```

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 143 Introduced in House (IH)]

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.

    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 ``Creating Improved 
Delivery of Child Care: Affordable, Reliable, and Educational Act'' or 
as the ``CIDCARE Act''.
    (b) Table of Contents.--The table of contents of 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.
                  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.

SEC. 2. DEFINITIONS.

    In this Act:
            (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; tribal organization.--The terms ``State'' and 
        ``tribal organization'' have the meaning given the term in 
section 658P of the Child Care and Development Block Grant Act (42 
U.S.C. 9858n).

                 TITLE I--DEMAND FOR QUALITY CHILD CARE

SEC. 101. EXPANSION OF DEPENDENT CARE TAX CREDIT.

    (a) Percentage of Employment-Related Expenses Determined by Status 
of Care Giver.--Section 21(a)(2) of the Internal Revenue Code of 1986 
(defining applicable percentage) is amended to read as follows:
            ``(2) Applicable percentage defined.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `applicable percentage' means--
                            ``(i) in the case of employment-related 
                        expenses described in subsection (b)(2)(A)(ii) 
                        incurred for the care of a qualifying 
                        individual described in subsection (b)(1)(A) by 
                        an accredited child care center or a 
                        credentialed child care professional, the 
                        initial percentage reduced (but not below 12.5 
                        percent) ratably for each $2,500 (or fraction 
                        thereof) by which the taxpayers's adjusted 
                        gross income for the taxable year exceeds 
                        $20,000, and
                            ``(ii) in any other case, 30 percent 
                        reduced (but not below 10 percent) ratably for 
                        each $2,500 (or fraction thereof) by which the 
                        taxpayers's adjusted gross income for the 
                        taxable year exceeds $20,000 but does not 
                        exceed $70,000.
                    ``(B) Initial percentage for expenses incurred for 
                accredited or credentialed providers.--For purposes of 
                subparagraph (A)(i), the initial percentage shall be 
                determined in accordance with the following table:

``In the case of any taxable year   The initial percentage is--
        beginning in--
    1998..........................................                31.5 
    1999..........................................                  33 
    2000..........................................                34.5 
    2001..........................................                  36 
    2002 and thereafter...........................              37.5.''
    (b) Definitions.--Section 21(b)(2) of the Internal Revenue Code of 
1986 (relating to definitions of qualifying individual and employment-
related expenses) is amended by adding at the end the following:
                    ``(E) Accredited child care center.--The term 
                `accredited child care center' means--
                            ``(i) 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 clause (ii));
                            ``(ii) 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;
                            ``(iii) 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
                            ``(iv) a military child development center 
                        (as defined in section 1798(1) of title 10, 
                        United States Code).
                    ``(F) Child care credentialing or accreditation 
                entity.--The term `child care credentialing or 
                accreditation entity' means a nonprofit private 
organization or public agency that--
                            ``(i) is recognized by a State agency or 
                        tribal organization; and
                            ``(ii) 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--
                                            ``(aa) compliance with age-
                                        appropriate health and safety 
                                        standards at the center or by 
                                        the individual;
                                            ``(bb) 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
                                            ``(cc) use of ongoing staff 
                                        development or training 
                                        activities for the staff of the 
                                        center or the individual, 
                                        including related skills-based 
                                        testing.
                    ``(G) Credentialed child care professional.--The 
                term `credentialed child care professional' means--
                            ``(i) 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 clause (i)); 
                        or
                            ``(ii) 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.
                    ``(H) Tribal organization.--The term `tribal 
                organization' has the meaning given the term in section 
658P of the Child Care and Development Block Grant Act (42 U.S.C. 
9858n).''
    (c) Credit Made Refundable for Low Income Taxpayers.--
            (1) In general.--Section 21 of the Internal Revenue Code of 
        1986 (relating to credit for household and dependent care 
        services) is amended by redesignating subsection (f) as 
        subsection (g) and by inserting after subsection (e) the 
        following:
    ``(f) Credit Made Refundable for Low Income Taxpayers.--
            ``(1) In general.--For purposes of this subtitle, in the 
        case of an applicable taxpayer individual, the credit allowable 
        under subsection (a) for any taxable year shall be treated as a 
        credit allowable under subpart C of this part.
            ``(2) Applicable taxpayer.--For purposes of this 
        subsection, the term `applicable taxpayer' means a taxpayer 
        with respect to whom the credit under section 32 is allowable 
        for the taxable year.
