I

106TH CONGRESS

1ST SESSION H. R. 143

To amend the Internal Revenue Code of 1986 to establish incentives to

increase the demand for and supply of quality child care, to provide

incentives to States that improve the quality of child care, to expand

clearinghouses and electronic networks for the distribution of child care

information, to improve the quality of child care provided through Federal facilities and programs, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 6, 1999

Mr. GILMAN (for himself and Mrs. KELLY) introduced the following bill; which

was referred to the Committee on Ways and Means, and in addition to

the Committees on Government Reform, Education and the Workforce,

and Banking and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to establish

incentives to increase the demand for and supply of

quality child care, to provide incentives to States that

improve the quality of child care, to expand clearinghouses and electronic networks for the distribution of

child care information, to improve the quality of child

care provided through Federal facilities and programs,

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,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Creating Improved Delivery of Child Care: Affordable,

4 Reliable, and Educational Act’’ or as the ‘‘CIDCARE

5 Act’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

TITLE I—DEMAND FOR QUALITY CHILD CARE

Sec. 101. Expansion of dependent care tax credit.

Sec. 102. Expansion of dependent care assistance program.

Sec. 103. Inclusion of child care costs in child support orders.

TITLE II—SUPPLY OF QUALITY CHILD CARE

Subtitle A—Tax Benefits for Quality Child Care

Sec. 201. Allowance of credit for employer expenses for child care assistance.

Sec. 202. Charitable contributions of scientific equipment to accredited and

credentialed child care providers and to elementary and secondary schools.

Sec. 203. 2-percent floor on miscellaneous itemized deductions not applicable to

accreditation and credentialing expenses of child care providers.

Sec. 204. Expansion of home office deduction to include use of office for dependent care.

Subtitle B—Child Care Quality Improvement Incentive Program

Sec. 211. Definitions.

Sec. 212. Establishment of State program.

Sec. 213. State eligibility and application requirements.

Sec. 214. Use of funds by States.

Sec. 215. Authorization of appropriations.

Subtitle C—Distribution of Information About Quality Child Care

Sec. 221. Expansion of role of the Department of Health and Human Services

in the collection and dissemination of information and technology.

Sec. 222. Child care training infrastructure.

Sec. 223. Child care training revolving fund.

Subtitle D—Quality Child Care Through Federal Facilities and Programs

Sec. 233. Use of community development block grants to establish accredited

child care centers.
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Subtitle E—Miscellaneous Provisions

Sec. 241. Student loan repayment and cancellation for child care workers.

Sec. 242. Expansion of coordinated enforcement efforts of Internal Revenue

Service and HHS Office of Child Support Enforcement.

1 SEC. 2. DEFINITIONS.

2 In this Act:

3 (1) ACCREDITED CHILD CARE CENTER.—The

4 term ‘‘accredited child care center’’ means—

5 (A) a center that is accredited, by a child

6 care credentialing or accreditation entity recog7 nized by a State, to provide child care to chil8 dren in the State (except children who a tribal

9 organization elects to serve through a center de10 scribed in subparagraph (B));

11 (B) a center that is accredited, by a child

12 care credentialing or accreditation entity recog13 nized by a tribal organization, to provide child

14 care for children served by the tribal organiza15 tion;

16 (C) a center that is used as a Head Start

17 center under the Head Start Act (42 U.S.C.

18 9831 et seq.) and is in compliance with any ap19 plicable performance standards established by

20 regulation under such Act for Head Start pro21 grams; or
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1 (D) a military child development center (as

2 defined in section 1798(1) of title 10, United

3 States Code).

4 (2) CHILD CARE CREDENTIALING OR ACCREDI5 TATION ENTITY.—The term ‘‘child care credentialing

6 or accreditation entity’’ means a nonprofit private

7 organization or public agency that—

8 (A) is recognized by a State agency or trib9 al organization; and

10 (B) accredits a center or credentials an in11 dividual to provide child care on the basis of—

12 (i) an accreditation or credentialing

13 instrument based on peer-validated re14 search;

15 (ii) compliance with applicable State

16 and local licensing requirements, or stand17 ards described in section 658E(c)(2)(E)(ii)

18 of the Child Care and Development Block

19 Grant Act (42 U.S.C. 9858c(c)(2)(E)(ii)),

20 as appropriate, for the center or individual;

21 (iii) outside monitoring of the center

22 or individual; and

23 (iv) criteria that provide assurances

24 of—
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1 (I) compliance with age-appro2 priate health and safety standards at

3 the center or by the individual;

4 (II) use of age-appropriate devel5 opmental and educational activities, as

6 an integral part of the child care pro7 gram carried out at the center or by

8 the individual; and

9 (III) use of ongoing staff devel10 opment or training activities for the

11 staff of the center or the individual,

12 including related skills-based testing.

13 (3) CREDENTIALED CHILD CARE PROFES14 SIONAL.—The term ‘‘credentialed child care profes15 sional’’ means—

16 (A) an individual who is credentialed, by a

17 child care credentialing or accreditation entity

18 recognized by a State, to provide child care to

19 children in the State (except children who a

20 tribal organization elects to serve through an

21 individual described in subparagraph (B)); or

22 (B) an individual who is credentialed, by a

23 child care credentialing or accreditation entity

24 recognized by a tribal organization, to provide
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1 child care for children served by the tribal orga2 nization.

3 (4) STATE; TRIBAL ORGANIZATION.—The terms

4 ‘‘State’’ and ‘‘tribal organization’’ have the meaning

5 given the term in section 658P of the Child Care

6 and Development Block Grant Act (42 U.S.C.

7 9858n).

8 TITLE I—DEMAND FOR QUALITY

9 CHILD CARE

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

11 (a) PERCENTAGE OF EMPLOYMENT-RELATED EX12 PENSES DETERMINED BY STATUS OF CARE GIVER.—Sec13 tion 21(a)(2) of the Internal Revenue Code of 1986 (defin14 ing applicable percentage) is amended to read as follows:

15 ‘‘(2) APPLICABLE PERCENTAGE DEFINED.—

16 ‘‘(A) IN GENERAL.—For purposes of para17 graph (1), the term ‘applicable percentage’

18 means—

19 ‘‘(i) in the case of employment-related

20 expenses described in subsection

21 (b)(2)(A)(ii) incurred for the care of a

22 qualifying individual described in sub23 section (b)(1)(A) by an accredited child

24 care center or a credentialed child care

25 professional, the initial percentage reduced
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1 (but not below 12.5 percent) ratably for

2 each $2,500 (or fraction thereof) by which

3 the taxpayers’s adjusted gross income for

4 the taxable year exceeds $20,000, and

5 ‘‘(ii) in any other case, 30 percent re6 duced (but not below 10 percent) ratably

7 for each $2,500 (or fraction thereof) by

8 which the taxpayers’s adjusted gross in9 come for the taxable year exceeds $20,000

10 but does not exceed $70,000.

11 ‘‘(B) INITIAL PERCENTAGE FOR EXPENSES

12 INCURRED FOR ACCREDITED OR

13 CREDENTIALED PROVIDERS.—For purposes of

14 subparagraph (A)(i), the initial percentage shall

15 be determined in accordance with the following

16 table:

‘‘In the case of any taxable

year beginning in—

The initial percentage is—

1998 ......................................................................................... 31.5

1999 ......................................................................................... 33

2000 ......................................................................................... 34.5

2001 ......................................................................................... 36

2002 and thereafter ................................................................. 37.5.’’

17 (b) DEFINITIONS.—Section 21(b)(2) of the Internal

18 Revenue Code of 1986 (relating to definitions of qualifying

19 individual and employment-related expenses) is amended

20 by adding at the end the following:

21 ‘‘(E) ACCREDITED CHILD CARE CENTER.—

22 The term ‘accredited child care center’ means—
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1 ‘‘(i) a center that is accredited, by a

2 child care credentialing or accreditation en3 tity recognized by a State, to provide child

4 care to children in the State (except chil5 dren who a tribal organization elects to

6 serve through a center described in clause

7 (ii));

8 ‘‘(ii) a center that is accredited, by a

9 child care credentialing or accreditation en10 tity recognized by a tribal organization, to

11 provide child care for children served by

12 the tribal organization;

13 ‘‘(iii) a center that is used as a Head

14 Start center under the Head Start Act (42

15 U.S.C. 9831 et seq.) and is in compliance

16 with any applicable performance standards

17 established by regulation under such Act

18 for Head Start programs; or

19 ‘‘(iv) a military child development cen20 ter (as defined in section 1798(1) of title

21 10, United States Code).

22 ‘‘(F) CHILD CARE CREDENTIALING OR AC23 CREDITATION ENTITY.—The term ‘child care

24 credentialing or accreditation entity’ means a
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1 nonprofit private organization or public agency

2 that—

3 ‘‘(i) is recognized by a State agency or

4 tribal organization; and

5 ‘‘(ii) accredits a center or credentials

6 an individual to provide child care on the

7 basis of—

8 ‘‘(I) an accreditation or

9 credentialing instrument based on

10 peer-validated research;

11 ‘‘(II) compliance with applicable

12 State and local licensing require13 ments, or standards described in sec14 tion 658E(c)(2)(E)(ii) of the Child

15 Care and Development Block Grant

16 Act (42 U.S.C. 9858c(c)(2)(E)(ii)), as

17 appropriate, for the center or individ18 ual;

19 ‘‘(III) outside monitoring of the

20 center or individual; and

21 ‘‘(IV) criteria that provide assur22 ances of—

23 ‘‘(aa) compliance with age24 appropriate health and safety
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1 standards at the center or by the

2 individual;

3 ‘‘(bb) use of age-appropriate

4 developmental and educational

5 activities, as an integral part of

6 the child care program carried

7 out at the center or by the indi8 vidual; and

9 ‘‘(cc) use of ongoing staff

10 development or training activities

11 for the staff of the center or the

12 individual, including related

13 skills-based testing.

