```

[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1610 Introduced in Senate (IS)]

105th CONGRESS
  2d Session
                                S. 1610

To increase the availability, affordability, and quality of child care.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            February 4, 1998

 Mr. Dodd (for himself, Mr. Daschle, Mr. Kennedy, Mr. Inouye, Mr. 
        Akaka, Mr. Biden, Mr. Bingaman, Mr. Dorgan, Mr. Durbin, Mrs. 
        Feinstein, Mr. Graham, Mr. Harkin, Mr. Kerrey, Ms. Landrieu, 
        Mr. Lautenberg, Mr. Levin, Ms. Mikulski, Ms. Moseley-Braun, 
        Mrs. Murray, Mr. Reed, Mr. Reid, Mr. Rockefeller, Mr. 
        Wellstone, Mr. Bumpers, Mrs. Boxer, and Mr. Kerry) introduced 
        the following bill; which was read twice and referred to the 
        Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To increase the availability, affordability, and quality of child care.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Child Care ACCESS 
(Affordable Child Care for Early Success and Security) Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
           TITLE I--IMPROVING THE AFFORDABILITY OF CHILD CARE

Sec. 101. Increased appropriations for child care grants.
   TITLE II--ENHANCING THE QUALITY OF CHILD CARE AND EARLY CHILDHOOD 
                              DEVELOPMENT

Sec. 201. Grants to improve the quality of child care and early 
                            childhood development.
 TITLE III--EXPANDING THE AVAILABILITY AND QUALITY OF SCHOOL-AGE CHILD 
                                  CARE

Sec. 301. Appropriations for after-school care.
Sec. 302. Amendments to the 21st Century Community Learning Centers 
                            Act.
           TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE

Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.
Sec. 404. Expansion of the Family and Medical Leave Act.
            TITLE V--ENCOURAGING PRIVATE SECTOR INVOLVEMENT

Sec. 501. Allowance of credit for employer expenses for child care 
                            assistance.
Sec. 502. Grants to support public-private partnerships.
      TITLE VI--ENSURING THE QUALITY OF FEDERAL CHILD CARE CENTERS

Sec. 601. Quality child care for Federal employees.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Each day an estimated 13,000,000 children spend some 
        part of their day in child care.
            (2) Fifty-four percent of mothers with children between the 
        ages of 0-3 are in the work force. Labor force participation 
        rises to 63 percent for mothers with children under the age of 
        6, and to 78 percent for mothers with children ages 6-17.
            (3) The availability of child care that is reliable, 
        convenient, and affordable helps parents to reach and maintain 
        self-sufficiency and is essential to making the transition from 
        welfare to work.
            (4) Only an estimated 1 out of 10 eligible families receive 
        assistance in paying for child care through the Child Care 
        Development Block Grant Act of 1990.
            (5) Full-day child care can cost $4,000 to $9,000 a year.
            (6) In many instances, high quality child care services 
        cost little more than mediocre services. An investment of only 
        an additional 10 percent has been found to have a significant 
        impact on quality.
            (7) Only 1 in 7 child care centers provides care that 
        promotes healthy development. Child care at 1 in 8 centers 
        actually threatens children's health and safety.
            (8) The education, training, and salary of a child care 
        provider make the difference between poor and good quality 
        child care.
                    (A) The average salary of a child care provider in 
                a center is only $12,058 a year, which is approximately 
                equal to the poverty level for a family of 3.
                    (B) Home-based providers earn $9,000 a year on 
                average.
            (9) Poor compensation and limited opportunities for 
        professional training and education contribute to high turnover 
        among child care providers, which disrupts the creation of 
        strong provider-child relationships that are critical to 
        children's healthy development.
            (10) Children placed in poor quality child care settings 
        have been found to have delayed language and reading skills, as 
        well as an increase in aggressive behavior toward other 
        children and adults.
            (11) Nearly 5,000,000 children are home alone after school 
        each week.
            (12) Although it is thought that juvenile crime occurs 
        mostly on evenings and weekends, juvenile crime actually peaks 
        between 3 and 6 p.m.
            (13) Eighth-graders left home alone after school report 
        greater use of cigarettes, alcohol, and marijuana than those in 
        adult-supervised settings.
            (14) The Family and Medical Leave Act of 1993 has provided 
        employees with a significant new tool in balancing the needs of 
        their families with the demands of work.
            (15) The number of single-parent households and two-parent 
        households in which the single parent or both parents work is 
        increasing significantly.
            (16) The Family and Medical Leave Act of 1993 has had a 
        minimal impact on business, and over 90 percent of private 
        employers covered by the Act experienced little or no cost and 
        a minimal or positive impact on productivity as a result of the 
        Act.
            (17) Only 57 percent of the private workforce is currently 
        protected by the Family and Medical Leave Act of 1993.
            (18) 13,000,000 more private employees, or an additional 14 
        percent of the private workforce, would be protected by the 
        Family and Medical Leave Act of 1993 if the Act was expanded to 
        cover private employers with 25 or more employees.

           TITLE I--IMPROVING THE AFFORDABILITY OF CHILD CARE

SEC. 101. INCREASED APPROPRIATIONS FOR CHILD CARE GRANTS.

    Section 418(a)(3) of the Social Security Act (42 U.S.C. 618(a)(3)) 
is amended by striking subparagraphs (C) through (F) and inserting the 
following:
                    ``(C) $3,167,000,000 for fiscal year 1999;
                    ``(D) $3,367,000,000 for fiscal year 2000;
                    ``(E) $4,067,000,000 for fiscal year 2001;
                    ``(F) $4,717,000,000 for fiscal year 2002; and
                    ``(G) $4,717,000,000 for fiscal year 2003.''.