            ``(3) Coordination with advance payments and minimum tax.--
        Rules similar to the rules of subsections (g) and (h) of 
        section 32 shall apply with respect to the portion of any 
        credit to which this subsection applies.''.
            (2) Advance payment of credit.--
                    (A) In general.--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 21 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,
            ``(6) states whether a qualifying individual will be cared 
        for by an accredited child care center or a credentialed child 
        care professional, and
            ``(7) 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 21 shall have the respective 
meanings given such terms by section 21.''.
                    (B) Conforming amendment.--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.''.

    (d) Effective Dates.--
            (1) Applicable percentage.--The amendments made by 
        subsections (a) and (b) shall apply to taxable years beginning 
        after December 31, 1999.
            (2) Credit made refundable.--The amendments made by 
        subsection (c) shall apply to taxable years beginning after 
        December 31, 2000.

SEC. 102. EXPANSION OF DEPENDENT CARE ASSISTANCE PROGRAM.

    (a) In General.--Section 129(a)(2)(A) of the Internal Revenue Code 
of 1986 (relating to limitation of exclusion) is amended to read as 
follows:
                    ``(A) Dollar limitation.--
                            ``(i) In general.--The amount which may be 
                        excluded under paragraph (1) for dependent care 
                        assistance with respect to dependent care 
                        services provided during a taxable year shall 
                        not exceed--
                                    ``(I) in the case of dependent care 
                                services provided by an accredited 
                                child care center or a credentialed 
                                child care professional for a 
                                qualifying individual described in 
                                section 21(b)(1)(A), an amount 
                                determined in accordance with the 
                                following table:
      

 
 
                                                         For 2 or more
                ``In the case of     For 1 qualifying      qualifying
                 taxable years       individual, the    individuals, the
                 beginning in:          amount is:         amount is:
 
                 1998                     $5,200             $6,700
                 1999                     $5,400             $6,900
                 2000                     $5,600             $7,100
                 2001                     $5,800             $7,300
                 2002 and                 $6,000            $7,500,
              thereafter
 

                                    ``(II) in the case of other 
                                dependent care services for a 
                                qualifying individual described in 
                                section 21(b)(1)(A) or payments 
                                described in subsection (e)(1)(B), an 
                                amount determined in accordance with 
                                the following table:
      

 
 
                                                         For 2 or more
                ``In the case of     For 1 qualifying      qualifying
                 taxable years       individual, the    individuals, the
                 beginning in:          amount is:         amount is:
 
                 1998                     $4,800             $6,300
                 1999                     $4,600             $6,100
                 2000                     $4,400             $5,900
                 2001                     $4,200             $5,700
                 2002 and                 $4,000            $5,500,
              thereafter
 

                                and
                                    ``(III) in the case of other 
                                dependent care services for a 
                                qualifying individual described in 
                                subparagraph (B) or (C) of section 
                                21(b)(1), $5,000.
                            ``(ii) Amounts for married individuals 
                        filing separate returns.--In the case of a 
                        separate return by a married individual, clause 
(i) shall be applied by using one-half of any amount specified in such 
clause.
                            ``(iii) Providers.--For purposes of clause 
                        (i)(I), the terms `accredited child care 
                        center' and `credentialed child care 
                        professional' have the meaning given such terms 
                        by subparagraphs (E) and (G) of section 
                        21(c)(2), respectively.
    (b) Payments for Stay-at-Home Care Allowed.--
            (1) In general.--Section 129(e)(1) of the Internal Revenue 
        Code of 1986 (relating to definitions and special rules) is 
        amended to read as follows:
            ``(1) Dependent care assistance.--The term `dependent care 
        assistance' means--
                    ``(A) the payment of, or provision of, those 
                services which if paid for by the employee would be 
                considered employment-related expenses under section 
                21(b)(2) (relating to expenses for household and 
                dependent care services necessary for gainful 
                employment), and
                    ``(B) any payment to the employee from amounts 
                contributed to the employee's account during the 
                pregnancy of the employee paid within 1 year after such 
                contribution and during the period in which--
                            ``(i) the employee,
                            ``(ii) the employee's spouse, or
                            ``(iii) a parent of the employee or the 
                        employee's spouse,
                stays at home to care for a qualifying individual 
                described in section 21(b)(1)(A).''.
            (2) Conforming amendments.--
                    (A) Section 129(c) of such Code (relating to 
                payments to related individuals) is amended by striking 
                ``No amount'' and inserting ``Except in the case of 
                payments described in subsection (e)(1)(B), no 
                amount.''.