14 ‘‘(G) CREDENTIALED CHILD CARE PRO15 FESSIONAL.—The term ‘credentialed child care

16 professional’ means—

17 ‘‘(i) an individual who is credentialed,

18 by a child care credentialing or accredita19 tion entity recognized by a State, to pro20 vide child care to children in the State (ex21 cept children who a tribal organization

22 elects to serve through an individual de23 scribed in clause (i)); or

24 ‘‘(ii) an individual who is credentialed,

25 by a child care credentialing or accredita-
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1 tion entity recognized by a tribal organiza2 tion, to provide child care for children

3 served by the tribal organization.

4 ‘‘(H) TRIBAL ORGANIZATION.—The term

5 ‘tribal organization’ has the meaning given the

6 term in section 658P of the Child Care and De7 velopment Block Grant Act (42 U.S.C.

8 9858n).’’

9 (c) CREDIT MADE REFUNDABLE FOR LOW INCOME

10 TAXPAYERS.—

11 (1) IN GENERAL.—Section 21 of the Internal

12 Revenue Code of 1986 (relating to credit for house13 hold and dependent care services) is amended by re14 designating subsection (f) as subsection (g) and by

15 inserting after subsection (e) the following:

16 ‘‘(f) CREDIT MADE REFUNDABLE FOR LOW INCOME

17 TAXPAYERS.—

18 ‘‘(1) IN GENERAL.—For purposes of this sub19 title, in the case of an applicable taxpayer individual,

20 the credit allowable under subsection (a) for any tax21 able year shall be treated as a credit allowable under

22 subpart C of this part.

23 ‘‘(2) APPLICABLE TAXPAYER.—For purposes of

24 this subsection, the term ‘applicable taxpayer’ means
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1 a taxpayer with respect to whom the credit under

2 section 32 is allowable for the taxable year.

3 ‘‘(3) COORDINATION WITH ADVANCE PAYMENTS

4 AND MINIMUM TAX.—Rules similar to the rules of

5 subsections (g) and (h) of section 32 shall apply

6 with respect to the portion of any credit to which

7 this subsection applies.’’.

8 (2) ADVANCE PAYMENT OF CREDIT.—

9 (A) IN GENERAL.—Chapter 25 of such

10 Code (relating to general provisions relating to

11 employment taxes) is amended by inserting

12 after section 3507 the following:

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

14 CREDIT.

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

16 in this section, every employer making payment of wages

17 with respect to whom a dependent care eligibility certifi18 cate is in effect shall, at the time of paying such wages,

19 make an additional payment equal to such employee’s de20 pendent care advance amount.

21 ‘‘(b) DEPENDENT CARE ELIGIBILITY CERTIFI22 CATE.—For purposes of this title, a dependent care eligi23 bility certificate is a statement furnished by an employee

24 to the employer which—
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1 ‘‘(1) certifies that the employee will be eligible

2 to receive the credit provided by section 21 for the

3 taxable year,

4 ‘‘(2) certifies that the employee reasonably ex5 pects to be an applicable taxpayer for the taxable

6 year,

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

8 a dependent care eligibility certificate in effect for

9 the calendar year with respect to the payment of

10 wages by another employer,

11 ‘‘(4) states whether or not the employee’s

12 spouse has a dependent care eligibility certificate in

13 effect,

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

15 in the household maintained by the employee,

16 ‘‘(6) states whether a qualifying individual will

17 be cared for by an accredited child care center or a

18 credentialed child care professional, and

19 ‘‘(7) estimates the amount of employment-relat20 ed expenses for the calendar year.

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

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

23 the term ‘dependent care advance amount’ means,

24 with respect to any payroll period, the amount

25 determined—
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1 ‘‘(A) on the basis of the employee’s wages

2 from the employer for such period,

3 ‘‘(B) on the basis of the employee’s esti4 mated employment-related expenses included in

5 the dependent care eligibility certificate, and

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

7 the Secretary.

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

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

10 form to the tables prescribed under section 3402

11 and, to the maximum extent feasible, shall be coordi12 nated with such tables and the tables prescribed

13 under section 3507(c).

14 ‘‘(d) OTHER RULES.—For purposes of this section,

15 rules similar to the rules of subsections (d) and (e) of sec16 tion 3507 shall apply.

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

18 terms used in this section which are defined in section 21

19 shall have the respective meanings given such terms by

20 section 21.’’.

21 (B) CONFORMING AMENDMENT.—The

22 table of sections for chapter 25 of such Code is

23 amended by adding after the item relating to

24 section 3507 the following:

‘‘Sec. 3507A. Advance payment of dependent care credit.’’.
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1 (d) EFFECTIVE DATES.—

2 (1) APPLICABLE PERCENTAGE.—The amend3 ments made by subsections (a) and (b) shall apply

4 to taxable years beginning after December 31, 1999.

5 (2) CREDIT MADE REFUNDABLE.—The amend6 ments made by subsection (c) shall apply to taxable

7 years beginning after December 31, 2000.

8 SEC. 102. EXPANSION OF DEPENDENT CARE ASSISTANCE

9 PROGRAM.

10 (a) IN GENERAL.—Section 129(a)(2)(A) of the Inter11 nal Revenue Code of 1986 (relating to limitation of exclu12 sion) is amended to read as follows:

13 ‘‘(A) DOLLAR LIMITATION.—

14 ‘‘(i) IN GENERAL.—The amount which

15 may be excluded under paragraph (1) for

16 dependent care assistance with respect to

17 dependent care services provided during a

18 taxable year shall not exceed—

19 ‘‘(I) in the case of dependent

20 care services provided by an accred21 ited child care center or a credentialed

22 child care professional for a qualifying

23 individual described in section

24 21(b)(1)(A), an amount determined in

25 accordance with the following table:
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‘‘In the case of taxable

years beginning in:

For 1 qualifying individual,

the amount is:

For 2 or more

qualifying individuals, the

amount is:

1998 $5,200 $6,700

1999 $5,400 $6,900

2000 $5,600 $7,100

2001 $5,800 $7,300

2002 and thereafter $6,000 $7,500,

1 ‘‘(II) in the case of other depend2 ent care services for a qualifying indi3 vidual described in section

4 21(b)(1)(A) or payments described in

5 subsection (e)(1)(B), an amount de6 termined in accordance with the fol7 lowing table:

‘‘In the case of taxable

years beginning in:

For 1 qualifying individual,

the amount is:

For 2 or more

qualifying individuals, the

amount is:

1998 $4,800 $6,300

1999 $4,600 $6,100

2000 $4,400 $5,900

2001 $4,200 $5,700

2002 and thereafter $4,000 $5,500,

8 and

9 ‘‘(III) in the case of other de10 pendent care services for a qualifying

11 individual described in subparagraph

12 (B) or (C) of section 21(b)(1),

13 $5,000.

14 ‘‘(ii) AMOUNTS FOR MARRIED INDI15 VIDUALS FILING SEPARATE RETURNS.—In

16 the case of a separate return by a married
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1 individual, clause (i) shall be applied by

2 using one-half of any amount specified in

3 such clause.

4 ‘‘(iii) PROVIDERS.—For purposes of

5 clause (i)(I), the terms ‘accredited child

6 care center’ and ‘credentialed child care

7 professional’ have the meaning given such

8 terms by subparagraphs (E) and (G) of

9 section 21(c)(2), respectively.

10 (b) PAYMENTS FOR STAY-AT-HOME CARE AL11 LOWED.—

12 (1) IN GENERAL.—Section 129(e)(1) of the In13 ternal Revenue Code of 1986 (relating to definitions

14 and special rules) is amended to read as follows:

15 ‘‘(1) DEPENDENT CARE ASSISTANCE.—The

16 term ‘dependent care assistance’ means—

17 ‘‘(A) the payment of, or provision of, those

18 services which if paid for by the employee would

19 be considered employment-related expenses

20 under section 21(b)(2) (relating to expenses for

21 household and dependent care services nec22 essary for gainful employment), and

23 ‘‘(B) any payment to the employee from

24 amounts contributed to the employee’s account

25 during the pregnancy of the employee paid
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1 within 1 year after such contribution and dur2 ing the period in which—

3 ‘‘(i) the employee,

4 ‘‘(ii) the employee’s spouse, or

5 ‘‘(iii) a parent of the employee or the

6 employee’s spouse,

7 stays at home to care for a qualifying individual

8 described in section 21(b)(1)(A).’’.

9 (2) CONFORMING AMENDMENTS.—

10 (A) Section 129(c) of such Code (relating

11 to payments to related individuals) is amended

12 by striking ‘‘No amount’’ and inserting ‘‘Except

13 in the case of payments described in subsection

14 (e)(1)(B), no amount.’’.

15 (B) Section 129(e)(9) of such Code (relat16 ing to identifying information required with re17 spect to service provider) is amended by strik18 ing ‘‘No amount’’ and inserting ‘‘Except in the

19 case of payments described in paragraph

20 (1)(B)(i), no amount.’’.

