II

106TH CONGRESS

1ST SESSION S. 599

To amend the Internal Revenue Code of 1986 to provide additional tax

relief to families to increase the affordability of child care, and for

other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 11, 1999

Mr. CHAFEE (for himself, Mr. HATCH, Mr. COCHRAN, Ms. SNOWE, Mr. ROBERTS, Mr. SPECTER, and Ms. COLLINS) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide

additional tax relief to families to increase the affordability of child care, and for other purposes.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Caring for Children Act’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.
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TITLE I—TAX RELIEF TO INCREASE CHILD CARE

AFFORDABILITY

Sec. 101. Expansion of dependent care tax credit.

Sec. 102. Promotion of dependent care assistance programs.

Sec. 103. Allowance of credit for employer expenses for child care assistance.

TITLE II—ENCOURAGING QUALITY CHILD CARE

Subtitle A—Dissemination of Information About Quality Child Care

Sec. 201. Collection and dissemination of information.

Sec. 202. Grants for the development of a child care training infrastructure.

Sec. 203. Authorization of appropriations.

Subtitle B—Increased Enforcement of State Health and Safety Standards

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

Subtitle C—Removal of Barriers to Increasing the Supply of Quality Child

Care

Sec. 221. Increased authorization of appropriations for the Child Care and Development Block Grant Act.

Sec. 222. Small business child care grant program.

Sec. 223. GAO report regarding the relationship between legal liability concerns

and the availability and affordability of child care.

Subtitle D—Quality Child Care Through Federal Facilities and Programs

Sec. 231. Providing quality child care in Federal facilities.

1 TITLE I—TAX RELIEF TO IN2 CREASE CHILD CARE AF3 FORDABILITY

4 SEC. 101. EXPANSION OF DEPENDENT CARE TAX CREDIT.

5 (a) PERCENTAGE OF EMPLOYMENT-RELATED EX6 PENSES DETERMINED BY TAXPAYER STATUS.—Section

7 21(a)(2) of the Internal Revenue Code of 1986 (defining

8 applicable percentage) is amended to read as follows:

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

10 purposes of paragraph (1), the term ‘applicable per11 centage’ means 50 percent reduced (but not below

12 zero) by 1 percentage point for each $1,500, or frac-
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1 tion thereof, by which the taxpayers’s adjusted gross

2 income for the taxable year exceeds $30,000.’’.

3 (b) MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME

4 PARENTS.—Section 21(e) of the Internal Revenue Code

5 of 1986 (relating to special rules) is amended by adding

6 at the end the following:

7 ‘‘(11) MINIMUM CREDIT ALLOWED FOR STAY8 AT-HOME PARENTS.—Notwithstanding subsection

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

10 qualifying individuals described in subsection

11 (b)(1)(A) under the age of 4 at any time during the

12 taxable year, such taxpayer shall be deemed to have

13 employment-related expenses with respect to such

14 qualifying individuals in an amount equal to the

15 greater of—

16 ‘‘(A) the amount of employment-related ex17 penses incurred for such qualifying individuals

18 for the taxable year (determined under this sec19 tion without regard to this paragraph), or

20 ‘‘(B) $150 for each month in such taxable

21 year during which such qualifying individual is

22 under the age of 4.’’.

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

24 this section apply to taxable years beginning after Decem25 ber 31, 1998.
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1 SEC. 102. PROMOTION OF DEPENDENT CARE ASSISTANCE

2 PROGRAMS.

3 (a) PROMOTION OF DEPENDENT CARE ASSISTANCE

4 PROGRAMS.—The Secretary of Labor shall establish a

5 program to promote awareness of the use of dependent

6 care assistance programs (as described in section 129(d)

7 of the Internal Revenue Code of 1986) by employers.

8 (b) AUTHORIZATION OF APPROPRIATIONS.—There is

9 authorized to be appropriated to carry out the program

10 under paragraph (1) $1,000,000 for each of fiscal years

11 2000, 2001, 2002, and 2003.

12 SEC. 103. ALLOWANCE OF CREDIT FOR EMPLOYER EX13 PENSES FOR CHILD CARE ASSISTANCE.

14 (a) IN GENERAL.—Subpart D of part IV of sub15 chapter A of chapter 1 of the Internal Revenue Code of

16 1986 (relating to business related credits) is amended by

17 adding at the end the following:

18 ‘‘SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

19 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec20 tion 38, the employer-provided child care credit deter21 mined under this section for the taxable year is an amount

22 equal to 20 percent of the qualified child care expenditures

23 of the taxpayer for such taxable year.