   TITLE II--ENHANCING THE QUALITY OF CHILD CARE AND EARLY CHILDHOOD 
                              DEVELOPMENT

SEC. 201. GRANTS TO IMPROVE THE QUALITY OF CHILD CARE AND EARLY 
              CHILDHOOD DEVELOPMENT.

    Section 418 of the Social Security Act (42 U.S.C. 618) is amended 
by adding at the end the following:
    ``(e) Grants To Improve the Quality of Child Care and Early 
Childhood Development.--
            ``(1) Secretarial authority.--The Secretary shall use the 
        amounts appropriated under paragraph (2) to make grants to 
        States in accordance with this subsection.
            ``(2) Appropriation.--For grants under this section, there 
        are appropriated--
                    ``(A) $250,000,000 for fiscal year 1999;
                    ``(B) $400,000,000 for fiscal year 2000;
                    ``(C) $600,000,000 for fiscal year 2001;
                    ``(D) $750,000,000 for fiscal year 2002; and
                    ``(E) $1,000,000,000 for fiscal year 2003.
            ``(3) Allotments to states.--The amounts appropriated under 
        paragraph (2) for payments to States under this paragraph shall 
        be allotted among the States in the same manner as amounts 
        (including the redistribution of unused amounts) are allotted 
        or redistributed, as the case may be, under subsection (a)(2), 
        except that the matching requirement of subsection (a)(2)(C) 
        shall not apply to a grant made under this subsection.
            ``(4) Use of funds.--Funds received by a State through a 
        grant made under this subsection may be used for any of the 
        following:
                    ``(A) Bringing provider-child ratios up to 
                standards recommended by nationally recognized child 
                care accrediting bodies.
                    ``(B) Improving the enforcement of licensing 
                standards, including the use of unannounced inspections 
                of child care providers.
                    ``(C) Conducting background checks on child care 
                providers.
                    ``(D) Providing increased payment rates for child 
                care services for infants and for children with special 
                health care needs.
                    ``(E) Providing increased payment rates for child 
                care services offered by licensed or accredited 
                providers.
                    ``(F) Improving the compensation of child care 
                providers.
                    ``(G) Assisting child care providers in becoming 
                licensed or accredited.
                    ``(H) Expanding activities to educate parents on 
                the availability and quality of child care, including 
                the development and operation of resource and referral 
                systems.
                    ``(I) Creating support networks for family child 
                care providers.
                    ``(J) Establishing linkages between child care 
                services and health care services.
                    ``(K) Offering training and education to child care 
                providers, including offering scholarships and tax 
                credits to assist with the expenses of obtaining such 
                training and education.
                    ``(L) Providing family support and parent 
                education.
                    ``(M) Ensuring the availability and quality of 
                child care for children with special health care 
                needs.''.

 TITLE III--EXPANDING THE AVAILABILITY AND QUALITY OF SCHOOL-AGE CHILD 
                                  CARE

SEC. 301. APPROPRIATIONS FOR AFTER-SCHOOL CARE.

    (a) Grants.--Section 418 of the Social Security Act (42 U.S.C. 
618), as amended by section 201, is amended by adding at the end the 
following:
    ``(f) Grants To Increase the Availability and Quality of School-Age 
Child Care.--
            ``(1) Secretarial authority.--The Secretary shall use the 
        amounts appropriated under paragraph (2) to make grants to 
        States in accordance with this subsection.
            ``(2) Appropriation.--For grants under this section, there 
        are appropriated--
                    ``(A) $250,000,000 for fiscal year 1999;
                    ``(B) $400,000,000 for fiscal year 2000;
                    ``(C) $600,000,000 for fiscal year 2001;
                    ``(D) $750,000,000 for fiscal year 2002; and
                    ``(E) $1,000,000,000 for fiscal year 2003.
            ``(3) Allotments to states.--The amounts appropriated under 
        paragraph (2) for payments to States under this paragraph shall 
        be allotted among the States in the same manner as amounts 
        (including the redistribution of unused amounts) are allotted 
        or redistributed, as the case may be, under subsection (a)(2), 
        except that the matching requirement of subsection (a)(2)(C) 
        shall not apply to a grant made under this subsection.
            ``(4) Use of funds.--Funds received by a State through a 
        grant made under this subsection shall be used for the 
        provision of child care services before and after regular 
        school hours and during months in which schools are not in 
        session.''.
    (b) Definition of Eligible Child.--Section 658P(4)(A) of the Child 
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858n(4)(A)) is 
amended by striking ``13'' and inserting ``16''.

SEC. 302. AMENDMENTS TO THE 21ST CENTURY COMMUNITY LEARNING CENTERS 
              ACT.

    (a) Program Authorization.--Section 10903 of the 21st Century 
Community Learning Centers Act (20 U.S.C. 8243) is amended--
            (1) in subsection (a)--
                    (A) by striking ``rural and inner-city''; and
                    (B) by striking ``a rural or inner-city community'' 
                and inserting ``communities'';
            (2) in subsection (b), by striking ``, among urban and 
        rural areas of the United States, and among urban and rural 
        areas of a State'';
            (3) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (4) by inserting after subsection (b) the following:
    ``(c) Priority of Distribution.--In awarding grants under this 
part, the Secretary shall give priority to rural, urban, and low-income 
communities.''.