21 (c) DEPENDENT CARE ASSISTANCE PROGRAM FOR

22 FEDERAL EMPLOYEES.—Subpart G of part III of title 5,

23 United States Code, is amended by inserting after chapter

24 87 the following:
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1 ‘‘CHAPTER 88—DEPENDENT CARE

2 ASSISTANCE PROGRAM

3 ‘‘§ 8801. Definitions

4 ‘‘(a) For the purpose of this chapter, ‘employee’

5 means—

6 ‘‘(1) an employee as defined by section 2105 of

7 this title;

8 ‘‘(2) a Member of Congress as defined by sec9 tion 2106 of this title;

10 ‘‘(3) a Congressional employee as defined by

11 section 2107 of this title;

12 ‘‘(4) the President;

13 ‘‘(5) a justice or judge of the United States ap14 pointed to hold office during good behavior (i) who

15 is in regular active judicial service, or (ii) who is re16 tired from regular active service under section

17 371(b) or 372(a) of title 28, United States Code, or

18 (iii) who has resigned the judicial office under sec19 tion 371(a) of title 28 with the continued right dur20 ing the remainder of his lifetime to receive the sal21 ary of the office at the time of his resignation;

22 ‘‘(6) an individual first employed by the govern23 ment of the District of Columbia before October 1,

24 1987;
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1 ‘‘(7) an individual employed by Gallaudet Col2 lege;

3 ‘‘(8) an individual employed by a county com4 mittee established under section 590h(b) of title 16;

5 ‘‘(9) an individual appointed to a position on

6 the office staff of a former President under section

7 1(b) of the Act of August 25, 1958 (72 Stat. 838);

8 and

9 ‘‘(10) an individual appointed to a position on

10 the office staff of a former President, or a former

11 Vice President under section 4 of the Presidential

12 Transition Act of 1963, as amended (78 Stat. 153),

13 who immediately before the date of such appoint14 ment was an employee as defined under any other

15 paragraph of this subsection;

16 but does not include—

17 ‘‘(A) an employee of a corporation supervised

18 by the Farm Credit Administration if private inter19 ests elect or appoint a member of the board of direc20 tors;

21 ‘‘(B) an individual who is not a citizen or na22 tional of the United States and whose permanent

23 duty station is outside the United States, unless the

24 individual was an employee for the purpose of this

25 chapter on September 30, 1979, by reason of service
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1 in an Executive agency, the United States Postal

2 Service, or the Smithsonian Institution in the area

3 which was then known as the Canal Zone; or

4 ‘‘(C) an employee excluded by regulation of the

5 Office of Personnel Management under section

6 8716(b) of this title.

7 ‘‘(b) For the purpose of this chapter, ‘dependent care

8 assistance program’ has the meaning given such term by

9 section 129(d) of the Internal Revenue Code of 1986.

10 ‘‘§ 8802. Dependent care assistance program

11 ‘‘The Office of Personnel Management shall establish

12 and maintain a dependent care assistance program for the

13 benefit of employees.’’.

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

15 this section apply to taxable years beginning after Decem16 ber 31, 1999.

17 SEC. 103. INCLUSION OF CHILD CARE COSTS IN CHILD SUP18 PORT ORDERS.

19 (a) IN GENERAL.—Section 466(a) of the Social Secu20 rity Act (42 U.S.C. 666(a)) is amended by inserting after

21 paragraph (19) the following:

22 ‘‘(20) CHILD CARE COSTS.—

23 ‘‘(A) IN GENERAL.—Procedures under

24 which all child support orders enforced under

25 this part shall include in the case of a custodial
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1 parent who is employed or is actively seeking

2 employment an amount equal to or more than

3 the applicable payment rate for the type of

4 child care services provided to that parent’s

5 child or children that is established in accord6 ance with section 658E(c)(4) of the Child Care

7 and Development Block Grant Act of 1990 (42

8 U.S.C. 9858c(c)(4)), increased by 50 percent of

9 such rate if such services are provided by an ac10 credited child care center or a credentialed child

11 care professional.

12 ‘‘(B) DEFINITIONS.—In this paragraph,

13 the terms ‘accredited child care center’ and

14 ‘credentialed child care professional’ have the

15 meaning given those terms in section 2 of the

16 CIDCARE Act.’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 subsection (a) applies to child support orders enforced or

19 otherwise modified by a court on and after the date of

20 enactment of this Act.
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1 TITLE II—SUPPLY OF QUALITY

2 CHILD CARE

3 Subtitle A—Tax Benefits for

4 Quality Child Care

5 SEC. 201. ALLOWANCE OF CREDIT FOR EMPLOYER EX6 PENSES FOR CHILD CARE ASSISTANCE.

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of

9 1986 (relating to business related credits) is amended by

10 adding at the end the following new section:

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

12 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec13 tion 38, the employer-provided child care credit deter14 mined under this section for the taxable year is an amount

15 equal to 50 percent of the qualified child care expenditures

16 of the taxpayer for such taxable year.

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

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

19 $150,000.

20 ‘‘(c) DEFINITIONS.—For purposes of this section—

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

22 The term ‘qualified child care expenditure’ means

23 any amount paid or incurred—

24 ‘‘(A) to acquire, construct, rehabilitate, or

25 expand property—
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1 ‘‘(i) which is to be used as part of a

2 qualified child care facility of the taxpayer,

3 ‘‘(ii) with respect to which a deduction

4 for depreciation (or amortization in lieu of

5 depreciation) is allowable, and

6 ‘‘(iii) which does not constitute part of

7 the principal residence (within the meaning

8 of section 1034) of the taxpayer or any

9 employee of the taxpayer,

10 ‘‘(B) for the operating costs of a qualified

11 child care facility of the taxpayer, including

12 costs related to the training of employees, to

13 scholarship programs, and to the providing of

14 increased compensation to employees with high15 er levels of child care training,

16 ‘‘(C) under a contract with a qualified

17 child care facility to provide child care services

18 to employees of the taxpayer,

19 ‘‘(D) under a contract to provide child care

20 resource and referral services to employees of

21 the taxpayer, or

22 ‘‘(E) for the costs of seeking accreditation

23 from a child care credentialing or accreditation

24 entity (as defined in section 21(b)(2)(F) with

25 respect to a qualified child care facility.
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1 ‘‘(2) QUALIFIED CHILD CARE FACILITY.—

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

3 child care facility’ means a facility—

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

5 provide child care assistance, and

6 ‘‘(ii) which meets the requirements of

7 all applicable laws and regulations of the

8 State or local government in which it is lo9 cated, including, but not limited to, the li10 censing of the facility as a child care facil11 ity.

12 Clause (i) shall not apply to a facility which is

13 the principal residence (within the meaning of

14 section 1034) of the operator of the facility.

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

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

17 qualified child care facility with respect to a

18 taxpayer unless—

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

20 to employees of the taxpayer during the

21 taxable year,

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

23 trade or business of the taxpayer unless at

24 least 30 percent of the enrollees of such fa-
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1 cility are dependents of employees of the

2 taxpayer, and

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

4 eligibility to use such facility) does not dis5 criminate in favor of employees of the tax6 payer who are highly compensated employ7 ees (within the meaning of section 414(q)).

8 ‘‘(d) RECAPTURE OF ACQUISITION AND CONSTRUC9 TION CREDIT.—

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

11 taxable year, there is a recapture event with respect

12 to any qualified child care facility of the taxpayer,

13 then the tax of the taxpayer under this chapter for

14 such taxable year shall be increased by an amount

15 equal to the product of—

16 ‘‘(A) the applicable recapture percentage,

17 and

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

19 allowed under section 38 for all prior taxable

20 years which would have resulted if the qualified

21 child care expenditures of the taxpayer de22 scribed in subsection (c)(1)(A) with respect to

23 such facility had been zero.

24 ‘‘(2) APPLICABLE RECAPTURE PERCENTAGE.—
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1 ‘‘(A) IN GENERAL.—For purposes of this

2 subsection, the applicable recapture percentage

3 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.

4 ‘‘(B) YEARS.—For purposes of subpara5 graph (A), year 1 shall begin on the first day

6 of the taxable year in which the qualified child

7 care facility is placed in service by the taxpayer.

8 ‘‘(3) RECAPTURE EVENT DEFINED.—For pur9 poses of this subsection, the term ‘recapture event’

10 means—

11 ‘‘(A) CESSATION OF OPERATION.—The

12 cessation of the operation of the facility as a

13 qualified child care facility.

14 ‘‘(B) CHANGE IN OWNERSHIP.—

15 ‘‘(i) IN GENERAL.—Except as pro16 vided in clause (ii), the disposition of a

17 taxpayer’s interest in a qualified child care

18 facility with respect to which the credit de19 scribed in subsection (a) was allowable.
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1 ‘‘(ii) AGREEMENT TO ASSUME RECAP2 TURE LIABILITY.—Clause (i) shall not

3 apply if the person acquiring such interest

4 in the facility agrees in writing to assume

5 the recapture liability of the person dispos6 ing of such interest in effect immediately

7 before such disposition. In the event of

8 such an assumption, the person acquiring

9 the interest in the facility shall be treated

10 as the taxpayer for purposes of assessing

11 any recapture liability (computed as if

12 there had been no change in ownership).

13 ‘‘(4) SPECIAL RULES.—

14 ‘‘(A) TAX BENEFIT RULE.—The tax for

15 the taxable year shall be increased under para16 graph (1) only with respect to credits allowed

17 by reason of this section which were used to re18 duce tax liability. In the case of credits not so

19 used to reduce tax liability, the carryforwards

20 and carrybacks under section 39 shall be appro21 priately adjusted.

22 ‘‘(B) NO CREDITS AGAINST TAX.—Any in23 crease in tax under this subsection shall not be

24 treated as a tax imposed by this chapter for
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1 purposes of determining the amount of any

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

3 ‘‘(C) NO RECAPTURE BY REASON OF CAS4 UALTY LOSS.—The increase in tax under this

5 subsection shall not apply to a cessation of op6 eration of the facility as a qualified child care

7 facility by reason of a casualty loss to the ex8 tent such loss is restored by reconstruction or

9 replacement within a reasonable period estab10 lished by the Secretary.

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

12 section—

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

14 are treated as a single employer under subsections

15 (a) and (b) of section 52 shall be treated as a single

16 taxpayer.

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

18 TRUSTS.—Under regulations prescribed by the Sec19 retary, rules similar to the rules of subsection (d) of

20 section 52 shall apply.

21 ‘‘(3) ALLOCATION IN THE CASE OF PARTNER22 SHIPS.—In the case of partnerships, the credit shall

23 be allocated among partners under regulations pre24 scribed by the Secretary.