24 ‘‘(b) DOLLAR LIMITATION.—The credit allowable

25 under subsection (a) for any taxable year shall not exceed

26 $100,000.
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1 ‘‘(c) DEFINITIONS.—For purposes of this section—

2 ‘‘(1) QUALIFIED CHILD CARE EXPENDITURE.—

3 ‘‘(A) IN GENERAL.—The term ‘qualified

4 child care expenditure’ means any amount paid

5 or incurred—

6 ‘‘(i) to acquire, construct, rehabilitate,

7 or expand property—

8 ‘‘(I) which is to be used as part

9 of a qualified child care facility of the

10 taxpayer,

11 ‘‘(II) with respect to which a de12 duction for depreciation (or amortiza13 tion in lieu of depreciation) is allow14 able, and

15 ‘‘(III) which does not constitute

16 part of the principal residence (within

17 the meaning of section 1034) of the

18 taxpayer or any employee of the tax19 payer,

20 ‘‘(ii) for the operating costs of a quali21 fied child care facility of the taxpayer, in22 cluding costs related to the training of em23 ployees,
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1 ‘‘(iii) under a contract with a qualified

2 child care facility to provide child care

3 services to employees of the taxpayer, or

4 ‘‘(iv) under a contract to provide child

5 care resource and referral services to em6 ployees of the taxpayer.

7 ‘‘(2) EXCLUSION FOR AMOUNTS FUNDED BY

8 GRANTS, ETC.—The term ‘qualified child care ex9 penditure’ shall not include any amount to the ex10 tent such amount is funded by any grant, contract,

11 or otherwise by another person (or any governmental

12 entity).

13 ‘‘(3) QUALIFIED CHILD CARE FACILITY.—

14 ‘‘(A) IN GENERAL.—The term ‘qualified

15 child care facility’ means a facility—

16 ‘‘(i) the principal use of which is to

17 provide child care assistance, and

18 ‘‘(ii) which meets the requirements of

19 all applicable laws and regulations of the

20 State or local government in which it is lo21 cated, including, but not limited to, the li22 censing of the facility as a child care facil23 ity.
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1 Clause (i) shall not apply to a facility which is

2 the principal residence (within the meaning of

3 section 1034) of the operator of the facility.

4 ‘‘(B) SPECIAL RULES WITH RESPECT TO A

5 TAXPAYER.—A facility shall not be treated as a

6 qualified child care facility with respect to a

7 taxpayer unless—

8 ‘‘(i) enrollment in the facility is open

9 to employees of the taxpayer during the

10 taxable year,

11 ‘‘(ii) the facility is not the principal

12 trade or business of the taxpayer unless at

13 least 30 percent of the enrollees of such fa14 cility are dependents of employees of the

15 taxpayer, and

16 ‘‘(iii) the use of such facility (or the

17 eligibility to use such facility) does not dis18 criminate in favor of employees of the tax19 payer who are highly compensated employ20 ees (within the meaning of section 414(q)).

21 ‘‘(d) RECAPTURE OF ACQUISITION AND CONSTRUC22 TION CREDIT.—

23 ‘‘(1) IN GENERAL.—If, as of the close of any

24 taxable year, there is a recapture event with respect

25 to any qualified child care facility of the taxpayer,
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1 then the tax of the taxpayer under this chapter for

2 such taxable year shall be increased by an amount

3 equal to the product of—

4 ‘‘(A) the applicable recapture percentage,

5 and

6 ‘‘(B) the aggregate decrease in the credits

7 allowed under section 38 for all prior taxable

8 years which would have resulted if the qualified

9 child care expenditures of the taxpayer de10 scribed in subsection (c)(1)(A) with respect to

11 such facility had been zero.

12 ‘‘(2) APPLICABLE RECAPTURE PERCENTAGE.—

13 ‘‘(A) IN GENERAL.—For purposes of this

14 subsection, the applicable recapture percentage

15 shall be determined from the following table:

The applicable

recapture

‘‘If the recapture event occurs in: percentage is:

Years 1–3 .................................................................. 100

Year 4 ........................................................................ 85

Year 5 ........................................................................ 70

Year 6 ........................................................................ 55

Year 7 ........................................................................ 40

Year 8 ........................................................................ 25

Years 9 and 10 .......................................................... 10

Years 11 and thereafter ............................................ 0.

16 ‘‘(B) YEARS.—For purposes of subpara17 graph (A), year 1 shall begin on the first day

18 of the taxable year in which the qualified child

19 care facility is placed in service by the taxpayer.
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1 ‘‘(3) RECAPTURE EVENT DEFINED.—For pur2 poses of this subsection, the term ‘recapture event’

3 means—

4 ‘‘(A) CESSATION OF OPERATION.—The

5 cessation of the operation of the facility as a

6 qualified child care facility.