    (b) Application Requirements.--Section 10904 of the 21st Century 
Community Learning Centers Act (20 U.S.C. 8244) is amended--
            (1) in subsection (a)(3)(B), by inserting ``, including the 
        programs under the Child Care and Development Block Grant Act 
        of 1990, '' after ``coordinated''; and
            (2) in subsection (b), by striking ``a broad selection'' 
        and all that follows and inserting ``child care services before 
        or after regular school hours that include mentoring programs, 
        academic assistance, recreational activities, or technology 
        training, and that may include drug, alcohol, and gang 
        prevention, job skills preparation, or health and nutrition 
        counseling.''.
    (c) Uses of Funds.--Section 10905 of the 21st Century Community 
Learning Centers Act (20 U.S.C. 8245) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``not less than four'' and inserting ``any''; and
            (2) by striking paragraph (3) and inserting the following:
            ``(3) Child care services.''.
    (d) Authorization of Appropriations.--Section 10907 of the 21st 
Century Community Learning Centers Act (20 U.S.C. 8247) is amended by 
striking ``$20,000,000 for fiscal year 1995'' and inserting 
``$200,000,000 for fiscal year 1999''.

           TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE

SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.

    (a) Percentage of Employment-Related Expenses Determined by 
Taxpayer Status.--Section 21(a)(2) of the Internal Revenue Code of 1986 
(defining applicable percentage) is amended to read as follows:
            ``(2) Applicable percentage defined.--For purposes of 
        paragraph (1), the term `applicable percentage' means--
                    ``(A) except as provided in subparagraph (B), 50 
                percent reduced (but not below 20 percent) by 1 
                percentage point for each $1,000, or fraction thereof, 
                by which the taxpayers's adjusted gross income for the 
                taxable year exceeds $30,000, and
                    ``(B) in the case of employment-related expenses 
                described in subsection (e)(11), 50 percent reduced 
                (but not below zero) by 1 percentage point for each 
                $800, or fraction thereof, by which the taxpayers's 
                adjusted gross income for the taxable year exceeds 
                $30,000.''.
    (b) Inflation Adjustment for Allowable Expenses.--Section 21(c) of 
the Internal Revenue Code of 1986 (relating to dollar limit on amount 
creditable) is amended by striking ``The amount determined'' and 
inserting ``In the case of any taxable year beginning after 1998, each 
dollar amount referred to in paragraphs (1) and (2) shall be increased 
by an amount equal to such dollar amount multiplied by the cost-of-
living adjustment determined under section 1(f)(3) for the calendar 
year in which the taxable year begins, by substituting `calendar year 
1997' for `calendar year 1992' in subparagraph (B) thereof. If any 
dollar amount after being increased under the preceding sentence is not 
a multiple of $10, such dollar amount shall be rounded to the nearest 
multiple of $10. The amount determined''.
    (c) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1998.

SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.

    (a) In General.--Section 21(e) of the Internal Revenue Code of 1986 
(relating to special rules) is amended by adding at the end the 
following:
            ``(11) Minimum credit allowed for stay-at-home parents.--
        Notwithstanding subsection (d), in the case of any taxpayer 
        with one or more qualifying individuals described in subsection 
        (b)(1)(A) under the age of 1 at any time during the taxable 
        year, such taxpayer shall be deemed to have employment-related 
        expenses with respect to such qualifying individuals in an 
        amount equal to the sum of--
                    ``(A) $90 for each month in such taxable year 
                during which at least one of such qualifying 
                individuals is under the age of 1, and
                    ``(B) the amount of employment-related expenses 
                otherwise incurred for such qualifying individuals for 
                the taxable year (determined under this section without 
                regard to this paragraph).''.
    (b) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1998.

SEC. 403. CREDIT MADE REFUNDABLE.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits against tax) is 
amended--
            (1) by redesignating section 35 as section 36, and
            (2) by redesignating section 21 as section 35.
    (b) Advance Payment of Credit.--Chapter 25 of such Code (relating 
to general provisions relating to employment taxes) is amended by 
inserting after section 3507 the following:

``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

    ``(a) General Rule.--Except as otherwise provided in this section, 
every employer making payment of wages with respect to whom a dependent 
care eligibility certificate is in effect shall, at the time of paying 
such wages, make an additional payment equal to such employee's 
dependent care advance amount.
    ``(b) Dependent Care Eligibility Certificate.--For purposes of this 
title, a dependent care eligibility certificate is a statement 
furnished by an employee to the employer which--
            ``(1) certifies that the employee will be eligible to 
        receive the credit provided by section 35 for the taxable year,
            ``(2) certifies that the employee reasonably expects to be 
        an applicable taxpayer for the taxable year,
            ``(3) certifies that the employee does not have a dependent 
        care eligibility certificate in effect for the calendar year 
        with respect to the payment of wages by another employer,
            ``(4) states whether or not the employee's spouse has a 
        dependent care eligibility certificate in effect,
            ``(5) states the number of qualifying individuals in the 
        household maintained by the employee, and
            ``(6) estimates the amount of employment-related expenses 
        for the calendar year.
    ``(c) Dependent Care Advance Amount.--
            ``(1) In general.--For purposes of this title, the term 
        `dependent care advance amount' means, with respect to any 
        payroll period, the amount determined--
                    ``(A) on the basis of the employee's wages from the 
                employer for such period,
                    ``(B) on the basis of the employee's estimated 
                employment-related expenses included in the dependent 
                care eligibility certificate, and
                    ``(C) in accordance with tables provided by the 
                Secretary.