25 ‘‘(f) NO DOUBLE BENEFIT.—
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1 ‘‘(1) REDUCTION IN BASIS.—For purposes of

2 this subtitle—

3 ‘‘(A) IN GENERAL.—If a credit is deter4 mined under this section with respect to any

5 property by reason of expenditures described in

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

7 shall be reduced by the amount of the credit so

8 determined.

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

10 any taxable year there is a recapture amount

11 determined with respect to any property the

12 basis of which was reduced under subparagraph

13 (A), the basis of such property (immediately be14 fore the event resulting in such recapture) shall

15 be increased by an amount equal to such recap16 ture amount. For purposes of the preceding

17 sentence, the term ‘recapture amount’ means

18 any increase in tax (or adjustment in

19 carrybacks or carryovers) determined under

20 subsection (d).

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

22 deduction or credit shall be allowed under any other

23 provision of this chapter with respect to the amount

24 of the credit determined under this section.
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1 ‘‘(g) TERMINATION.—This section shall not apply to

2 taxable years beginning after December 31, 1999.’’

3 (b) CONFORMING AMENDMENTS.—

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

5 of 1986 is amended—

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

7 paragraph (11),

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

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

10 ‘‘plus’’, and

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

12 paragraph:

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

14 determined under section 45D.’’

15 (2) The table of sections for subpart D of part

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

17 amended by adding at the end the following new

18 item:

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

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

20 this section shall apply to taxable years beginning after

21 December 31, 1999.
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1 SEC. 202. CHARITABLE CONTRIBUTIONS OF SCIENTIFIC

2 EQUIPMENT TO ACCREDITED AND

3 CREDENTIALED CHILD CARE PROVIDERS

4 AND TO ELEMENTARY AND SECONDARY

5 SCHOOLS.

6 (a) IN GENERAL.—Subparagraph (B) of section

7 170(e)(4) of the Internal Revenue Code of 1986 (relating

8 to special rule for contributions of scientific property used

9 for research) is amended to read as follows:

10 ‘‘(B) QUALIFIED RESEARCH, CHILD CARE,

11 OR EDUCATION CONTRIBUTION.—For purposes

12 of this paragraph, the term ‘qualified research,

13 child care, or education contribution’ means a

14 charitable contribution by a corporation of tan15 gible personal property (including computer

16 software), but only if—

17 ‘‘(i) the contribution is to—

18 ‘‘(I) an organization described in

19 section 501(c)(3) and exempt from

20 taxation under section 501(a) which is

21 an accredited child care center (as de22 fined in section 21(c)(2)(E)) or a

23 child care center actively seeking ac24 creditation or certification of its em25 ployees by a child care credentialing

26 or accreditation entity (as defined in
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1 section 21(c)(2)(F)) on the date of

2 such contribution,

3 ‘‘(II) an organization described

4 in section 501(c)(3) and exempt from

5 taxation under section 501(a) which is

6 a professional or educational support

7 entity for accredited child care centers

8 or credentialed child care profes9 sionals (as defined in subparagraphs

10 (E) and (G) of section 21(c)(2), re11 spectively),

12 ‘‘(III) an educational organiza13 tion described in subsection

14 (b)(1)(A)(ii),

15 ‘‘(IV) a governmental unit de16 scribed in subsection (c)(1), or

17 ‘‘(V) an organization described in

18 section 41(e)(6)(B),

19 ‘‘(ii) the contribution is made not

20 later than 3 years after the date the tax21 payer acquired the property (or in the case

22 of property constructed by the taxpayer,

23 the date the construction of the property is

24 substantially completed),
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1 ‘‘(iii) the property is scientific equip2 ment or apparatus substantially all of the

3 use of which by the donee is for—

4 ‘‘(I) research or experimentation

5 (within the meaning of section 174),

6 or for research training, in the United

7 States in physical or biological

8 sciences, or

9 ‘‘(II) in the case of an organiza10 tion described in subclause (I), (II),

11 (III), or (IV) of clause (i), use within

12 the United States for educational pur13 poses or support activities related to

14 the purpose or function of the organi15 zation,

16 ‘‘(iv) the original use of the property

17 began with the taxpayer (or in the case of

18 property constructed by the taxpayer, with

19 the donee),

20 ‘‘(v) the property is not transferred by

21 the donee in exchange for money, other

22 property, or services, and

23 ‘‘(vi) the taxpayer receives from the

24 donee a written statement representing

25 that its use and disposition of the property
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1 will be in accordance with the provisions of

2 clauses (iv) and (v).’’.

3 (b) DONATIONS TO CHARITY FOR REFURBISHING.—

4 Section 170(e)(4) of the Internal Revenue Code of 1986

5 is amended by adding at the end the following:

6 ‘‘(D) DONATIONS TO CHARITY FOR REFUR7 BISHING.—For purposes of this paragraph, a

8 charitable contribution by a corporation shall be

9 treated as a qualified research, child care, or

10 education contribution if—

11 ‘‘(i) such contribution is a contribu12 tion of property described in subparagraph

13 (B)(iii) to an organization described in sec14 tion 501(c)(3) and exempt from taxation

15 under section 501(a),

16 ‘‘(ii) such organization repairs and re17 furbishes the property and donates the

18 property to an organization described in

19 subparagraph (B)(i), and

20 ‘‘(iii) the taxpayer receives from the

21 organization to whom the taxpayer contrib22 uted the property a written statement rep23 resenting that its use of the property (and

24 any use by the organization to which it do-
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1 nates the property) meets the requirements

2 of this paragraph.’’.

3 (c) CONFORMING AMENDMENTS.—

4 (1) Paragraph (4)(A) of section 170(e) of the

5 Internal Revenue Code of 1986 is amended by strik6 ing ‘‘qualified research contribution’’ each place it

7 appears and inserting ‘‘qualified research, child care,

8 or education contribution’’.

9 (2) The heading for section 170(e)(4) of such

10 Code is amended by inserting ‘‘, CHILD CARE, OR

11 EDUCATION’’ after ‘‘RESEARCH’’.

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

13 this section shall apply to taxable years beginning after

14 December 31, 1999.

15 SEC. 203. 2-PERCENT FLOOR ON MISCELLANEOUS

16 ITEMIZED DEDUCTIONS NOT APPLICABLE TO

17 ACCREDITATION AND CREDENTIALING EX18 PENSES OF CHILD CARE PROVIDERS.

19 (a) IN GENERAL.—Section 67(b) of the Internal Rev20 enue Code of 1986 (relating to miscellaneous itemized de21 ductions) is amended by striking ‘‘and’’ at the end of para22 graph (11), by striking the period at the end of paragraph

23 (12) and inserting ‘‘, and’’, and by adding at the end the

24 following:
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1 ‘‘(13) the deduction allowable for accreditation

2 and credentialing expenses of child care providers.’’.

3 (b) DEFINITION.—Section 67 of the Internal Reve4 nue Code of 1986 (relating to 2-percent floor on mis5 cellaneous itemized deductions) is amended by redesignat6 ing subsections (e) and (f) as subsections (f) and (g), re7 spectively, and by inserting after subsection (d) the follow8 ing:

9 ‘‘(e) ACCREDITATION AND CREDENTIALING EX10 PENSES OF CHILD CARE PROVIDERS.—For purposes of

11 this section—

12 ‘‘(1) IN GENERAL.—The term ‘accreditation

13 and credentialing expenses of child care providers’

14 means direct professional costs and educational and

15 training expenses paid or incurred by an eligible in16 dividual in order to achieve and remain qualified for

17 service as an employee of an accredited child care

18 center or as a credentialed child care professional

19 (as defined in subparagraphs (E) and (G) of section

20 21(c)(2), respectively).

21 ‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible

22 individual’ means an individual 60 percent of the

23 taxable income of whom for any taxable year is de24 rived from service described in paragraph (1).’’.
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1 (c) EFFECTIVE DATE.—The amendment made by

2 this section shall apply to taxable years beginning after

3 December 31, 1999.

4 SEC. 204. EXPANSION OF HOME OFFICE DEDUCTION TO IN5 CLUDE USE OF OFFICE FOR DEPENDENT

6 CARE.

7 (a) IN GENERAL.—Section 280A(c)(1) of the Inter8 nal Revenue Code of 1986 (relating to certain business

9 use) is amended by adding at the end the following: ‘‘A

10 portion of a dwelling unit and the exclusive use of such

11 portion otherwise described in this paragraph shall not fail

12 to be so described if such portion is also used by the tax13 payer during such exclusive use to care for a dependent

14 of the taxpayer.’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 this section shall apply to taxable years beginning after

17 December 31, 1999.

18 Subtitle B—Child Care Quality

19 Improvement Incentive Program

20 SEC. 211. DEFINITIONS.

21 In this subtitle:

22 (1) CHILD CARE PROVIDER.—The term ‘‘child

23 care provider’’ means—

24 (A) a center-based child care provider, a

25 group home child care provider, a family child
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1 care provider, or other provider of non-residen2 tial child care services for compensation that—

3 (i) is licensed, regulated, registered, or

4 otherwise legally operating under State

5 law; and

6 (ii) satisfies the State and local re7 quirements;

8 applicable to the child care services it provides;

9 or

10 (B) a child care provider that is 18 years

11 of age or older who provides child care services

12 only to eligible children who are, by affinity or

13 consanguinity, or by court decree, the grand14 child, great grandchild, sibling (if such provider

15 lives in a separate residence), niece, or nephew

16 of such provider, if such provider does not re17 side with the child for whom they are providing

18 care and if the provider complies with any ap19 plicable requirements that govern child care

20 provided by the relative involved.

21 (2) SECRETARY.—The term ‘‘Secretary’’ means

22 the Secretary of Health and Human Services.

23 SEC. 212. ESTABLISHMENT OF STATE PROGRAM.

24 (a) IN GENERAL.—The Secretary shall establish a

25 program to award competitive grants to eligible States to
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1 enable such States to carry out activities to improve the

2 quality of child care for children in the States (except chil3 dren who a tribal organization elects to serve under section

4 215(b)).