7 ‘‘(B) CHANGE IN OWNERSHIP.—

8 ‘‘(i) IN GENERAL.—Except as pro9 vided in clause (ii), the disposition of a

10 taxpayer’s interest in a qualified child care

11 facility with respect to which the credit de12 scribed in subsection (a) was allowable.

13 ‘‘(ii) AGREEMENT TO ASSUME RECAP14 TURE LIABILITY.—Clause (i) shall not

15 apply if the person acquiring such interest

16 in the facility agrees in writing to assume

17 the recapture liability of the person dispos18 ing of such interest in effect immediately

19 before such disposition. In the event of

20 such an assumption, the person acquiring

21 the interest in the facility shall be treated

22 as the taxpayer for purposes of assessing

23 any recapture liability (computed as if

24 there had been no change in ownership).

25 ‘‘(4) SPECIAL RULES.—
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1 ‘‘(A) TAX BENEFIT RULE.—The tax for

2 the taxable year shall be increased under para3 graph (1) only with respect to credits allowed

4 by reason of this section which were used to re5 duce tax liability. In the case of credits not so

6 used to reduce tax liability, the carryforwards

7 and carrybacks under section 39 shall be appro8 priately adjusted.

9 ‘‘(B) NO CREDITS AGAINST TAX.—Any in10 crease in tax under this subsection shall not be

11 treated as a tax imposed by this chapter for

12 purposes of determining the amount of any

13 credit under subpart A, B, or D of this part.

14 ‘‘(C) NO RECAPTURE BY REASON OF CAS15 UALTY LOSS.—The increase in tax under this

16 subsection shall not apply to a cessation of op17 eration of the facility as a qualified child care

18 facility by reason of a casualty loss to the ex19 tent such loss is restored by reconstruction or

20 replacement within a reasonable period estab21 lished by the Secretary.

22 ‘‘(e) SPECIAL RULES.—For purposes of this

23 section—

24 ‘‘(1) AGGREGATION RULES.—All persons which

25 are treated as a single employer under subsections
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1 (a) and (b) of section 52 shall be treated as a single

2 taxpayer.

3 ‘‘(2) PASS-THRU IN THE CASE OF ESTATES AND

4 TRUSTS.—Under regulations prescribed by the Sec5 retary, rules similar to the rules of subsection (d) of

6 section 52 shall apply.

7 ‘‘(3) ALLOCATION IN THE CASE OF PARTNER8 SHIPS.—In the case of partnerships, the credit shall

9 be allocated among partners under regulations pre10 scribed by the Secretary.

11 ‘‘(f) NO DOUBLE BENEFIT.—

12 ‘‘(1) REDUCTION IN BASIS.—For purposes of

13 this subtitle—

14 ‘‘(A) IN GENERAL.—If a credit is deter15 mined under this section with respect to any

16 property by reason of expenditures described in

17 subsection (c)(1)(A), the basis of such property

18 shall be reduced by the amount of the credit so

19 determined.

20 ‘‘(B) CERTAIN DISPOSITIONS.—If during

21 any taxable year there is a recapture amount

22 determined with respect to any property the

23 basis of which was reduced under subparagraph

24 (A), the basis of such property (immediately be25 fore the event resulting in such recapture) shall
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1 be increased by an amount equal to such recap2 ture amount. For purposes of the preceding

3 sentence, the term ‘recapture amount’ means

4 any increase in tax (or adjustment in

5 carrybacks or carryovers) determined under

6 subsection (d).

7 ‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No

8 deduction or credit shall be allowed under any other

9 provision of this chapter with respect to the amount

10 of the credit determined under this section.

11 ‘‘(g) TERMINATION.—This section shall not apply to

12 taxable years beginning after December 31, 2003.’’.

13 (b) CONFORMING AMENDMENTS.—

14 (1) Section 38(b) of the Internal Revenue Code

15 of 1986 is amended—

16 (A) by striking out ‘‘plus’’ at the end of

17 paragraph (11),

18 (B) by striking out the period at the end

19 of paragraph (12), and inserting a comma and

20 ‘‘plus’’, and

21 (C) by adding at the end the following new

22 paragraph:

23 ‘‘(13) the employer-provided child care credit

24 determined under section 45D.’’.
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1 (2) The table of sections for subpart D of part

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

3 amended by adding at the end the following new

4 item:

‘‘Sec. 45D. Employer-provided child care credit.’’.