            ``(2) Advance amount tables.--The tables referred to in 
        paragraph (1)(C) shall be similar in form to the tables 
        prescribed under section 3402 and, to the maximum extent 
        feasible, shall be coordinated with such tables and the tables 
        prescribed under section 3507(c).
    ``(d) Other Rules.--For purposes of this section, rules similar to 
the rules of subsections (d) and (e) of section 3507 shall apply.
    ``(e) Definitions.--For purposes of this section, terms used in 
this section which are defined in section 35 shall have the respective 
meanings given such terms by section 35.''.
    (c) Conforming Amendments.--
            (1) Section 35(a)(1) of such Code, as redesignated by 
        paragraph (1), is amended by striking ``chapter'' and inserting 
        ``subtitle''.
            (2) Section 35(e) of such Code, as so redesignated and 
        amended by subsection (c), is amended by adding at the end the 
        following:
            ``(12) Coordination with advance payments and minimum 
        tax.--Rules similar to the rules of subsections (g) and (h) of 
        section 32 shall apply for purposes of this section.''.
            (3) Sections 23(f)(1) and 129(a)(2)(C) of such Code are 
        each amended by striking ``section 21(e)'' and inserting 
        ``section 35(e)''.
            (4) Section 129(b)(2) of such Code is amended by striking 
        ``section 21(d)(2)'' and inserting ``section 35(d)(2)''.
            (5) Section 129(e)(1) of such Code is amended by striking 
        ``section 21(b)(2)'' and inserting ``section 35(b)(2)''.
            (6) Section 213(e) of such Code is amended by striking 
        ``section 21'' and inserting ``section 35''.
            (7) Section 995(f)(2)(C) of such Code is amended by 
        striking ``and 34'' and inserting ``34, and 35''.
            (8) Section 6211(b)(4)(A) of such Code is amended by 
        striking ``and 34'' and inserting ``, 34, and 35''.
            (9) Section 6213(g)(2)(H) of such Code is amended by 
        striking ``section 21'' and inserting ``section 35''.
            (10) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 35 and inserting the following:

                              ``Sec. 35. Dependent care services.
                              ``Sec. 36. Overpayments of tax.''.
            (11) The table of sections for subpart A of such part IV is 
        amended by striking the item relating to section 21.
            (12) The table of sections for chapter 25 of such Code is 
        amended by adding after the item relating to section 3507 the 
        following:

                              ``Sec. 3507A. Advance payment of 
                                        dependent care credit.''.
            (13) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting before the period ``, or enacted by the 
        Child Care ACCESS (Affordable Child Care for Early Success and 
        Security) Act''.
    (d) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1998.

SEC. 404. EXPANSION OF THE FAMILY AND MEDICAL LEAVE ACT.

    Paragraphs (2)(B)(ii) and (4)(A)(i) of section 101 of the Family 
and Medical Leave Act of 1993 (29 U.S.C. 2611 (2)(B)(ii) and (4)(A)(i)) 
are amended by striking ``50'' each place it appears and inserting 
``25''.

            TITLE V--ENCOURAGING PRIVATE SECTOR INVOLVEMENT

SEC. 501. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE 
              ASSISTANCE.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, the 
employer-provided child care credit determined under this section for 
the taxable year is an amount equal to 25 percent of the qualified 
child care expenditures of the taxpayer for such taxable year.
    ``(b) Dollar Limitation.--The credit allowable under subsection (a) 
for any taxable year shall not exceed $150,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care expenditure.--
                    ``(A) In general.--The term `qualified child care 
                expenditure' means any amount paid or incurred--
                            ``(i) to acquire, construct, rehabilitate, 
                        or expand property--
                                    ``(I) which is to be used as part 
                                of a qualified child care facility of 
                                the taxpayer,
                                    ``(II) with respect to which a 
                                deduction for depreciation (or 
                                amortization in lieu of depreciation) 
                                is allowable, and
                                    ``(III) which does not constitute 
                                part of the principal residence (within 
                                the meaning of section 1034) of the 
                                taxpayer or any employee of the 
                                taxpayer,
                            ``(ii) for the operating costs of a 
                        qualified child care facility of the taxpayer, 
                        including costs related to the training of 
                        employees of the child care facility, to 
                        scholarship programs, to the providing of 
                        differential compensation to employees based on 
                        level of child care training, and to expenses 
                        associated with achieving accreditation,
                            ``(iii) under a contract with a qualified 
                        child care facility to provide child care 
                        services to employees of the taxpayer, or
                            ``(iv) under a contract to provide child 
                        care resource and referral services to 
                        employees of the taxpayer.
                    ``(B) Exclusion for amounts funded by grants, 
                etc.--The term `qualified child care expenditure' shall 
                not include any amount to the extent such amount is 
                funded by any grant, contract, or otherwise by another 
                person (or any governmental entity).
                    ``(C) Limitation on allowable operating costs.--The 
                term `qualified child care expenditure' shall not 
                include any amount described in subparagraph (A)(ii) if 
                such amount is paid or incurred after the third taxable 
                year in which a credit under this section is taken by 
                the taxpayer, unless the qualified child care facility 
                of the taxpayer has received accreditation from a 
                nationally recognized accrediting body before the end 
                of such third taxable year.
            ``(2) Qualified child care facility.--
                    ``(A) In general.--The term `qualified child care 
                facility' means a facility--
                            ``(i) the principal use of which is to 
                        provide child care assistance, and
                            ``(ii) which meets the requirements of all 
                        applicable laws and regulations of the State or 
                        local government in which it is located, 
                        including, but not limited to, the licensing of 
                        the facility as a child care facility.