5 (b) AWARDING OF GRANTS.—

6 (1) DISTRIBUTION.—Amounts appropriated for

7 a fiscal year under section 215(a) shall be distrib8 uted through competitive grants awarded to eligible

9 States that apply for funds and that propose activi10 ties that meet the requirements of this subtitle.

11 (2) AMOUNT.—The amount of a grant awarded

12 to a State under this section shall be determined by

13 the Secretary on a competitive basis, except that the

14 amount of any such grant for a fiscal year shall not

15 be less than an amount equal to .75 percent of the

16 total amount appropriated for the fiscal year under

17 section 215(a).

18 (c) LIMITATION ON ADMINISTRATIVE COSTS.—The

19 Secretary shall not use in excess of 10 percent of the

20 amount appropriated under section 215(a) for a fiscal

21 year for the administrative costs associated with the ad22 ministration of the program under this section.
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1 SEC. 213. STATE ELIGIBILITY AND APPLICATION REQUIRE2 MENTS.

3 (a) ELIGIBILITY.—To be eligible to receive a grant

4 under this subtitle, a State shall certify to the Secretary

5 that the State—

6 (1) has not reduced the scope of any State child

7 care standards or requirements that were in effect in

8 calendar year 1995;

9 (2) has not limited the State licensing require10 ments with respect to the types of providers that

11 must obtain licenses in order to provide child care

12 in the State as compared to the types of providers

13 that were required to obtain licenses in calendar

14 year 1995;

15 (3) has not otherwise restricted the application

16 of State child care licensing requirements that were

17 in effect in calendar year 1995;

18 (4) is in compliance with the requirements ap19 plicable to the State under the Child Care and De20 velopment Block Grant Act of 1990 (42 U.S.C.

21 9801 et seq.); and

22 (5) has, with respect to the fiscal year involved,

23 made available sufficient State matching funds to

24 draw down at least 80 percent of the amount award25 ed to the State for the preceding fiscal year under
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1 a grant under section 418(a)(2) of the Social Secu2 rity Act (42 U.S.C. 618).

3 (b) PRIORITY.—In awarding grants under this sub4 title, the Secretary shall give priority to States that con5 tribute an amount (generated from businesses or other

6 private sources) equal to not less than 10 percent of the

7 amount requested under the grant to the activities to be

8 funded under the grant.

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

10 under this subtitle, a State shall prepare and submit to

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

12 and containing such information as the Secretary shall re13 quire, including—

14 (1) an assurance that the State will comply

15 with the requirements applicable to States under

16 this subtitle;

17 (2) an assurance that the State will annually

18 conduct on-site monitoring of State licensed or regu19 lated child care facilities, with at least 1 unan20 nounced monitoring visit of each such facility every

21 3 years; and

22 (3) an assurance that the State will not use

23 funds received under the grant to supplant or re24 place funds used by the State to improve the quality

25 or increase the supply of child care as required
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1 under section 658G of the Child Care and Develop2 ment Block Grants Act of 1990 (42 U.S.C. 9858e).

3 SEC. 214. USE OF FUNDS BY STATES.

4 (a) REQUIRED ACTIVITIES.—A State shall—

5 (1) use not less than 20 percent of the amounts

6 received under a grant awarded to the State under

7 this subtitle to establish a subsidy program to pro8 vide funds to child care providers who are

9 credentialed in the State (as described in section

10 2(3));

11 (2) use not less than 20 percent of the amounts

12 received under a grant awarded to the State under

13 this subtitle to establish a grant program to assist

14 small businesses located in the State in establishing

15 and operating child care programs that may

16 include—

17 (A) technical assistance in the establish18 ment of a child care program;

19 (B) assistance for the start-up costs relat20 ed to a child care program;

21 (C) assistance for the training of child care

22 providers;

23 (D) scholarships for low-income wage earn24 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) assistance for any other activity deter8 mined appropriate by the State; or

9 (H) care for children with disabilities; and

10 (3) use amounts remaining after the State re11 serves funds for activities under paragraphs (1) and

12 (2) to carry out one or more of the activities de13 scribed in subsection (b).

14 (b) PERMISSIBLE ACTIVITIES.—A State may use

15 amounts provided under a grant awarded under this sub16 title to the State to—

17 (1) improve parental choice through consumer

18 education efforts in the State concerning child care,

19 including the expansion of resource and referral

20 services and improving State child care complaint

21 systems;

22 (2) establish a scholarship program for child

23 care providers to assist in meeting the educational or

24 training costs associated with the accreditation or

25 credentialing;
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1 (3) expand State-based child care training and

2 technical assistance activities;

3 (4) develop criteria for State recognition of en4 tities to accredit facilities, and credential child care

5 providers, in the State, as described in section 2;

6 (5) provide increased rates of reimbursement

7 under Federal or State child care assistance pro8 grams for child care that is provided by credentialed

9 child care professionals or at accredited child care

10 centers;

11 (6) provide differential rates of reimbursement

12 under Federal or State child care assistance pro13 grams for children with special needs; or

14 (7) purchase special equipment or supplies or

15 provide for the payment of other extraordinary ex16 penses required for the care of special needs (includ17 ing disabled) children and the distribution of such

18 equipment or supplies to child care providers serving

19 special needs children.

20 (c) SMALL BUSINESS AND CHILD CARE GRANT PRO21 GRAM.—

22 (1) APPLICATION.—To be eligible to receive as23 sistance from a State under a grant program estab24 lished under subsection (a)(2), a small business shall

25 prepare and submit to the State an application at
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1 such time, in such manner, and containing such in2 formation as the State may require.

3 (2) PREFERENCE.—

4 (A) IN GENERAL.—In providing assistance

5 under a grant program under this subsection, a

6 State shall give priority to applicants that de7 sire to form consortium to provide child care in

8 geographic areas within the State where such

9 care is not generally available or accessible.

10 (B) CONSORTIUM.—For purposes of sub11 paragraph (A), a consortium shall be made up

12 of 2 or more entities which may include busi13 nesses, nonprofit agencies or organizations,

14 local governments, or other appropriate entities.

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

16 received for purposes of this subsection, a State may

17 not provide in excess of $50,000 in assistance from

18 such funds to any single applicant. A State may not

19 provide assistance under a grant to more than 10

20 entities.

21 (4) MATCHING REQUIREMENT.—To be eligible

22 to receive funds for purposes of establishing a grant

23 program under subsection (a)(2), a State shall pro24 vide assurances to the Secretary that, with respect

25 to the costs to be incurred by an entity receiving as-
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1 sistance in carrying out activities under such pro2 gram, such entity will make available (directly or

3 through donations from public or private entities)

4 non-Federal contributions to such costs in an

5 amount equal to—

6 (A) for the first fiscal year in which the

7 entity receives such assistance, not less than 25

8 percent of such costs ($1 for each $3 of assist9 ance provided to the entity under the grant);

10 (B) for the second fiscal year in which an

11 entity receives such assistance, not less than

331 12 ⁄3 percent of such costs ($1 for each $2 of

13 assistance provided to the entity under the

14 grant); and

15 (C) for the third fiscal year in which an

16 entity receives such assistance, not less than 50

17 percent of such costs ($1 for each $1 of assist18 ance provided to the entity under the grant).

19 (5) REQUIREMENTS OF PROVIDERS.—To be eli20 gible to receive assistance under a grant awarded

21 under this subsection a child care provider shall

22 comply with all applicable State and local licensing

23 and regulatory requirements and all applicable

24 health and safety standards in effect in the State.

25 (6) ADMINISTRATION.—
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1 (A) STATE RESPONSIBILITY.—A State

2 shall have responsibility for administering the

3 grants awarded under this subsection and for

4 monitoring entities that receive assistance

5 under such grants.

6 (B) AUDITS.—A State shall require that

7 each entity receiving assistance under a grant

8 awarded under this subsection conduct of an

9 annual audit with respect to the activities of the

10 entity. Such audits shall be submitted to the

11 State.

12 (C) MISUSE OF FUNDS.—

13 (i) REPAYMENT.—If the State deter14 mines, through an audit or otherwise, that

15 an entity receiving assistance under a

16 grant awarded under this subsection has

17 misused such assistance, the State shall

18 notify the Secretary of such misuses. The

19 Secretary, upon such a notification, may

20 seek from such an entity the repayment of

21 an amount equal to the amount of any

22 misused assistance plus interest.

23 (ii) APPEALS PROCESS.—The Sec24 retary shall by regulation provide for an
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1 appeals process with respect to repayments

2 under this subparagraph.

3 (d) LIMITATION ON ADMINISTRATIVE COSTS.—Not

4 more than 10 percent of the aggregate amount of funds

5 available to a State under this subtitle in each fiscal year

6 may be expended for administrative costs incurred by such

7 State to carry out activities under this subtitle. As used

8 in the preceding sentence, the term ‘‘administrative costs’’

9 shall not include the costs of providing direct services (as

10 such direct services costs are defined for purposes of the

11 Child Care and Development Block Grant Act of 1990 (42

12 U.S.C. 9801 et seq.)).

13 SEC. 215. AUTHORIZATION OF APPROPRIATIONS.

14 (a) IN GENERAL.—There is authorized to be appro15 priated to carry out this subtitle $260,000,000 for each

16 of the fiscal years 2000 through 2004.

17 (b) RESERVATION.—The Secretary shall reserve not

18 more than 1.5 percent of the funds appropriated under

19 this section for a fiscal year to make grants under this

20 subtitle to tribal organizations submitting applications

21 under section 213(b) to be used in accordance with section

22 214.
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1 Subtitle C—Distribution of Infor2 mation About Quality Child

3 Care

4 SEC. 221. EXPANSION OF ROLE OF THE DEPARTMENT OF

5 HEALTH AND HUMAN SERVICES IN THE COL6 LECTION AND DISSEMINATION OF INFORMA7 TION AND TECHNOLOGY.

8 (a) PROVISION OF INFORMATION.—The Secretary of

9 Health and Human Services, directly or through a con10 tract awarded on a competitive basis to a qualified entity,

11 shall provide technical assistance and collect and dissemi12 nate information concerning the importance of high qual13 ity child care to States, units of local government, private

14 non-profit child care organizations, child care

15 credentialing or accreditation entities, child care providers,

16 and parents, including, in partnership with the Advertis17 ing Council or other professional advertising group, a pub18 lic awareness campaign promoting quality child care.