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

6 this section shall apply to taxable years beginning after

7 December 31, 1998.

8 TITLE II—ENCOURAGING

9 QUALITY CHILD CARE

10 Subtitle A—Dissemination of Infor11 mation About Quality Child

12 Care

13 SEC. 201. COLLECTION AND DISSEMINATION OF INFORMA14 TION.

15 (a) COLLECTION AND DISSEMINATION OF INFORMA16 TION.—The Secretary of Health and Human Services

17 shall, directly or through a contract awarded on a competi18 tive basis to a qualified entity, collect and disseminate—

19 (1) information concerning health and safety in

20 various child care settings that would assist—

21 (A) the provision of safe and healthful en22 vironments by child care providers; and

23 (B) the evaluation of child care providers

24 by parents; and
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1 (2) relevant findings in the field of early child2 hood learning and development.

3 (b) INFORMATION AND FINDINGS TO BE GEN4 ERALLY AVAILABLE.—

5 (1) SECRETARIAL RESPONSIBILITY.—The Sec6 retary of Health and Human Services shall make the

7 information and findings described in subsection (a)

8 generally available to States, units of local govern9 ments, private nonprofit child care organizations (in10 cluding resource and referral agencies), employers,

11 child care providers, and parents.

12 (2) DEFINITION OF GENERALLY AVAILABLE.—

13 For purposes of paragraph (1), the term ‘‘generally

14 available’’ means that the information and findings

15 shall be distributed through resources that are used

16 by, and available to, the public, including such re17 sources as brochures, Internet web sites, toll-free

18 telephone information lines, and public and private

19 resource and referral organizations.

20 SEC. 202. GRANTS FOR THE DEVELOPMENT OF A CHILD

21 CARE TRAINING INFRASTRUCTURE.

22 (a) AUTHORITY TO AWARD GRANTS.—The Secretary

23 of Health and Human Services shall award grants to eligi24 ble entities to develop distance learning child care training

25 technology infrastructures and to develop model tech-
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1 nology-based training courses for child care providers and

2 child care workers. The Secretary shall, to the maximum

3 extent possible, ensure that grants for the development of

4 distance learning child care training technology infrastruc5 tures are awarded in those regions of the United States

6 with the fewest training opportunities for child care pro7 viders.

8 (b) ELIGIBILITY REQUIREMENTS.—To be eligible to

9 receive a grant under subsection (a), an entity shall—

10 (1) develop the technological and logistical as11 pects of the infrastructure described in this section

12 and have the capability of implementing and main13 taining the infrastructure;

14 (2) to the maximum extent possible, develop

15 partnerships with secondary schools, institutions of

16 higher education, State and local government agen17 cies, and private child care organizations for the

18 purpose of sharing equipment, technical assistance,

19 and other technological resources, including—

20 (A) sites from which individuals may ac21 cess the training;

22 (B) conversion of standard child care

23 training courses to programs for distance learn24 ing; and
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1 (C) ongoing networking among program

2 participants; and

3 (3) develop a mechanism for participants to—

4 (A) evaluate the effectiveness of the infra5 structure, including the availability and afford6 ability of the infrastructure, and the training

7 offered the infrastructure; and

8 (B) make recommendations for improve9 ments to the infrastructure.

10 (c) APPLICATION.—To be eligible to receive a grant

11 under subsection (a), an entity shall submit an application

12 to the Secretary at such time and in such manner as the

13 Secretary may require, and that includes—

14 (1) a description of the partnership organiza15 tions through which the distance learning programs

16 will be disseminated and made available;

17 (2) the capacity of the infrastructure in terms

18 of the number and type of distance learning pro19 grams that will be made available;

20 (3) the expected number of individuals to par21 ticipate in the distance learning programs; and

22 (4) such additional information as the Secretary

23 may require.

24 (d) LIMITATION ON FEES.—No entity receiving a

25 grant under this section may collect fees from an individ-
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1 ual for participation in a distance learning child care

2 training program funded in whole or in part by this sec3 tion that exceed the pro rata share of the amount ex4 pended by the entity to provide materials for the training

5 program and to develop, implement, and maintain the in6 frastructure (minus the amount of the grant awarded by

7 this section).

8 (e) RULE OF CONSTRUCTION.—Nothing in this sec9 tion shall be construed as requiring a child care provider

10 to subscribe to or complete a distance learning child care

11 training program made available by this section.

12 SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

13 There is authorized to be appropriated to carry out

14 this subtitle $50,000,000 for each of fiscal years 2000

15 through 2004.

