s esti16 mated employment-related expenses included in

17 the dependent care eligibility certificate, and

18 ‘‘(C) in accordance with tables provided by

19 the Secretary.

20 ‘‘(2) ADVANCE AMOUNT TABLES.—The tables

21 referred to in paragraph (1)(C) shall be similar in

22 form to the tables prescribed under section 3402

23 and, to the maximum extent feasible, shall be coordi24 nated with such tables and the tables prescribed

25 under section 3507(c).
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1 ‘‘(d) OTHER RULES.—For purposes of this section,

2 rules similar to the rules of subsections (d) and (e) of sec3 tion 3507 shall apply.

4 ‘‘(e) DEFINITIONS.—For purposes of this section,

5 terms used in this section which are defined in section 35

6 shall have the respective meanings given such terms by

7 section 35.’’.

8 (c) CONFORMING AMENDMENTS.—

9 (1) Section 35(a)(1) of such Code, as redesig10 nated by paragraph (1), is amended by striking

11 ‘‘chapter’’ and inserting ‘‘subtitle’’.

12 (2) Section 35(e) of such Code, as so redesig13 nated and amended by subsection (c), is amended by

14 adding at the end the following:

15 ‘‘(12) COORDINATION WITH ADVANCE PAY16 MENTS AND MINIMUM TAX.—Rules similar to the

17 rules of subsections (g) and (h) of section 32 shall

18 apply for purposes of this section.’’.

19 (3) Sections 23(f)(1) and 129(a)(2)(C) of such

20 Code are each amended by striking ‘‘section 21(e)’’

21 and inserting ‘‘section 35(e)’’.

22 (4) Section 129(b)(2) of such Code is amended

23 by striking ‘‘section 21(d)(2)’’ and inserting ‘‘section

24 35(d)(2)’’.
47

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1 (5) Section 129(e)(1) of such Code is amended

2 by striking ‘‘section 21(b)(2)’’ and inserting ‘‘section

3 35(b)(2)’’.

4 (6) Section 213(e) of such Code is amended by

5 striking ‘‘section 21’’ and inserting ‘‘section 35’’.

6 (7) Section 995(f)(2)(C) of such Code is

7 amended by striking ‘‘and 34’’ and inserting ‘‘34,

8 and 35’’.

9 (8) Section 6211(b)(4)(A) of such Code is

10 amended by striking ‘‘and 34’’ and inserting ‘‘, 34,

11 and 35’’.

12 (9) Section 6213(g)(2)(H) of such Code is

13 amended by striking ‘‘section 21’’ and inserting

14 ‘‘section 35’’.

15 (10) Section 6213(g)(2)(L) of such Code is

16 amended by striking ‘‘section 21, 24, or 32’’ and in17 serting ‘‘section 24, 32, or 35’’.

18 (11) The table of sections for subpart C of part

19 IV of subchapter A of chapter 1 of such Code is

20 amended by striking the item relating to section 35

21 and inserting the following:

‘‘Sec. 35. Dependent care services.

‘‘Sec. 36. Overpayments of tax.’’.

22 (12) The table of sections for subpart A of such

23 part IV is amended by striking the item relating to

24 section 21.
48

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1 (13) The table of sections for chapter 25 of

2 such Code is amended by adding after the item re3 lating to section 3507 the following:

‘‘Sec. 3507A. Advance payment of dependent care credit.’’.

4 (14) Section 1324(b)(2) of title 31, United

5 States Code, is amended by inserting before the pe6 riod ‘‘, or enacted by the Child Development Act’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section apply to taxable years beginning after Decem9 ber 31, 1999.

10 TITLE III—QUALITY CHILD CARE

11 LOAN FORGIVENESS

12 SEC. 301. SHORT TITLE.

13 This title may be cited as the ‘‘Quality Child Care

14 Loan Forgiveness Act’’.

15 SEC. 302. FINDINGS.

16 Congress makes the following findings:

17 (1) New scientific research shows that the elec18 trical activity of brain cells actually changes the

19 physical structure of the brain, and that without a

20 stimulating environment, a baby’s brain suffers.

21 (2) 12,000,000 children under age 6, and

22 17,000,000 school-aged children of working parents,

23 need child care. Demand for child care is growing as

24 more mothers enter the workforce.
49

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1 (3) Good quality child care, in a safe environ2 ment, with trained, caring providers who offer stim3 ulating activities appropriate to the child’s age, help

4 children grow and thrive. Recent research shows

5 that most child care needs significant improvement.

6 (4) Good quality child care depends largely on

7 the provider. Yet providers of child care earn on av8 erage only $6.70 per hour or $11,725 per year. Such

9 earnings cause high turnover, which affects the over10 all quality of a child care program and causes anx11 iety for children.