19 (b) GRANT PROGRAM.—

20 (1) IN GENERAL.—The Secretary of Health and

21 Human Services, acting through the National Child

22 Care Information Center, shall award competitive

23 grants to child care credentialing or accreditation

24 entities (as defined in section 2(2)) that have been
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1 providing credentialing or accreditation services for

2 child care providers for not more than 10 years.

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

4 grant under this subsection, a child care

5 credentialing or accreditation entity shall prepare

6 and submit to the Secretary an application at such

7 time, in such manner, and containing such informa8 tion as the Secretary shall require.

9 (3) USE OF FUNDS.—Amounts provided under

10 a grant awarded under paragraph (1) shall be used

11 by grantees to refine and evaluate the procedures

12 and methods used by such grantees in accrediting

13 facilities as accredited child care centers or providing

14 child care credentials to individual child care provid15 ers. Such procedures and methods shall be designed

16 to ensure that the highest quality child care is pro17 vided by accredited child care centers and

18 credentialed individuals, to provide information

19 about the accreditation or credentialing process to

20 providers, and to provide subsidies to needy individ21 uals and organizations to enable such individuals

22 and organization to participate in the accreditation

23 or credentialing process.

24 (c) AUTHORIZATION OF APPROPRIATIONS.—There is

25 authorized to be appropriated to carry out this section
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1 $10,000,000 for each of the fiscal years 2000 through

2 2004.

3 SEC. 222. CHILD CARE TRAINING INFRASTRUCTURE.

4 (a) DEFINITIONS.—In this section:

5 (1) CHILD CARE PROVIDER.—The term ‘‘child

6 care provider’’ has the meaning given the term in

7 section 211.

8 (2) ELEMENTARY SCHOOL; SECONDARY

9 SCHOOL.—The terms ‘‘elementary school’’ and ‘‘sec10 ondary school’’ have the meanings given the terms

11 in section 14101 of the Elementary and Secondary

12 Education Act of 1965 (20 U.S.C. 8001).

13 (3) INSTITUTION OF HIGHER EDUCATION.—The

14 term ‘‘institution of higher education’’ has the

15 meaning given the term in section 1201(a) of the

16 Higher Education Act of 1965 (20 U.S.C. 1141(a)).

17 (4) SECRETARY.—The term ‘‘Secretary’’ means

18 the Secretary of Health and Human Services.

19 (5) TRAINING SITE.—The term ‘‘training site’’

20 means a training site described in subsection (e)(1).

21 (b) GRANT.—The Secretary shall make a grant to an

22 eligible organization to develop and operate a technology23 based child care training infrastructure, in order to

24 facilitate—
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1 (1) the accreditation of facilities as accredited

2 child care centers and accredited family child care

3 homes;

4 (2) the credentialing of individuals as

5 credentialed child care professionals; and

6 (3) the dissemination of child care, child devel7 opment, and early childhood education information

8 and research to child care providers.

9 (c) USE OF FUNDS.—An organization that receives

10 a grant under subsection (b) shall use the funds made

11 available through the grant to—

12 (1) develop partnerships, to the maximum ex13 tent possible, with elementary schools, secondary

14 schools, institutions of higher education, Federal,

15 State, and local government agencies, and private

16 entities, to share equipment, technical assistance,

17 and other technological resources, for the develop18 ment of the infrastructure described in subsection

19 (b);

20 (2) enter into arrangements with entities for

21 the provision of sites from which the infrastructure

22 will disseminate training;

23 (3) ensure the establishment of at least 2 of the

24 training sites in each State, and additional training
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1 sites based on the populations and geographic con2 siderations of States;

3 (4) enter into arrangements with child care

4 credentialing or accreditation entities that are recog5 nized (as described in section 2(2)) by more than 1

6 State agency or tribal organization, for the develop7 ment of child care training to be disseminated

8 through the infrastructure;

9 (5) provide, directly or through a contract

10 (which may for good cause be a sole source con11 tract), expertise to convert training courses for dis12 tance transmission, provide interactive environments,

13 and conduct registration, testing, electronic storage

14 of information, and such other technology-based ac15 tivities to adapt and enhance training course content

16 consistent with the medium of transmission involved

17 through the infrastructure;

18 (6) provide, through a logistical scheduling

19 mechanism, equitable access to the infrastructure for

20 all child care credentialing or accreditation entities

21 described in paragraph (4) that request an oppor22 tunity to disseminate child care training through the

23 infrastructure and meet the requirements of this sec24 tion;
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1 (7) develop and implement a mechanism for

2 participants in the training to evaluate the infra3 structure, including providing comments on the ac4 cessibility and affordability of the training, and rec5 ommendations for improvements in the training;

6 (8) develop and implement a monitoring system

7 to provide data on the training provided through the

8 infrastructure, including data on—

9 (A) the number of facilities and individuals

10 participating in the training;

11 (B) the number of facilities receiving ac12 creditation (including a repeat accreditation) as

13 accredited child care centers, and individuals re14 ceiving credentialing (including a repeat

15 credentialing) as credentialed child care profes16 sionals, after fulfilling requirements that in17 clude participation in the training;

18 (C) the number of accredited child care

19 centers, and credentialed child care profes20 sionals, participating in the training; and

21 (D) the number of sites in which the train22 ing is received, analyzed—

23 (i) by State; and

24 (ii) by location in an urban, suburban,

25 or rural area; and
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1 (9) establish and operate the child care training

2 revolving fund described in section 223.

3 (d) ELIGIBILITY.—To be eligible to receive the grant,

4 an organization shall be an organization that—

5 (1) is a private, nonprofit entity that is not—

6 (A) a child care credentialing or accredita7 tion entity;

8 (B) a subsidiary or affiliate of a child care

9 credentialing or accreditation entity; or

10 (C) an entity that has a subsidiary or affil11 iate that is a child care credentialing or accredi12 tation entity;

13 (2) has experience in developing partnerships

14 with child care credentialing or accreditation enti15 ties, institutions of higher education, and State and

16 local governments, for the provision of child care

17 training;

18 (3) has experience in providing and coordinat19 ing the provision of child care training to family

20 child care providers and center-based child care pro21 viders;

22 (4) is related to child care provider support or23 ganizations in 35 or more States, through member24 ship in a common organization, affiliation, or an25 other mechanism;
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1 (5) has experience in working with rural and

2 urban child care provider support organizations and

3 child care providers; and

4 (6) has experience in working with national

5 child care groups and organizations, including Fed6 eral government agencies, providers of child care

7 training, child care credentialing or accreditation en8 tities, and educational groups.

9 (e) APPLICATION.—To be eligible to receive a grant

10 under subsection (b), an organization shall submit an ap11 plication to the Secretary at such time, in such manner,

12 and containing such information as the Secretary may re13 quire, including—

14 (1) information describing, and indicating a

15 preliminary count of the number of, the sites from

16 which the infrastructure will disseminate training;

17 (2) an assurance that the organization will re18 quire that—

19 (A) each child care credentialing or accred20 itation entity that disseminates training

21 through the infrastructure will provide, during

22 at least 60 percent of the dissemination period,

23 an opportunity for participants in the

24 training—
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1 (i) to interact with an identified train2 er or training leader at the training site; or

3 (ii) to elect to engage in other inter4 active training; and

5 (B) no child care credentialing or accredi6 tation entity may collect fees for participation

7 in the training that total more than—

8 (i) the cost to the entity for develop9 ing, conducting, and providing materials

10 for, the training; minus

11 (ii) the amount that the entity re12 ceives under this section or from any other

13 source to develop, conduct, and provide

14 materials for, the training; and

15 (3) information demonstrating that the organi16 zation will comply with the organizational structure

17 requirements of subsections (g) and (h), including a

18 copy of the bylaws described in subsection (g)(2)(B).

19 (f) DEVELOPMENT AND OPERATION OF INFRASTRUC20 TURE.—

21 (1) CONTRACTS.—An organization that receives

22 a grant under subsection (b) may use funds made

23 available through the grant to enter into contracts,

24 which may for good cause be sole source contracts,

25 for the development of the technological and
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1 logistical aspects of the infrastructure. The organiza2 tion shall enter into such a contract with an entity

3 with experience in establishing technology-based

4 interactive educational or training programs.

5 (2) TIME LINES.—

6 (A) BOARD, PERSONNEL, AND REVOLVING

7 FUND.—Not later than 6 months after the date

8 of receipt of the grant, the organization shall

9 establish the governing board described in sub10 section (g), appoint a Chief Executive Project

11 Officer described in subsection (h), and estab12 lish and operate the child care training revolv13 ing fund described in section 223. Not later

14 than 1 year after the date of receipt of the

15 grant, the Chief Executive Project Officer shall

16 appoint the personnel described in subsection

17 (h).

18 (B) TRAINING SITES.—

19 (i) 50 PERCENT OPERATIONAL.—Not

20 later than 3 years after the date of receipt

21 of the grant, the organization shall dis22 seminate training at 50 percent of the sites

23 described in the information submitted

24 under subsection (e)(1).
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1 (ii) 75 PERCENT OPERATIONAL.—Not

2 later than 4 years after the date of receipt

3 of the grant, the organization shall dis4 seminate training at 75 percent of the

5 sites.

6 (iii) 90 PERCENT OPERATIONAL.—Not

7 later than 5 years after the date of receipt

8 of the grant, the organization shall dis9 seminate training at 90 percent of the

10 sites.