                Clause (i) shall not apply to a facility which is the 
                principal residence (within the meaning of section 
                1034) of the operator of the facility.
                    ``(B) Special rules with respect to a taxpayer.--A 
                facility shall not be treated as a qualified child care 
                facility with respect to a taxpayer unless--
                            ``(i) enrollment in the facility is open to 
                        employees of the taxpayer during the taxable 
                        year,
                            ``(ii) the facility is not the principal 
                        trade or business of the taxpayer unless at 
                        least 30 percent of the enrollees of such 
                        facility are dependents of employees of the 
                        taxpayer, and
                            ``(iii) the costs to employees of child 
                        care services at such facility are determined 
                        on a sliding fee scale.
    ``(d) Recapture of Acquisition and Construction Credit.--
            ``(1) In general.--If, as of the close of any taxable year, 
        there is a recapture event with respect to any qualified child 
        care facility of the taxpayer, then the tax of the taxpayer 
        under this chapter for such taxable year shall be increased by 
        an amount equal to the product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified child care 
                expenditures of the taxpayer described in subsection 
                (c)(1)(A) with respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture 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.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified child care facility is placed in 
                service by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Cessation of operation.--The cessation of the 
                operation of the facility as a qualified child care 
                facility.
                    ``(B) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a taxpayer's 
                        interest in a qualified child care facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under subpart A, B, or D of this 
                part.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility as a 
                qualified child care facility by reason of a casualty 
                loss to the extent such loss is restored by 
                reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons which are treated as 
        a single employer under subsections (a) and (b) of section 52 
        shall be treated as a single taxpayer.
            ``(2) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(3) Allocation in the case of partnerships.--In the case 
        of partnerships, the credit shall be allocated among partners 
        under regulations prescribed by the Secretary.
    ``(f) No Double Benefit.--
            ``(1) Reduction in basis.--For purposes of this subtitle--
                    ``(A) In general.--If a credit is determined under 
                this section with respect to any property by reason of 
                expenditures described in subsection (c)(1)(A), the 
                basis of such property shall be reduced by the amount 
                of the credit so determined.
                    ``(B) Certain dispositions.--If during any taxable 
                year there is a recapture amount determined with 
                respect to any property the basis of which was reduced 
                under subparagraph (A), the basis of such property 
                (immediately before the event resulting in such 
                recapture) shall be increased by an amount equal to 
                such recapture amount. For purposes of the preceding 
                sentence, the term `recapture amount' means any 
                increase in tax (or adjustment in carrybacks or 
                carryovers) determined under subsection (d).
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended--
                    (A) by striking out ``plus'' at the end of 
                paragraph (11),
                    (B) by striking out the period at the end of 
                paragraph (12), and inserting a comma and ``plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(13) the employer-provided child care credit determined 
        under section 45D.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 45D. Employer-provided child care 
                                        credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 502. GRANTS TO SUPPORT PUBLIC-PRIVATE PARTNERSHIPS.

    (a) Establishment.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall establish a 
program to award grants to local communities for the purpose of 
expanding the availability of, and improving the quality of, child care 
on a community-wide basis.
    (b) Application.--To be eligible to receive a grant under this 
section, a local community shall prepare and submit to the Secretary an 
application at such time and in such manner as the Secretary may 
require, and that includes--
            (1) an assurance that the matching funds required under 
        subsection (c) will be provided;
            (2) evidence of collaboration with parents, schools, 
        employers, State and local government agencies, and child care 
        agencies, including resource and referral agencies, in the 
        preparation of the application;
            (3) an assessment of child care resources and needs within 
        the community; and
            (4) any additional information that the Secretary may 
        require.
    (c) Matching Requirement.--To be eligible to receive a grant under 
this section a local community shall provide assurances to the 
Secretary that the community will provide matching funds in the amount 
of $1 for every $2 provided under the grant. Such funds shall be 
generated from private sources, including employers and philanthropic 
organizations.
    (d) Use of Funds.--A local community shall use the funds provided 
under a grant awarded under this section only for the purposes 
described in subsection (a).
    (e) Administration.--A local community awarded a grant under this 
section may authorize a public or nonprofit entity within the community 
to act as the fiscal agent for the administration of the program funded 
under the grant.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $250,000,000 for each of fiscal 
years 1999 through 2003.

      TITLE VI--ENSURING THE QUALITY OF FEDERAL CHILD CARE CENTERS

SEC. 601. QUALITY CHILD CARE FOR FEDERAL EMPLOYEES.

    (a) Definitions.--In this section:
            (1) Accredited child care center.--The term ``accredited 
        child care center'' means--
                    (A) a center that is accredited, by a child care 
                credentialing or accreditation entity recognized by a 
                State, to provide child care to children in the State 
                (except children who a tribal organization elects to 
                serve through a center described in subparagraph (B));
                    (B) a center that is accredited, by a child care 
                credentialing or accreditation entity recognized by a 
                tribal organization, to provide child care for children 
                served by the tribal organization;
                    (C) a center that is used as a Head Start center 
                under the Head Start Act (42 U.S.C. 9831 et seq.) and 
                is in compliance with any applicable performance 
                standards established by regulation under such Act for 
                Head Start programs; or
                    (D) a military child development center (as defined 
                in section 1798(1) of title 10, United States Code).