16 Subtitle B—Increased Enforcement

17 of State Health and Safety

18 Standards

19 SEC. 211. ENFORCEMENT OF STATE HEALTH AND SAFETY

20 STANDARDS.

21 (a) IDENTIFICATION OF STATE INSPECTION RATE.—

22 (1) IN GENERAL.—Section 658E(c)(2)(G) of

23 the Child Care and Development Block Grant Act of

24 1990 (42 U.S.C. 9858c(2)(G)) is amended by strik25 ing the period and inserting ‘‘, and provide the per-
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1 centage of completed child care provider inspections

2 that were required under State law for each of the

3 2 preceding fiscal years.’’.

4 (2) EFFECTIVE DATE.—The amendment made

5 by paragraph (1) applies to State plans under the

6 Child Care and Development Block Grant Act of

7 1990 (42 U.S.C. 9858 et seq.) on and after Septem8 ber 1, 1999.

9 (b) INCREASED OR DECREASED ALLOTMENTS.—Sec10 tion 658O(b) of the Child Care and Development Block

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

12 (1) in paragraph (1), in the matter preceding

13 subparagraph (A), by inserting ‘‘, subject to para14 graph (5),’’ after ‘‘shall’’; and

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

16 ‘‘(5) INCREASED OR DECREASED ALLOTMENT

17 BASED ON STATE INSPECTION RATE.—

18 ‘‘(A) INCREASED ALLOTMENT FOR FISCAL

19 YEARS 2000, 2001, AND 2002.—

20 ‘‘(i) IN GENERAL.—Subject to clause

21 (iii), for fiscal years 2000, 2001, and

22 2002, the allotment determined for a State

23 under paragraph (1) for each such fiscal

24 year shall be increased by an amount equal

25 to 10 percent of such allotment for the fis-
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1 cal year involved with respect to any

2 State—

3 ‘‘(I) that certifies to the Sec4 retary that the State has not reduced

5 the scope of any State child care

6 health or safety standards or require7 ments that were in effect as of De8 cember 31, 1998; and

9 ‘‘(II) that, with respect to the

10 preceding fiscal year, had a percent11 age of completed child care provider

12 inspections (as required to be reported

13 under section 658E(c)(2)(G)), that

14 equaled or exceeded the target inspec15 tion and enforcement percentage spec16 ified under clause (ii) for the fiscal

17 year for which the allotment is to be

18 paid.

19 ‘‘(ii) TARGET INSPECTION AND EN20 FORCEMENT PERCENTAGE.—For purposes

21 of clause (i)(II), the target inspection and

22 enforcement percentage is—

23 ‘‘(I) for fiscal year 2000, 75 per24 cent;
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1 ‘‘(II) for fiscal year 2001, 80

2 percent; and

3 ‘‘(III) for fiscal year 2002, 100

4 percent.

5 ‘‘(iii) PRO RATA REDUCTIONS IF IN6 SUFFICIENT APPROPRIATIONS.—The Sec7 retary shall make pro rata reductions in

8 the percentage increase otherwise required

9 under clause (i) for a State allotment for

10 a fiscal year as necessary so that the ag11 gregate of all the allotments made under

12 this section do not exceed the amount ap13 propriated for that fiscal year under sec14 tion 658B.

15 ‘‘(B) DECREASED ALLOTMENT FOR FISCAL

16 YEARS 2001 AND 2002.—

17 ‘‘(i) IN GENERAL.—The allotment de18 termined for a State under paragraph (1)

19 for each of fiscal years 2001 and 2002

20 shall be decreased by an amount equal to

21 10 percent of such allotment for the fiscal

22 year involved with respect to any State

23 that, with respect to the preceding fiscal

24 year, had a percentage of completed child

25 care provider inspections (as required to be
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1 reported under section 658E(c)(2)(G))

2 that was below the minimum inspection

3 and enforcement percentage specified

4 under clause (ii) for the fiscal year for

5 which the allotment is to be paid.

6 ‘‘(ii) MINIMUM INSPECTION AND EN7 FORCEMENT PERCENTAGE.—For purposes

8 of clause (i), the minimum inspection and

9 enforcement percentage is—

10 ‘‘(I) for fiscal year 2001, 50 per11 cent; and

12 ‘‘(II) for fiscal year 2002, 75

13 percent.