11 (C) EVALUATION.—The organization shall

12 develop and implement the mechanism for con13 ducting evaluations of the infrastructure de14 scribed in subsection (c)(6) not later than 3

15 years after the date of receipt of the grant.

16 (g) GOVERNING BOARD.—

17 (1) IN GENERAL.—An organization that re18 ceives a grant under subsection (b) shall establish a

19 governing board.

20 (2) COMPOSITION.—

21 (A) IN GENERAL.—The governing board

22 shall be composed of representatives of child

23 care credentialing or accreditation entities that

24 are recognized (as described in section 2(2)) by

25 more than 1 State agency or tribal organiza-
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1 tion. The representatives shall be appointed by

2 the entities. The composition of the governing

3 board shall be specified in the bylaws of the

4 board.

5 (B) INITIAL BYLAWS.—The organization

6 shall develop the initial bylaws of the board.

7 The bylaws shall include provisions specifying

8 the manner in which representatives of all child

9 care credentialing or accreditation entities de10 scribed in subparagraph (A) that are dissemi11 nating training through the infrastructure shall

12 participate in the activities of the governing

13 board. The provisions shall provide for the par14 ticipation through rotation of the representa15 tives in the membership of the board, involve16 ment of the representatives in committees of

17 the board, or through other mechanisms that

18 ensure, to the maximum extent possible, fair

19 and equal participation of the representatives.

20 (C) AMENDED BYLAWS.—The governing

21 board may amend the bylaws with the consent

22 of the chief executive officer of the organization

23 receiving a grant under subsection (b). The

24 chief executive officer shall give the consent un25 less the chief executive officer demonstrates
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1 good cause for refusal of the consent. Any

2 amended bylaws shall provide for the participa3 tion of representatives of all child care

4 credentialing or accreditation entities described

5 in subparagraph (A) that are disseminating

6 training through the infrastructure, as de7 scribed in subparagraph (B).

8 (3) DUTIES.—The governing board, with over9 sight by the chief executive officer of the organiza10 tion, shall—

11 (A) advise the organization on the develop12 ment and operation of the child care training

13 infrastructure;

14 (B) review and approve the strategic plan

15 described in subsection (h)(2)(A) and annual

16 updates of the plan;

17 (C) review and approve the proposal de18 scribed in subsection (h)(2)(B), with respect to

19 the contracts, financial assistance, standards,

20 policies, procedures, and activities referred to in

21 such subsection; and

22 (D)(i) review, and advise the Chief Execu23 tive Project Officer regarding, the actions of the

24 Chief Executive Project Officer with respect to

25 the personnel of the governing board, and with
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1 respect to such standards, policies, procedures,

2 and activities as are necessary or appropriate

3 to carry out this section; and

4 (ii) inform the Chief Executive Project Of5 ficer of any aspects of the actions of the Chief

6 Executive Project Officer that are not in com7 pliance with the annual strategic plan referred

8 to in subparagraph (B) or the proposal referred

9 to in subparagraph (C), or are not consistent

10 with the objectives of this section.

11 (h) CHIEF EXECUTIVE PROJECT DIRECTOR AND

12 PERSONNEL.—

13 (1) IN GENERAL.—

14 (A) CHIEF EXECUTIVE PROJECT DIREC15 TOR.—The chief executive officer of an organi16 zation that receives a grant under subsection

17 (b) shall appoint, compensate, and terminate

18 the employment of a Chief Executive Project

19 Officer to enable the governing board to per20 form its duties. The chief executive officer of

21 the organization shall consult with the govern22 ing board before appointing, changing the com23 pensation of, or terminating the employment of,

24 the Chief Executive Project Officer.
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1 (B) PERSONNEL.—The Chief Executive

2 Project Officer shall appoint, compensate, and

3 terminate the employment of such additional

4 personnel as may be necessary to enable the

5 governing board to perform its duties.

6 (2) DUTIES OF CHIEF EXECUTIVE PROJECT OF7 FICER.—The Chief Executive Project Officer shall—

8 (A) prepare and submit to the governing

9 board and the chief executive officer of the or10 ganization a strategic plan every 3 years, and

11 annual updates of the plan, with respect to the

12 development and major operations of the infra13 structure;

14 (B)(i) prepare and submit to the governing

15 board and the chief executive officer of the or16 ganization a proposal with respect to such con17 tracts and other financial assistance, and such

18 standards, policies, procedures, and activities,

19 as are necessary or appropriate to carry out

20 this section; and

21 (ii) after receiving and reviewing an ap22 proved proposal under subsection (g)(3)(C),

23 enter into such contracts and award such other

24 financial assistance, and establish and admin25 ister such standards, policies, procedures and
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1 activities, as are necessary or appropriate to

2 carry out this section;

3 (C) prepare and submit to the governing

4 board and the chief executive officer of the or5 ganization an annual report, and such interim

6 reports as may be necessary, describing the

7 major actions of the Chief Executive Project

8 Officer with respect to the personnel of the gov9 erning board, and with respect to the stand10 ards, policies, procedures, and activities; and

11 (D) inform the governing board and the

12 chief executive officer of the organization of,

13 and provide an explanation to the governing

14 board regarding, any substantial differences re15 garding the implementation of this section

16 between—

17 (i) the actions of the Chief Executive

18 Project Officer; and

19 (ii)(I) the strategic plan approved by

20 the governing board and the chief executive

21 officer of the organization under subsection

22 (g)(3)(B); or

23 (II) the proposal approved by the gov24 erning board and the chief executive officer
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1 of the organization under subsection

2 (g)(3)(C).

3 (i) CORPORATION.—The organization may establish

4 a nonprofit corporation containing the governing board,

5 Chief Executive Project Officer, and personnel, to carry

6 out this section.

7 (j) ADMINISTRATIVE COSTS.—Prior to the date on

8 which the organization disseminates training at 75 percent

9 of the sites described in the information submitted under

10 subsection (e)(1), the organization may use not more than

11 25 percent of the funds made available through the grant

12 to pay for the administrative costs of carrying out this

13 section. Effective on that date, the organization may use

14 not more than 15 percent of the funds to pay for the ad15 ministrative costs.

16 (k) AUTHORIZATION OF APPROPRIATIONS.—There is

17 authorized to be appropriated to carry out this section

18 $50,000,000 for each of fiscal years 2000 through 2004.

19 SEC. 223. CHILD CARE TRAINING REVOLVING FUND.

20 (a) ESTABLISHMENT.—

21 (1) IN GENERAL.—The Chief Executive Project

22 Officer described in section 222(h) shall use not less

23 than 10 percent of the funds made available through

24 the grant made under section 222 during the 5

25 years after the date of receipt of the grant to estab-
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1 lish and operate a child care training revolving fund

2 (referred to in this section as the ‘‘Fund’’)—

3 (A) from which the Chief Executive

4 Project Officer shall make loans to eligible bor5 rowers for the purpose of enabling the persons

6 to purchase computers, satellite dishes, and

7 other equipment that will be used to dissemi8 nate training through the infrastructure de9 scribed in section 222; and

10 (B) into which all payments, charges, and

11 other amounts collected from loans made under

12 subparagraph (A) shall be deposited notwith13 standing any other provision of law.

14 (2) SEPARATE ACCOUNT.—The Fund shall be

15 maintained as a separate account. Any portion of

16 the Fund that is not required for expenditure shall

17 be invested in obligations of the United States or in

18 obligations guaranteed or insured by the United

19 States.

20 (3) INTEREST EARNED.—The interest earned

21 on the investments shall be credited to and form a

22 part of the Fund.

23 (b) ELIGIBLE BORROWERS.—To be eligible to receive

24 a loan under subsection (a), a borrower shall be a child

25 care provider who seeks to receive training through the
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1 infrastructure or an entity that has entered into an ar2 rangement with the Chief Executive Project Officer to pro3 vide a training site (as defined in section 222) for the in4 frastructure.

5 (c) APPLICATION.—To be eligible to receive a loan

6 under subsection (a), a borrower shall submit an applica7 tion to the Chief Executive Project Officer at such time,

8 in such manner, and containing such information as the

9 Chief Executive Project Officer, in consultation with the

10 governing board and the chief executive officer of an orga11 nization receiving a grant under section 222(b) may re12 quire. At a minimum, the application shall include—

13 (1) an assurance that the person shall use the

14 equipment funded through the loan to receive or dis15 seminate training through the infrastructure, for

16 such period as the Secretary may by regulation pre17 scribe; and

18 (2) an assurance that the person shall permit

19 other persons to use the equipment to receive or dis20 seminate training through the infrastructure, for

21 such period as the Secretary may by regulation pre22 scribe.

23 (d) LOANS.—In making loans under subsection (a),

24 the Chief Executive Project Officer shall—
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1 (1) to the maximum extent practicable, equi2 tably distribute the loans among borrowers in the

3 various States, and among borrowers in urban, sub4 urban, and rural areas; and

5 (2) take into consideration the availability to

6 the borrowers of resources from sources other than

7 the Fund, including the availability of resources

8 through the partnerships described in section

9 222(c)(1).

10 (e) TERMS AND CONDITIONS.—

11 (1) CONDITIONS.—The Chief Executive Project

12 Officer may make a loan to a borrower under sub13 section (a) only if the Chief Executive Project Offi14 cer determines that—

15 (A) the borrower is unable to obtain re16 sources from other sources on reasonable terms

17 and conditions; and

18 (B) there is a reasonable prospect that the

19 borrower will repay the loan.

20 (2) TERMS.—A loan made under subsection (a)

21 shall be—

22 (A) for a term that does not exceed 4

23 years; and

24 (B) at no interest.
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1 (3) COLLATERAL.—The Chief Executive Project

2 Officer may require any borrower of a loan made

3 under subsection (a) to provide such collateral as the

4 Chief Executive Project Officer determines to be

5 necessary to secure the loan.