            (2) Child care credentialing or accreditation entity.--The 
        term ``child care credentialing or accreditation entity'' means 
        a nonprofit private organization or public agency that--
                    (A) is recognized by a State agency or tribal 
                organization; and
                    (B) accredits a center or credentials an individual 
                to provide child care on the basis of--
                            (i) an accreditation or credentialing 
                        instrument based on peer-validated research;
                            (ii) compliance with applicable State and 
                        local licensing requirements, or standards 
                        described in section 658E(c)(2)(E)(ii) of the 
                        Child Care and Development Block Grant Act (42 
                        U.S.C. 9858c(c)(2)(E)(ii)), as appropriate, for 
                        the center or individual;
                            (iii) outside monitoring of the center or 
                        individual; and
                            (iv) criteria that provide assurances of--
                                    (I) compliance with age-appropriate 
                                health and safety standards at the 
                                center or by the individual;
                                    (II) use of age-appropriate 
                                developmental and educational 
                                activities, as an integral part of the 
                                child care program carried out at the 
                                center or by the individual; and
                                    (III) use of ongoing staff 
                                development or training activities for 
                                the staff of the center or the 
                                individual, including related skills-
                                based testing.
            (3) Credentialed child care professional.--The term 
        ``credentialed child care professional'' means--
                    (A) an individual who is credentialed, by a child 
                care credentialing or accreditation entity recognized 
                by a State, to provide child care to children in the 
                State (except children who a tribal organization elects 
                to serve through an individual described in 
                subparagraph (B)); or
                    (B) an individual who is credentialed, by a child 
                care credentialing or accreditation entity recognized 
                by a tribal organization, to provide child care for 
                children served by the tribal organization.
            (4) State.--The term ``State'' has the meaning given the 
        term in section 658P of the Child Care and Development Block 
        Grant Act (42 U.S.C. 9858n).
    (b) Providing Quality Child Care in Federal Facilities.--
            (1) Definitions.--In this subsection:
                    (A) Administrator.--The term ``Administrator'' 
                means the Administrator of General Services.
                    (B) Entity sponsoring a child care center.--The 
                term ``entity sponsoring a child care center'' means a 
                Federal agency that operates, or an entity that enters 
                into a contract or licensing agreement with a Federal 
                agency to operate, a child care center.
                    (C) Executive agency.--The term ``Executive 
                agency'' has the meaning given the term in section 105 
                of title 5, United States Code, except that the term--
                            (i) does not include the Department of 
                        Defense; and
                            (ii) includes the General Services 
                        Administration, with respect to the 
                        administration of a facility described in 
                        subparagraph (D)(ii).
                    (D) Executive facility.--The term ``executive 
                facility''--
                            (i) means a facility that is owned or 
                        leased by an Executive agency; and
                            (ii) includes a facility that is owned or 
                        leased by the General Services Administration 
                        on behalf of a judicial office.
                    (E) Federal agency.--The term ``Federal agency'' 
                means an Executive agency, a judicial office, or a 
                legislative office.
                    (F) Judicial facility.--The term ``judicial 
                facility'' means a facility that is owned or leased by 
                a judicial office (other than a facility that is also a 
                facility described in subparagraph (D)(ii)).
                    (G) Judicial office.--The term ``judicial office'' 
                means an entity of the judicial branch of the Federal 
                Government.
                    (H) Legislative facility.--The term ``legislative 
                facility'' means a facility that is owned or leased by 
                a legislative office.
                    (I) Legislative office.--The term ``legislative 
                office'' means an entity of the legislative branch of 
                the Federal Government.
            (2) Executive branch standards and compliance.--
                    (A) State and local licensing requirements.--
                            (i) In general.--Any entity sponsoring a 
                        child care center in an executive facility 
                        shall--
                                    (I) obtain the appropriate State 
                                and local licenses for the center; and
                                    (II) in a location where the State 
                                or locality does not license executive 
                                facilities, comply with the appropriate 
                                State and local licensing requirements 
                                related to the provision of child care.
                            (ii) Compliance.--Not later than 6 months 
                        after the date of enactment of this Act--
                                    (I) the entity shall comply, or 
                                make substantial progress (as 
                                determined by the Administrator) toward 
                                complying, with clause (i); and
                                    (II) any contract or licensing 
                                agreement used by an Executive agency 
                                for the operation of such a child care 
                                center shall include a condition that 
                                the child care be provided by an entity 
                                that complies with the appropriate 
                                State and local licensing requirements 
                                related to the provision of child care.
                    (B) Health, safety, and facility standards.--The 
                Administrator shall by regulation establish standards 
                relating to health, safety, facilities, facility 
                design, and other aspects of child care that the 
                Administrator determines to be appropriate for child 
                care centers in executive facilities, and require child 
                care centers, and entities sponsoring child care 
                centers, in executive facilities to comply with the 
                standards.
                    (C) Accreditation standards.--
                            (i) In general.--The Administrator shall 
                        issue regulations requiring, to the maximum 
                        extent possible, any entity sponsoring an 
                        eligible child care center (as defined by the 
                        Administrator) in an executive facility to 
                        comply with child care center accreditation 
                        standards issued by a nationally recognized 
                        accreditation organization approved by the 
                        Administrator.
                            (ii) Compliance.--The regulations shall 
                        require that, not later than 5 years after the 
                        date of enactment of this Act--
                                    (I) the entity shall comply, or 
                                make substantial progress (as 
                                determined by the Administrator) toward 
                                complying, with the standards; and
                                    (II) any contract or licensing 
                                agreement used by an Executive agency 
                                for the operation of such a child care 
                                center shall include a condition that 
                                the child care be provided by an entity 
                                that complies with the standards.