14 ‘‘(iii) REQUIREMENT TO EXPEND

15 STATE FUNDS TO REPLACE REDUCTION.—

16 If the allotment determined for a State for

17 a fiscal year is reduced by reason of clause

18 (i), the State shall, during the immediately

19 succeeding fiscal year, expend additional

20 State funds under the State plan funded

21 under this subchapter by an amount equal

22 to the amount of such reduction.’’.
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1 Subtitle C—Removal of Barriers to

2 Increasing the Supply of Quality

3 Child Care

4 SEC. 221. INCREASED AUTHORIZATION OF APPROPRIA5 TIONS FOR THE CHILD CARE AND DEVELOP6 MENT BLOCK GRANT ACT.

7 Section 658B of the Child Care and Development

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

9 to read as follows:

10 ‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

11 ‘‘There is authorized to be appropriated to carry out

12 this subchapter—

13 ‘‘(1) for fiscal year 1999, $1,182,672,000;

14 ‘‘(2) for fiscal year 2000, $1,500,000,000;

15 ‘‘(3) for fiscal year 2001, $1,750,000,000;

16 ‘‘(4) for fiscal year 2002, $2,000,000,000;

17 ‘‘(5) for fiscal year 2003, $2,250,000,000; and

18 ‘‘(6) for fiscal year 2004, $2,500,000,000.’’.

19 SEC. 222. SMALL BUSINESS CHILD CARE GRANT PROGRAM.

20 (a) ESTABLISHMENT.—The Secretary of Health and

21 Human Services (in this section referred to as the ‘‘Sec22 retary’’) shall establish a program to award grants to

23 States to assist States in providing funds to encourage the

24 establishment and operation of employer operated child

25 care programs.
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1 (b) APPLICATION.—To be eligible to receive a grant

2 under this section, a State shall prepare and submit to

3 the Secretary an application at such time, in such manner,

4 and containing such information as the Secretary may re5 quire, including an assurance that the funds required

6 under subsection (e) will be provided.

7 (c) AMOUNT OF GRANT.—The Secretary shall deter8 mine the amount of a grant to a State under this section

9 based on the population of the State as compared to the

10 population of all States.

11 (d) USE OF FUNDS.—

12 (1) IN GENERAL.—A State shall use amounts

13 provided under a grant awarded under this section

14 to provide assistance to small businesses located in

15 the State to enable the small businesses to establish

16 and operate child care programs. Such assistance

17 may include—

18 (A) technical assistance in the establish19 ment of a child care program;

20 (B) assistance for the start up costs relat21 ed to a child care program;

22 (C) assistance for the training of child care

23 providers;

24 (D) scholarships for low-income wage earn25 ers;
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1 (E) the provision of services to care for

2 sick children or to provide care to school aged

3 children;

4 (F) the entering into of contracts with

5 local resource and referral or local health de6 partments;

7 (G) care for children with disabilities; or

8 (H) assistance for any other activity deter9 mined appropriate by the State.

10 (2) APPLICATION.—To be eligible to receive as11 sistance from a State under this section, a small

12 business shall prepare and submit to the State an

13 application at such time, in such manner, and con14 taining such information as the State may require.

15 (3) PREFERENCE.—

16 (A) IN GENERAL.—In providing assistance

17 under this section, a State shall give priority to

18 applicants that desire to form a consortium to

19 provide child care in geographic areas within

20 the State where such care is not generally avail21 able or accessible.

22 (B) CONSORTIUM.—For purposes of sub23 paragraph (A), a consortium shall be made up

24 of 2 or more entities which may include busi-
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1 nesses, nonprofit agencies or organizations,

2 local governments, or other appropriate entities.

3 (4) LIMITATION.—With respect to grant funds

4 received under this section, a State may not provide

5 in excess of $100,000 in assistance from such funds

6 to any single applicant.

7 (e) MATCHING REQUIREMENT.—To be eligible to re8 ceive a grant under this section a State shall provide as9 surances to the Secretary that, with respect to the costs

10 to be incurred by an entity receiving assistance in carrying

11 out activities under this section, the entity will make avail12 able (directly or through donations from public or private

13 entities) non-Federal contributions to such costs in an

14 amount equal to—

15 (1) for the first fiscal year in which the entity

16 receives such assistance, not less than 50 percent of

17 such costs ($1 for each $1 of assistance provided to

18 the entity under the grant);

19 (2) for the second fiscal year in which an entity

receives such assistance, not less than 662 20 ⁄3 percent

21 of such costs ($2 for each $1 of assistance provided

22 to the entity under the grant); and

23 (3) for the third fiscal year in which an entity

24 receives such assistance, not less than 75 percent of
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1 such costs ($3 for each $1 of assistance provided to

2 the entity under the grant).

3 (f) REQUIREMENTS OF PROVIDERS.—To be eligible

4 to receive assistance under a grant awarded under this

5 section a child care provider shall comply with all applica6 ble State and local licensing and regulatory requirements

7 and all applicable health and safety standards in effect

8 in the State.