6 (4) PROCEDURES AND DEFINITIONS.—Prior to

7 making loans under subsection (a), the Chief Execu8 tive Project Officer shall establish written proce9 dures and definitions pertaining to defaults and col10 lections of payments under the loans which shall be

11 subject to the review and approval of the Secretary.

12 The governing board and chief executive officer of

13 the organization involved shall provide to each appli14 cant for a loan under subsection (a), at the time ap15 plication for the loan is made, a written copy of the

16 procedures and definitions.

17 (f) DEFAULTS.—

18 (1) NOTICE.—The Chief Executive Project Offi19 cer shall provide the governing board and the chief

20 executive officer of the organization at regular inter21 vals written notice of each loan made under sub22 section (a) that is in default and the status of the

23 loan.

24 (2) ACTION.—
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1 (A) NOTIFICATION.—After making reason2 able efforts to collect all amounts payable under

3 a loan made under subsection (a) that is in de4 fault, the Chief Executive Project Officer shall

5 notify the governing board and the chief execu6 tive officer of the organization that the loan is

7 uncollectable or collectible only at an unreason8 able cost. The notification shall include rec9 ommendations for future action to be taken by

10 the Chief Executive Project Director.

11 (B) INSTRUCTIONS.—On receiving the no12 tification, the governing board and the chief ex13 ecutive officer of the organization shall advise

14 the Chief Executive Project Officer—

15 (i) to continue with its collection ac16 tivities;

17 (ii) to cancel, adjust, compromise, or

18 reduce the amount of the loan; or

19 (iii) to modify any term or condition

20 of the loan, including any term or condi21 tion relating to the time of payment of any

22 installment of principal, or portion of prin23 cipal, that is payable under the loan.

24 (g) ADMINISTRATION AND ASSISTANCE.—
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1 (1) IN GENERAL.—Consistent with section

2 222(j), the Chief Executive Project Officer shall, out

3 of funds available in the Fund—

4 (A) pay expenses incurred by the Chief Ex5 ecutive Project Officer in administering the

6 Fund; and

7 (B) provide competent management and

8 technical assistance to borrowers of loans made

9 under subsection (a) to assist the borrowers to

10 achieve the purposes of the loans.

11 (2) ASSISTANCE BY THE SECRETARY.—The

12 Secretary shall provide to the chief executive officer

13 of the organization and the Chief Executive Project

14 Officer such management and technical assistance as

15 the chief executive officer of the organization and

16 the Chief Executive Project Officer may request in

17 order to carry out the provisions of this section.

18 (h) REGULATIONS.—The Secretary may prescribe

19 such regulations as may be necessary to carry out the ob20 jectives of this section, including regulations involving re21 porting and auditing.
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1 Subtitle D—Quality Child Care

2 Through Federal Facilities and

3 Programs

4 SEC. 232. PROVIDING QUALITY CHILD CARE THROUGH FED5 ERAL PROGRAMS.

6 (a) CORPORATION FOR NATIONAL AND COMMUNITY

7 SERVICE.—Effective October 1, 2003, the Chief Executive

8 Officer of the Corporation for National and Community

9 Service shall ensure that, to the maximum extent prac10 ticable, any child care made available under any Federal

11 financial assistance program carried out by the Chief Ex12 ecutive Officer, directly or through a child care allowance,

13 shall be child care provided by an accredited child care

14 center or a credentialed child care professional, as the

15 terms are defined in section 2.

16 (b) DEPARTMENTS OF EDUCATION, HOUSING AND

17 URBAN DEVELOPMENT, JUSTICE, AND LABOR.—Effective

18 October 1, 2003, the Secretary of Education, Secretary

19 of Housing and Urban Development, Attorney General,

20 and Secretary of Labor shall ensure that, to the maximum

21 extent practicable, any child care made available under

22 any Federal financial assistance program carried out by

23 the Attorney General or Secretary involved, directly or

24 through a child care allowance, shall be child care provided
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1 by an accredited child care center or a credentialed child

2 care professional, as the terms are defined in section 2.

3 (c) SOCIAL SERVICES BLOCK GRANTS.—Section

4 2002(a) of the Social Security Act (42 U.S.C. 1397a(a))

5 is amended by adding at the end the following:

6 ‘‘(3) Effective October 1, 2003, child care services

7 made available under this subsection shall, to the maxi8 mum extent practicable, be child care services provided by

9 an accredited child care center or a credentialed child care

10 professional, as the terms are defined in section 2 of the

11 CIDCARE Act.’’.

12 SEC. 233. USE OF COMMUNITY DEVELOPMENT BLOCK

13 GRANTS TO ESTABLISH ACCREDITED CHILD

14 CARE CENTERS.

15 Section 105(a) of the Housing and Community De16 velopment Act of 1974 (42 U.S.C. 5305(a)) is amended—

17 (1) in paragraph (22), by striking ‘‘and’’ at the

18 end;

19 (2) in paragraph (23), by striking the period at

20 the end and inserting a semicolon;

21 (3) in paragraph (24), by striking ‘‘and’’ at the

22 end;

23 (4) in paragraph (25), by striking the period at

24 the end and inserting ‘‘; and’’; and

25 (5) by adding at the end the following:
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1 ‘‘(26) the establishment of accredited child care

2 centers (as that term is defined in section 2 of the

3 CIDCARE Act), by upgrading existing child care fa4 cilities to meet standards for accredited child care

5 centers, or by renovating existing structures for use

6 as accredited child care centers.’’.

7 Subtitle E—Miscellaneous

8 Provisions

9 SEC. 241. STUDENT LOAN REPAYMENT AND CANCELLATION

10 FOR CHILD CARE WORKERS.

11 (a) STAFFORD LOAN REPAYMENT.—Section 428J of

12 the Higher Education Act of 1965 (20 U.S.C. 1078–10)

13 is amended—

14 (1) in the section heading by striking ‘‘AND

15 NURSES’’ and inserting ‘‘, NURSES AND CHILD

16 CARE WORKERS’’;

17 (2) in subsection (a)(1), by striking ‘‘and nurs18 ing profession’’ and inserting ‘‘, nursing and child

19 care professions’’;

20 (3) in subsection (b)(1)—

21 (A) in subparagraph (B)(ii), by striking

22 ‘‘or’’ after the semicolon;

23 (B) in subparagraph (C), by striking the

24 period and inserting ‘‘; or’’; and

25 (C) by adding at the end the following:
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1 ‘‘(D) is employed full time providing child

2 care services, and possesses a certificate or de3 gree in early childhood education or develop4 ment.’’; and

5 (4) in subsection (g)—

6 (A) in paragraph (1), by striking ‘‘and

7 community service’’ and inserting ‘‘community

8 service, and child care’’; and

9 (B) in paragraph (3)—

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

11 ‘‘and community service’’ and inserting

12 ‘‘community service, and child care’’; and

13 (ii) in subparagraph (D), by striking

14 ‘‘and community service’’ and inserting

15 ‘‘community service, and child care’’.

16 (b) PERKINS LOAN CANCELLATION.—Section

17 465(a)(2) of the Higher Education Act of 1965 (20 U.S.C.

18 1087ee(a)(2)) is amended—

19 (1) in subparagraph (H), by striking ‘‘or’’ after

20 the semicolon;

21 (2) in subparagraph (I), by striking the period

22 and inserting ‘‘; or’’; and

23 (3) by inserting after subparagraph (I) the fol24 lowing:
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1 ‘‘(J) as a full-time employee who provides

2 child care services and possesses a certificate or

3 degree in early childhood education or develop4 ment.’’.

5 SEC. 242. EXPANSION OF COORDINATED ENFORCEMENT

6 EFFORTS OF INTERNAL REVENUE SERVICE

7 AND HHS OFFICE OF CHILD SUPPORT EN8 FORCEMENT.

9 (a) STATE REPORTING OF CUSTODIAL DATA.—Sec10 tion 454A(e)(4)(D) of the Social Security Act (42 U.S.C.

11 654(e)(4)(D)) is amended by striking ‘‘the birth date of

12 any child’’ and inserting ‘‘the birth date and custodial sta13 tus of any child’’.

14 (b) MATCHING PROGRAM BY IRS OF CUSTODIAL

15 DATA AND TAX STATUS INFORMATION.—

16 (1) NATIONAL DIRECTORY OF NEW HIRES.—

17 Section 453(i)(3) of the Social Security Act (42

18 U.S.C. 653(i)(3)) is amended by striking ‘‘a claim

19 with respect to employment in a tax return’’ and in20 serting ‘‘information which is required on a tax re21 turn’’.

22 (2) FEDERAL CASE REGISTRY OF CHILD SUP23 PORT ORDERS.—Section 453(h) of the such Act (42

24 U.S.C. 653(h)) is amended by adding at the end the

25 following:
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1 ‘‘(3) ADMINISTRATION OF FEDERAL TAX

2 LAWS.—The Secretary of the Treasury shall have

3 access to the information described in paragraph

4 (2), consisting of the names and social security num5 bers of the custodial parents linked with the children

6 in the custody of such parents, for the purpose of

7 administering those sections of the Internal Revenue

8 Code of 1986 which grant tax benefits based on sup9 port and residence provided dependent children.’’

10 (c) MINIMUM PAST-DUE SUPPORT THRESHOLD FOR

11 USE OF OFFSET PROCEDURE.—

12 (1) PART D FAMILIES.—Section 464(b)(1) of

13 the Social Security Act (42 U.S.C. 664(b)(1)) is

14 amended by inserting ‘‘(not to exceed $150)’’ after

15 ‘‘minimum amount’’.

16 (2) OTHER FAMILIES.—Section 464(b)(2)(A) of

17 such Act (42 U.S.C. 664(b)(2)(A)) is amended by

18 striking ‘‘$500’’ both places it appears and inserting

19 ‘‘$150’’.

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

21 this section shall take effect on October 1, 1999.

Æ