                    (B) Section 129(e)(9) of such Code (relating to 
                identifying information required with respect to 
                service provider) is amended by striking ``No amount'' 
                and inserting ``Except in the case of payments 
                described in paragraph (1)(B)(i), no amount.''.
    (c) Dependent Care Assistance Program for Federal Employees.--
Subpart G of part III of title 5, United States Code, is amended by 
inserting after chapter 87 the following:

            ``CHAPTER 88--DEPENDENT CARE ASSISTANCE PROGRAM

``Sec. 8801. Definitions
    ``(a) For the purpose of this chapter, `employee' means--
            ``(1) an employee as defined by section 2105 of this title;
            ``(2) a Member of Congress as defined by section 2106 of 
        this title;
            ``(3) a Congressional employee as defined by section 2107 
        of this title;
            ``(4) the President;
            ``(5) a justice or judge of the United States appointed to 
        hold office during good behavior (i) who is in regular active 
        judicial service, or (ii) who is retired from regular active 
        service under section 371(b) or 372(a) of title 28, United 
        States Code, or (iii) who has resigned the judicial office 
        under section 371(a) of title 28 with the continued right 
        during the remainder of his lifetime to receive the salary of 
        the office at the time of his resignation;
            ``(6) an individual first employed by the government of the 
        District of Columbia before October 1, 1987;
            ``(7) an individual employed by Gallaudet College;
            ``(8) an individual employed by a county committee 
        established under section 590h(b) of title 16;
            ``(9) an individual appointed to a position on the office 
        staff of a former President under section 1(b) of the Act of 
        August 25, 1958 (72 Stat. 838); and
            ``(10) an individual appointed to a position on the office 
        staff of a former President, or a former Vice President under 
        section 4 of the Presidential Transition Act of 1963, as 
        amended (78 Stat. 153), who immediately before the date of such 
        appointment was an employee as defined under any other 
        paragraph of this subsection;
but does not include--
            ``(A) an employee of a corporation supervised by the Farm 
        Credit Administration if private interests elect or appoint a 
        member of the board of directors;
            ``(B) an individual who is not a citizen or national of the 
        United States and whose permanent duty station is outside the 
        United States, unless the individual was an employee for the 
        purpose of this chapter on September 30, 1979, by reason of 
        service in an Executive agency, the United States Postal 
Service, or the Smithsonian Institution in the area which was then 
known as the Canal Zone; or
            ``(C) an employee excluded by regulation of the Office of 
        Personnel Management under section 8716(b) of this title.
    ``(b) For the purpose of this chapter, `dependent care assistance 
program' has the meaning given such term by section 129(d) of the 
Internal Revenue Code of 1986.
``Sec. 8802. Dependent care assistance program
    ``The Office of Personnel Management shall establish and maintain a 
dependent care assistance program for the benefit of employees.''.
    (d) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1999.

SEC. 103. INCLUSION OF CHILD CARE COSTS IN CHILD SUPPORT ORDERS.

    (a) In General.--Section 466(a) of the Social Security Act (42 
U.S.C. 666(a)) is amended by inserting after paragraph (19) the 
following:
            ``(20) Child care costs.--
                    ``(A) In general.--Procedures under which all child 
                support orders enforced under this part shall include 
                in the case of a custodial parent who is employed or is 
                actively seeking employment an amount equal to or more 
                than the applicable payment rate for the type of child 
                care services provided to that parent's child or 
                children that is established in accordance with section 
                658E(c)(4) of the Child Care and Development Block 
                Grant Act of 1990 (42 U.S.C. 9858c(c)(4)), increased by 
                50 percent of such rate if such services are provided 
                by an accredited child care center or a credentialed 
                child care professional.
                    ``(B) Definitions.--In this paragraph, the terms 
                `accredited child care center' and `credentialed child 
                care professional' have the meaning given those terms 
                in section 2 of the CIDCARE Act.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to child support orders enforced or otherwise modified by a court on 
and after the date of enactment of this Act.

                 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.

    (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 new section:

``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 50 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.--The term 
        `qualified child care expenditure' means any amount paid or 
        incurred--
                    ``(A) 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,
                    ``(B) for the operating costs of a qualified child 
                care facility of the taxpayer, including costs related 
                to the training of employees, to scholarship programs, 
                and to the providing of increased compensation to 
                employees with higher levels of child care training,
                    ``(C) under a contract with a qualified child care 
                facility to provide child care services to employees of 
                the taxpayer,
                    ``(D) under a contract to provide child care 
                resource and referral services to employees of the 
                taxpayer, or
                    ``(E) for the costs of seeking accreditation from a 
                child care credentialing or accreditation entity (as 
                defined in section 21(b)(2)(F) with respect to a 
                qualified child care facility.