12 (5) Children attending lower-quality child care

13 facilities and child care facilities with high staff

14 turnover are less competent in language and social

15 development.

16 (6) Low-income and high-income children are

17 more likely than middle-income children to attend

18 child care facilities providing high quality child care.

19 (7) The quality of child care is primarily related

20 to high staff-to-child ratios, staff education, and ad21 ministrators’ prior experience. In addition, certain

22 characteristics distinguish poor, mediocre, and good23 quality child care facilities, the most important of

24 which are teacher wages, education, and specialized

25 training.
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1 SEC. 303. PURPOSES.

2 The purposes of this title are—

3 (1) to bring more highly trained individuals into

4 the early child care profession; and

5 (2) to keep more highly trained child care pro6 viders in the early child care field for longer periods

7 of time.

8 SEC. 304. LOAN FORGIVENESS FOR CHILD CARE PRO9 VIDERS.

10 Section 428K(h) of the Higher Education Act of

11 1965 (20 U.S.C. 1078–11(h)) is amended by striking

12 ‘‘$10,000,000’’ and inserting ‘‘$200,000,000’’.

13 SEC. 305. LOAN CANCELLATION.

14 Section 465(a) of the Higher Education Act of 1965

15 (20 U.S.C. 1087ee(a)) is amended—

16 (1) in paragraph (2)—

17 (A) by redesignating subparagraphs (G),

18 (H), and (I) as subparagraphs (H), (I), and

19 (J), respectively; and

20 (B) by inserting after subparagraph (F)

21 the following:

22 ‘‘(G) as a full-time child care provider or

23 educator—

24 ‘‘(i) in a child care facility operated by

25 an entity that meets the applicable State

26 or local government licensing, certification,
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1 approval, or registration requirements, if

2 any; and

3 ‘‘(ii) who has a degree in early child4 hood education;’’; and

5 (2) in paragraph (3)(A)—

6 (A) in clause (i), by striking ‘‘(G), (H), or

7 (I)’’ and inserting ‘‘(H), (I), or (J)’’; and

8 (B) in clause (ii), by inserting ‘‘or (G)’’

9 after ‘‘subparagraph (B)’’.

10 TITLE IV—OFFSETS

11 SEC. 401. OFFSETS RELATING TO TAX PROVISIONS.

12 (a) REPEAL OF OIL AND GAS PERCENTAGE DEPLE13 TION ALLOWANCE.—Section 613A of the Internal Rev14 enue Code of 1986 is amended by adding at the end the

15 following new subsection:

16 ‘‘(f) TERMINATION.—This section shall not apply on

17 and after January 1, 2000.’’.

18 (b) REPEAL OF ENHANCED OIL RECOVERY CRED19 IT.—Section 43 of the Internal Revenue Code of 1986 is

20 amended by adding at the end the following:

21 ‘‘(f) TERMINATION.—In the case of taxable years be22 ginning after December 31, 1999, the enhanced oil recov23 ery credit is zero.’’.

24 (c) REPEAL OF EXEMPTION FROM ALTERNATIVE

25 MINIMUM TAX FOR SMALL CORPORATIONS.—
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1 (1) REPEAL.—Section 55 of the Internal Rev2 enue Code of 1986 is amended by striking sub3 section (e).

4 (2) EFFECTIVE DATE.—The repeal made by

5 paragraph (1) shall apply to taxable years beginning

6 after December 31, 1998.

7 (d) REPEAL OF SECTION 911 INCOME EXCLUSION.—

8 Section 911(b) of the Internal Revenue Code of 1986 is

9 amended by adding at the end the following:

10 ‘‘(3) TERMINATION.—In the case of any taxable

11 year beginning after December 31, 1999, foreign

12 earned income shall be zero.’’.

13 SEC. 402. OFFSETS RELATING TO DEFENSE CUTS.

14 (a) TERMINATION OF F–22 AIRCRAFT PROGRAM.—

15 (1) TERMINATION.—The Secretary of Defense

16 shall terminate the F–22 aircraft program.

17 (2) TERMINATION COSTS.—On and after the

18 date of the enactment of this Act, funds available for

19 the F–22 aircraft program may be obligated for that

20 program only for the costs of terminating the pro21 gram.