                            (iii) Contents.--The standards shall base 
                        accreditation on--
                                    (I) an accreditation instrument 
                                described in subsection (a)(2)(B);
                                    (II) outside monitoring described 
                                in subsection (a)(2)(B), by--
                                            (aa) the Administrator; or
                                            (bb) a child care 
                                        credentialing or accreditation 
                                        entity, or other entity, with 
                                        which the Administrator enters 
                                        into a contract to provide such 
                                        monitoring; and
                                    (III) the criteria described in 
                                subsection (a)(2)(B).
                    (D) Evaluation and compliance.--
                            (i) In general.--The Administrator shall 
                        evaluate the compliance, with the requirements 
                        of subparagraph (A) and the regulations issued 
                        pursuant to subparagraphs (B) and (C), of child 
                        care centers, and entities sponsoring child 
                        care centers, in executive facilities. The 
                        Administrator may conduct the evaluation of 
                        such a child care center or entity directly, or 
                        through an agreement with another Federal 
                        agency or private entity, other than the 
                        Federal agency for which the child care center 
                        is providing services. If the Administrator 
                        determines, on the basis of such an evaluation, 
                        that the child care center or entity is not in 
                        compliance with the requirements, the 
                        Administrator shall notify the Executive 
                        agency.
                            (ii) Effect of noncompliance.--On receipt 
                        of the notification of noncompliance issued by 
                        the Administrator, the head of the Executive 
                        agency shall--
                                    (I) if the entity operating the 
                                child care center is the agency--
                                            (aa) within 2 business days 
                                        after the date of receipt of 
                                        the notification, correct any 
                                        deficiencies that are 
                                        determined by the Administrator 
                                        to be life threatening or to 
                                        present a risk of serious 
                                        bodily harm;
                                            (bb) develop and provide to 
                                        the Administrator a plan to 
                                        correct any other deficiencies 
                                        in the operation of the center 
                                        and bring the center and entity 
                                        into compliance with the 
                                        requirements not later than 4 
                                        months after the date of 
                                        receipt of the notification;
                                            (cc) provide the parents of 
                                        the children receiving child 
                                        care services at the center 
                                        with a notification detailing 
                                        the deficiencies described in 
                                        items (aa) and (bb) and actions 
                                        that will be taken to correct 
                                        the deficiencies;
                                            (dd) bring the center and 
                                        entity into compliance with the 
                                        requirements and certify to the 
                                        Administrator that the center 
                                        and entity are in compliance, 
                                        based on an onsite evaluation 
                                        of the center conducted by an 
                                        independent entity with 
                                        expertise in child care health 
                                        and safety; and
                                            (ee) in the event that 
                                        deficiencies determined by the 
                                        Administrator to be life 
                                        threatening or to present a 
                                        risk of serious bodily harm 
                                        cannot be corrected within 2 
                                        business days after the date of 
                                        receipt of the notification, 
                                        close the center or portion of 
                                        the center where the deficiency 
                                        was identified until such 
                                        deficiencies are corrected and 
                                        notify the Administrator of 
                                        such closure; and
                                    (II) if the entity operating the 
                                child care center is a contractor or 
                                licensee of the Executive agency--
                                            (aa) require the contractor 
                                        or licensee within 2 business 
                                        days after the date of receipt 
                                        of the notification, to correct 
                                        any deficiencies that are 
                                        determined by the Administrator 
                                        to be life threatening or to 
                                        present a risk of serious 
                                        bodily harm:
                                            (bb) require the contractor 
                                        or licensee to develop and 
                                        provide to the head of the 
                                        agency a plan to correct any 
                                        other deficiencies in the 
                                        operation of the center and 
                                        bring the center and entity 
                                        into compliance with the 
                                        requirements not later than 4 
                                        months after the date of 
                                        receipt of the notification;
                                            (cc) require the contractor 
                                        or licensee to provide the 
                                        parents of the children 
                                        receiving child care services 
                                        at the center with a 
                                        notification detailing the 
                                        deficiencies described in items 
                                        (aa) and (bb) and actions that 
                                        will be taken to correct the 
                                        deficiencies;
                                            (dd) require the contractor 
                                        or licensee to bring the center 
                                        and entity into compliance with 
                                        the requirements and certify to 
                                        the head of the agency that the 
                                        center and entity are in 
                                        compliance, based on an onsite 
                                        evaluation of the center 
                                        conducted by an independent 
                                        entity with expertise in child 
                                        care health and safety; and
                                            (ee) in the event that 
                                        deficiencies determined by the 
                                        Administrator to be life 
                                        threatening or to present a 
                                        risk of serious bodily harm 
                                        cannot be corrected within 2 
                                        business days after the date of 
                                        receipt of the notification, 
                                        close the center or portion of 
                                        the center where the deficiency 
                                        was identified until such 
                                        deficiencies are corrected and 
                                        notify the Administrator of 
                                        such closure, which closure 
                                        shall be grounds for the 
                                        immediate termination or 
                                        suspension of the contract or 
                                        license of the contractor or 
                                        licensee.
                            (iii) Cost reimbursement.--The Executive 
                        agency shall reimburse the Administrator for 
                        the costs of carrying out clause (i) for child 
                        care centers located in an executive facility 
                        other than an executive facility of the General 
                        Services Administration. If an entity is 
                        sponsoring a child care center for 2 or more 
                        Executive agencies, the Administrator shall 
                        allocate the costs of providing such 
                        reimbursement with respect to the entity among 
                        the agencies in a fair and equitable manner, 
                        based on the extent to which each agency is 
                        eligible to place children in the center.