            ``(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 use of such facility (or the 
                        eligibility to use such facility) does not 
                        discriminate in favor of employees of the 
                        taxpayer who are highly compensated employees 
                        (within the meaning of section 414(q)).
    ``(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.
    ``(g) Termination.--This section shall not apply to taxable years 
beginning after December 31, 1999.''
    (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, 1999.

SEC. 202. CHARITABLE CONTRIBUTIONS OF SCIENTIFIC EQUIPMENT TO 
              ACCREDITED AND CREDENTIALED CHILD CARE PROVIDERS AND TO 
              ELEMENTARY AND SECONDARY SCHOOLS.

    (a) In General.--Subparagraph (B) of section 170(e)(4) of the 
Internal Revenue Code of 1986 (relating to special rule for 
contributions of scientific property used for research) is amended to 
read as follows:
                    ``(B) Qualified research, child care, or education 
                contribution.--For purposes of this paragraph, the term 
                `qualified research, child care, or education 
                contribution' means a charitable contribution by a 
                corporation of tangible personal property (including 
                computer software), but only if--
                            ``(i) the contribution is to--
                                    ``(I) an organization described in 
                                section 501(c)(3) and exempt from 
                                taxation under section 501(a) which is 
                                an accredited child care center (as 
                                defined in section 21(c)(2)(E)) or a 
                                child care center actively seeking 
                                accreditation or certification of its 
                                employees by a child care credentialing 
                                or accreditation entity (as defined 
in section 21(c)(2)(F)) on the date of such contribution,
                                    ``(II) an organization described in 
                                section 501(c)(3) and exempt from 
                                taxation under section 501(a) which is 
                                a professional or educational support 
                                entity for accredited child care 
                                centers or credentialed child care 
                                professionals (as defined in 
                                subparagraphs (E) and (G) of section 
                                21(c)(2), respectively),
                                    ``(III) an educational organization 
                                described in subsection (b)(1)(A)(ii),
                                    ``(IV) a governmental unit 
                                described in subsection (c)(1), or
                                    ``(V) an organization described in 
                                section 41(e)(6)(B),
                            ``(ii) the contribution is made not later 
                        than 3 years after the date the taxpayer 
                        acquired the property (or in the case of 
                        property constructed by the taxpayer, the date 
                        the construction of the property is 
                        substantially completed),
                            ``(iii) the property is scientific 
                        equipment or apparatus substantially all of the 
                        use of which by the donee is for--
                                    ``(I) research or experimentation 
                                (within the meaning of section 174), or 
                                for research training, in the United 
                                States in physical or biological 
                                sciences, or
                                    ``(II) in the case of an 
                                organization described in subclause 
                                (I), (II), (III), or (IV) of clause 
                                (i), use within the United States for 
                                educational purposes or support 
                                activities related to the purpose or 
                                function of the organization,
                            ``(iv) the original use of the property 
                        began with the taxpayer (or in the case of 
                        property constructed by the taxpayer, with the 
                        donee),
                            ``(v) the property is not transferred by 
                        the donee in exchange for money, other 
                        property, or services, and
                            ``(vi) the taxpayer receives from the donee 
                        a written statement representing that its use 
                        and disposition of the property will be in 
                        accordance with the provisions of clauses (iv) 
                        and (v).''.
    (b) Donations to Charity for Refurbishing.--Section 170(e)(4) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following:
                    ``(D) Donations to charity for refurbishing.--For 
                purposes of this paragraph, a charitable contribution 
                by a corporation shall be treated as a qualified 
                research, child care, or education contribution if--
                            ``(i) such contribution is a contribution 
                        of property described in subparagraph (B)(iii) 
                        to an organization described in section 
                        501(c)(3) and exempt from taxation under 
                        section 501(a),
                            ``(ii) such organization repairs and 
                        refurbishes the property and donates the 
                        property to an organization described in 
                        subparagraph (B)(i), and
                            ``(iii) the taxpayer receives from the 
                        organization to whom the taxpayer contributed 
                        the property a written statement representing 
                        that its use of the property (and any use by 
                        the organization to which it donates the 
                        property) meets the requirements of this 
                        paragraph.''.