9 (g) ADMINISTRATION.—

10 (1) STATE RESPONSIBILITY.—A State shall

11 have responsibility for administering the grant

12 awarded under this section and for monitoring enti13 ties that receive assistance under such grant.

14 (2) AUDITS.—A State shall require each entity

15 receiving assistance under a grant awarded under

16 this section to conduct an annual audit with respect

17 to the activities of the entity. Such audits shall be

18 submitted to the State.

19 (3) MISUSE OF FUNDS.—

20 (A) REPAYMENT.—If the State determines,

21 through an audit or otherwise, that an entity

22 receiving assistance under a grant awarded

23 under this section has misused the assistance,

24 the State shall notify the Secretary of the mis25 use. The Secretary, upon such a notification,
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1 may seek from such an entity the repayment of

2 an amount equal to the amount of any misused

3 assistance plus interest.

4 (B) APPEALS PROCESS.—The Secretary

5 shall by regulation provide for an appeals proc6 ess with respect to repayments under this para7 graph.

8 (h) REPORTING REQUIREMENTS.—

9 (1) 2-YEAR STUDY.—

10 (A) IN GENERAL.—Not later than 2 years

11 after the date on which the Secretary first pro12 vides grants under this section, the Secretary

13 shall conduct a study to determine—

14 (i) the capacity of entities to meet the

15 child care needs of communities within a

16 State;

17 (ii) the kinds of partnerships that are

18 being formed with respect to child care at

19 the local level; and

20 (iii) who is using the programs funded

21 under this section and the income levels of

22 such individuals.

23 (B) REPORT.—Not later than 28 months

24 after the date of enactment of this Act, the Sec25 retary shall prepare and submit to the appro-
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1 priate committees of Congress a report on the

2 results of the study conducted in accordance

3 with subparagraph (A).

4 (2) 4-YEAR STUDY.—

5 (A) IN GENERAL.—Not later than 4 years

6 after the date on which the Secretary first pro7 vides grants under this section, the Secretary

8 shall conduct a study to determine the number

9 of child care facilities funded through entities

10 that received assistance through a grant made

11 under this section that remain in operation and

12 the extent to which such facilities are meeting

13 the child care needs of the individuals served by

14 such facilities.

15 (B) REPORT.—Not later than 52 months

16 after the date of enactment of this Act, the Sec17 retary shall prepare and submit to the appro18 priate committees of Congress a report on the

19 results of the study conducted in accordance

20 with subparagraph (A).

21 (i) DEFINITION.—As used in this section, the term

22 ‘‘small business’’ means an employer who employed an av23 erage of at least 2 but not more than 50 employees on

24 business days during the preceding calendar year.
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1 (j) AUTHORIZATION OF APPROPRIATIONS.—There is

2 authorized to be appropriated to carry out this section,

3 $60,000,000 for the period of fiscal years 2000 through

4 2002. With respect to the total amount appropriated for

5 such period in accordance with this subsection, not more

6 than $5,000,000 of that amount may be used for expendi7 tures related to conducting evaluations required under,

8 and the administration of, this section.

9 (k) TERMINATION OF PROGRAM.—The program es10 tablished under subsection (a) shall terminate on Septem11 ber 30, 2003.

12 SEC. 223. GAO REPORT REGARDING THE RELATIONSHIP

13 BETWEEN LEGAL LIABILITY CONCERNS AND

14 THE AVAILABILITY AND AFFORDABILITY OF

15 CHILD CARE.

16 Not later than 6 months after the date of enactment

17 of this Act, the Comptroller General of the United States

18 shall report to Congress regarding whether and, if so, the

19 extent to which, concerns regarding potential legal liability

20 exposure inhibit the availability and affordability of child

21 care. The report shall include an assessment of whether

22 such concerns prevent—

23 (1) employers from establishing on or near-site

24 child care for their employees;
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1 (2) schools or community centers from allowing

2 their facilities to be used for on-site child care; and

3 (3) individuals from providing professional, li4 censed child care services in their homes.

5 Subtitle D—Quality Child Care

6 Through Federal Facilities and

7 Programs

8 SEC. 231. PROVIDING QUALITY CHILD CARE IN FEDERAL

9 FACILITIES.

10 (a) DEFINITIONS.—In this section:

11 (1) ADMINISTRATOR.—The term ‘‘Adminis12 trator’’ means the Administrator of General Serv13 ices.

14 (2) EXECUTIVE AGENCY.—The term ‘‘Executive

15 agency’’ has the meaning given the term in section

16 105 of title 5, United States Code, but does not in17 clude the Department of Defense.