            (3) Legislative branch standards and compliance.--
                    (A) State and local licensing requirements, health, 
                safety, and facility standards, and accreditation 
                standards.--The Architect of the Capitol shall issue 
                regulations approved by the Committee on Rules and 
                Administration of the Senate and the Committee on House 
                Oversight of the House of Representatives for child 
                care centers, and entities sponsoring child care 
                centers, in legislative facilities, which shall be no 
                less stringent in content and effect than the 
                requirements of paragraph (2)(A) and the regulations 
                issued by the Administrator under subparagraphs (B) and 
                (C) of paragraph (2), except to the extent that the 
                Architect with the consent and approval of the 
                Committee on Rules and Administration of the Senate and 
                the Committee on House Oversight of the House of 
                Representatives, may determine, for good cause shown 
                and stated together with the regulations, that a 
                modification of such regulations would be more 
                effective for the implementation of the requirements 
                and standards described in subparagraphs (A), (B), and 
                (C) of paragraph (2) for child care centers, and 
                entities sponsoring child care centers, in legislative 
                facilities.
                    (B) Evaluation and compliance.--
                            (i) Architect of the capitol.--The 
                        Architect of the Capitol shall have the same 
                        authorities and duties with respect to the 
                        evaluation of, compliance of, and cost 
                        reimbursement for child care centers, and 
                        entities sponsoring child care centers, in 
                        legislative facilities as the Administrator has 
                        under paragraph (2)(D) with respect to the 
                        evaluation of, compliance of, and cost 
                        reimbursement for such centers and entities 
                        sponsoring such centers, in executive 
                        facilities.
                            (ii) Head of a legislative office.--The 
                        head of a legislative office shall have the 
                        same authorities and duties with respect to the 
                        compliance of and cost reimbursement for child 
                        care centers, and entities sponsoring child 
                        care centers, in legislative facilities as the 
                        head of an Executive agency has under paragraph 
                        (2)(D) with respect to the compliance of and 
                        cost reimbursement for such centers and 
                        entities sponsoring such centers, in executive 
                        facilities.
            (4) Judicial branch standards and compliance.--
                    (A) State and local licensing requirements, health, 
                safety, and facility standards, and accreditation 
                standards.--The Director of the Administrative Office 
                of the United States Courts shall issue regulations for 
                child care centers, and entities sponsoring child care 
                centers, in judicial facilities, which shall be no less 
                stringent in content and effect than the requirements 
                of paragraph (2)(A) and the regulations issued by the 
                Administrator under subparagraphs (B) and (C) of 
                paragraph (2), except to the extent that the Director 
                may determine, for good cause shown and stated together 
                with the regulations, that a modification of such 
                regulations would be more effective for the 
                implementation of the requirements and standards 
                described in subparagraphs (A), (B), and (C) of 
                paragraph (2) for child care centers, and entities 
                sponsoring child care centers, in judicial facilities.
                    (B) Evaluation and compliance.--
                            (i) Director of the administrative office 
                        of the united states courts.--The Director of 
                        the Administrative Office of the United States 
                        Courts shall have the same authorities and 
                        duties with respect to the evaluation of, 
                        compliance of, and cost reimbursement for child 
                        care centers, and entities sponsoring child 
                        care centers, in judicial facilities as the 
                        Administrator has under paragraph (2)(D) with 
                        respect to the evaluation of, compliance of, 
                        and cost reimbursement for such centers and 
                        entities sponsoring such centers, in executive 
                        facilities.
                            (ii) Head of a judicial office.--The head 
                        of a judicial office shall have the same 
                        authorities and duties with respect to the 
                        compliance of and cost reimbursement for child 
                        care centers, and entities sponsoring child 
                        care centers, in judicial facilities as the 
                        head of an Executive agency has under paragraph 
                        (2)(D) with respect to the compliance of and 
                        cost reimbursement for such centers and 
                        entities sponsoring such centers, in executive 
                        facilities.
            (5) Application.--Notwithstanding any other provision of 
        this section, if 8 or more child care centers are sponsored in 
        facilities owned or leased by an Executive agency, the 
        Administrator shall delegate to the head of the agency the 
        evaluation and compliance responsibilities assigned to the 
        Administrator under paragraph (2)(D)(i).
            (6) Technical assistance, studies, and reviews.--The 
        Administrator may provide technical assistance, and conduct and 
        provide the results of studies and reviews, for Executive 
        agencies, and entities sponsoring child care centers in 
        executive facilities, on a reimbursable basis, in order to 
        assist the entities in complying with this section. The 
        Architect of the Capitol and the Director of the Administrative 
        Office of the United States Courts may provide technical 
        assistance, and conduct and provide the results of studies and 
        reviews, or request that the Administrator provide technical 
        assistance, and conduct and provide the results of studies and 
        reviews, for legislative offices and judicial offices, 
        respectively, and entities operating child care centers in 
        legislative facilities and judicial facilities, respectively, 
        on a reimbursable basis, in order to assist the entities in 
        complying with this section.
            (7) Council.--The Administrator shall establish an 
        interagency council, comprised of all Executive agencies 
        described in paragraph (5), a representative of the Office of 
        Architect of the Capitol, and a representative of the 
        Administrative Office of the United States Courts, to 
        facilitate cooperation and sharing of best practices, and to 
        develop and coordinate policy, regarding the provision of child 
        care in the Federal Government.
            (8) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $900,000 for 
        fiscal year 1999 and such sums as may be necessary for each 
        subsequent fiscal year.
                                 <all>
```