22 (b) REDUCTION IN INVENTORY OF STRATEGIC NU23 CLEAR DELIVERY SYSTEMS.—

24 (1) REDUCTION REQUIRED.—The President

25 shall reduce the United States inventory of strategic
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1 nuclear delivery systems to the levels applicable to

2 the United States, within the time provided, in the

3 START II Treaty.

4 (2) START II TREATY DEFINED.—In this sec5 tion, the term ‘‘START II Treaty’’ means the Trea6 ty Between the United States of America and the

7 Russian Federation on Further Reduction and Limi8 tation of Strategic Offensive Arms, signed at Mos9 cow on January 3, 1993, including the following

10 protocols and memorandum of understanding, all

11 such documents being integral parts of and collec12 tively referred to as the ‘‘START II Treaty’’ (con13 tained in Treaty Document 103–1):

14 (A) The Protocol on Procedures Governing

15 Elimination of Heavy ICBMs and on Proce16 dures Governing Conversion of Silo Launchers

17 of Heavy ICBMs Relating to the Treaty Be18 tween the United States of America and the

19 Russian Federation on Further Reduction and

20 Limitation of Strategic Offensive Arms (also

21 known as the ‘‘Elimination and Conversion Pro22 tocol’’).

23 (B) The Protocol on Exhibitions and In24 spections of Heavy Bombers Relating to the

25 Treaty Between the United States and the Rus-
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1 sian Federation on Further Reduction and

2 Limitation of Strategic Offensive Arms (also

3 known as the ‘‘Exhibitions and Inspections Pro4 tocol’’).

5 (C) The Memorandum of Understanding

6 on Warhead Attribution and Heavy Bomber

7 Data Relating to the Treaty Between the

8 United States of America and the Russian Fed9 eration on Further Reduction and Limitation of

10 Strategic Offensive Arms (also known as the

11 ‘‘Memorandum on Attribution’’).

12 SEC. 403. REDUCTION IN AMOUNT AVAILABLE FOR INTEL13 LIGENCE ACTIVITIES IN FISCAL YEARS 2000

14 THROUGH 2004.

15 Notwithstanding any other provision of law, the total

16 amount available in fiscal year 2000, 2001, 2002, 2003,

17 or 2004 for the conduct of the intelligence and intel18 ligence-related activities of the United States Government

19 shall be—

20 (1) the amount otherwise authorized to be ap21 propriated for the conduct of such activities in such

22 fiscal year; minus

23 (2) the amount equal to 5 percent of the

24 amount referred to in paragraph (1).
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1 SEC. 404. RECOUPMENT OF FOREIGN MILITARY SALES

2 COSTS AND EXPENSES.

3 (a) PLANT AND PRODUCTION COSTS; NON4 RECURRING COSTS.—

5 (1) IN GENERAL.—Section 21(e)(1) of the

6 Arms Export Control Act (22 U.S.C. 2761(e)(1)) is

7 amended—

8 (A) by redesignating subparagraphs (B)

9 and (C) as subparagraphs (C) and (D), respec10 tively;

11 (B) by inserting after subparagraph (A)

12 the following:

13 ‘‘(B) any use of plant and production equip14 ment in connection with such defense articles;’’; and

15 (C) in subparagraph (C) (as redesignated)

16 by striking ‘‘(except for’’ and all that follows

17 through ‘‘this Act)’’.

18 (2) CONFORMING AMENDMENT.—Section

19 21(e)(2)(A) of the Arms Export Control Act (22

20 U.S.C. 2761(e)(2)(A)) is amended—

21 (A) in subparagraphs (B) and (C), by

22 striking ‘‘paragraph (1)(B)’’ each place it ap23 pears and inserting ‘‘paragraphs (1)(B) and

24 (1)(C)’’; and
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1 (B) in subparagraph (C), by striking

2 ‘‘paragraph (1)(B)’’ and inserting paragraph

3 (1)(C)’’.

4 (b) ADMINISTRATIVE EXPENSES.—Section 43(b)(3)

5 of the Arms Export Control Act (22 U.S.C. 2792(b)(3))

6 is amended—

7 (1) by striking ‘‘are neither’’ and inserting ‘‘in8 clude the’’; and

9 (2) by striking ‘‘nor represent’’ and inserting

10 ‘‘and the’’.

11 SEC. 405. TERMINATION OF UNITED STATES PARTICIPA12 TION IN THE INTERNATIONAL SPACE STA13 TION PROGRAM.

14 (a) TERMINATION.—The Administrator of the Na15 tional Aeronautics and Space Administration shall termi16 nate the participation of the United States in the Inter17 national Space Station program.

18 (b) TERMINATION COSTS.—On and after the date of

19 enactment of this Act, the Administrator of the National

20 Aeronautics and Space Administration may obligate funds

21 made available to the Administrator for the participation

22 of the United States in the International Space Station

23 program only for the costs of terminating the participation

24 of the United States in that program.

Æ