18 (3) EXECUTIVE FACILITY.—The term ‘‘execu19 tive facility’’ means a facility that is owned or leased

20 by an Executive agency.

21 (4) FEDERAL AGENCY.—The term ‘‘Federal

22 agency’’ means an Executive agency, a judicial of23 fice, or a legislative office.
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1 (5) JUDICIAL FACILITY.—The term ‘‘judicial fa2 cility’’ means a facility that is owned or leased by a

3 judicial office.

4 (6) JUDICIAL OFFICE.—The term ‘‘judicial of5 fice’’ means an entity of the judicial branch of the

6 Federal Government.

7 (7) LEGISLATIVE FACILITY.—The term ‘‘legisla8 tive facility’’ means a facility that is owned or leased

9 by a legislative office.

10 (8) LEGISLATIVE OFFICE.—The term ‘‘legisla11 tive office’’ means an entity of the legislative branch

12 of the Federal Government.

13 (b) EXECUTIVE BRANCH STANDARDS AND ENFORCE14 MENT.—

15 (1) STATE AND LOCAL LICENSING REQUIRE16 MENTS.—

17 (A) IN GENERAL.—The Administrator

18 shall issue regulations requiring any entity op19 erating a child care center in an executive facil20 ity to comply with applicable State and local li21 censing requirements related to the provision of

22 child care.

23 (B) COMPLIANCE.—The regulations shall

24 require that, not later than 6 months after the

25 date of enactment of this Act—
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1 (i) the entity shall comply, or make

2 substantial progress (as determined by the

3 Administrator) toward complying, with the

4 requirements; and

5 (ii) any contract for the operation of

6 such a child care center shall include a

7 condition that the child care be provided in

8 accordance with the requirements.

9 (2) EVALUATION AND ENFORCEMENT.—The

10 Administrator shall evaluate the compliance of the

11 entities described in paragraph (1) with the regula12 tions issued under that paragraph. The Adminis13 trator may conduct the evaluation of such an entity

14 directly, or through an agreement with another Fed15 eral agency, other than the Federal agency for which

16 the entity is providing child care. If the Adminis17 trator determines, on the basis of such an evalua18 tion, that the entity is not in compliance with the

19 regulations, the Administrator shall notify the Exec20 utive agency.

21 (c) LEGISLATIVE BRANCH STANDARDS AND EN22 FORCEMENT.—

23 (1) STATE AND LOCAL LICENSING REQUIRE24 MENTS AND ACCREDITATION STANDARDS.—The Ar25 chitect of the Capitol shall issue regulations for enti-
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1 ties operating child care centers in legislative facili2 ties, which shall be the same as the regulations

3 issued by the Administrator under subsection (b)(1),

4 except to the extent that the Architect may deter5 mine, for good cause shown and stated together with

6 the regulations, that a modification of such regula7 tions would be more effective for the implementation

8 of the requirements and standards described in such

9 paragraphs.

10 (2) EVALUATION AND ENFORCEMENT.—Sub11 section (b)(2) shall apply to the Architect of the

12 Capitol, entities operating child care centers in legis13 lative facilities, and legislative offices. For purposes

14 of that application, references in subsection (b)(2) to

15 regulations shall be considered to be references to

16 regulations issued under this subsection.

17 (d) JUDICIAL BRANCH STANDARDS AND ENFORCE18 MENT.—

19 (1) STATE AND LOCAL LICENSING REQUIRE20 MENTS AND ACCREDITATION STANDARDS.—The Di21 rector of the Administrative Office of the United

22 States Courts shall issue regulations for entities op23 erating child care centers in judicial facilities, which

24 shall be the same as the regulations issued by the

25 Administrator under subsection (b)(1), except to the
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1 extent that the Director may determine, for good

2 cause shown and stated together with the regula3 tions, that a modification of such regulations would

4 be more effective for the implementation of the re5 quirements and standards described in such para6 graphs.

7 (2) EVALUATION AND ENFORCEMENT.—Sub8 section (b)(2) shall apply to the Director described

9 in paragraph (1), entities operating child care cen10 ters in judicial facilities, and judicial offices. For

11 purposes of that application, references in subsection

12 (b)(2) to regulations shall be considered to be ref13 erences to regulations issued under this subsection.

14 (e) APPLICATION.—Notwithstanding any other provi15 sion of this section, if 3 or more child care centers are

16 operated in facilities owned or leased by a Federal agency,

17 the head of the Federal agency may carry out the respon18 sibilities assigned to the Administrator under subsection

19 (b)(2), the Architect of the Capitol under subsection

20 (c)(2), or the Director described in subsection (d)(2)

21 under such subsection, as appropriate.

Æ