    (c) Conforming Amendments.--
            (1) Paragraph (4)(A) of section 170(e) of the Internal 
        Revenue Code of 1986 is amended by striking ``qualified 
        research contribution'' each place it appears and inserting 
        ``qualified research, child care, or education contribution''.
            (2) The heading for section 170(e)(4) of such Code is 
        amended by inserting ``, child care, or education'' after 
        ``research''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 203. 2-PERCENT FLOOR ON MISCELLANEOUS ITEMIZED DEDUCTIONS NOT 
              APPLICABLE TO ACCREDITATION AND CREDENTIALING EXPENSES OF 
              CHILD CARE PROVIDERS.

    (a) In General.--Section 67(b) of the Internal Revenue Code of 1986 
(relating to miscellaneous itemized deductions) is amended by striking 
``and'' at the end of paragraph (11), by striking the period at the end 
of paragraph (12) and inserting ``, and'', and by adding at the end the 
following:
            ``(13) the deduction allowable for accreditation and 
        credentialing expenses of child care providers.''.
    (b) Definition.--Section 67 of the Internal Revenue Code of 1986 
(relating to 2-percent floor on miscellaneous itemized deductions) is 
amended by redesignating subsections (e) and (f) as subsections (f) and 
(g), respectively, and by inserting after subsection (d) the following:
    ``(e) Accreditation and Credentialing Expenses of Child Care 
Providers.--For purposes of this section--
            ``(1) In general.--The term `accreditation and 
        credentialing expenses of child care providers' means direct 
        professional costs and educational and training expenses paid 
        or incurred by an eligible individual in order to achieve and 
        remain qualified for service as an employee of an accredited 
        child care center or as a credentialed child care professional 
        (as defined in subparagraphs (E) and (G) of section 21(c)(2), 
        respectively).
            ``(2) Eligible individual.--The term `eligible individual' 
        means an individual 60 percent of the taxable income of whom 
        for any taxable year is derived from service described in 
        paragraph (1).''.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 204. EXPANSION OF HOME OFFICE DEDUCTION TO INCLUDE USE OF OFFICE 
              FOR DEPENDENT CARE.

    (a) In General.--Section 280A(c)(1) of the Internal Revenue Code of 
1986 (relating to certain business use) is amended by adding at the end 
the following: ``A portion of a dwelling unit and the exclusive use of 
such portion otherwise described in this paragraph shall not fail to be 
so described if such portion is also used by the taxpayer during such 
exclusive use to care for a dependent of the taxpayer.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

      Subtitle B--Child Care Quality Improvement Incentive Program

SEC. 211. DEFINITIONS.

    In this subtitle:
            (1) Child care provider.--The term ``child care provider'' 
        means--
                    (A) a center-based child care provider, a group 
                home child care provider, a family child care provider, 
                or other provider of non-residential child care 
                services for compensation that--
                            (i) is licensed, regulated, registered, or 
                        otherwise legally operating under State law; 
                        and
                            (ii) satisfies the State and local 
                        requirements;
                applicable to the child care services it provides; or
                    (B) a child care provider that is 18 years of age 
                or older who provides child care services only to 
                eligible children who are, by affinity or 
                consanguinity, or by court decree, the grandchild, 
                great grandchild, sibling (if such provider lives in a 
                separate residence), niece, or nephew of such provider, 
                if such provider does not reside with the child for 
                whom they are providing care and if the provider 
                complies with any applicable requirements that govern 
                child care provided by the relative involved.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 212. ESTABLISHMENT OF STATE PROGRAM.

    (a) In General.--The Secretary shall establish a program to award 
competitive grants to eligible States to enable such States to carry 
out activities to improve the quality of child care for children in the 
States (except children who a tribal organization elects to serve under 
section 215(b)).
    (b) Awarding of Grants.--
            (1) Distribution.--Amounts appropriated for a fiscal year 
        under section 215(a) shall be distributed through competitive 
        grants awarded to eligible States that apply for funds and that 
        propose activities that meet the requirements of this subtitle.
            (2) Amount.--The amount of a grant awarded to a State under 
        this section shall be determined by the Secretary on a 
        competitive basis, except that the amount of any such grant for 
        a fiscal year shall not be less than an amount equal to .75 
        percent of the total amount appropriated for the fiscal year 
        under section 215(a).
    (c) Limitation on Administrative Costs.--The Secretary shall not 
use in excess of 10 percent of the amount appropriated under section 
215(a) for a fiscal year for the administrative costs associated with 
the administration of the program under this section.

SEC. 213. STATE ELIGIBILITY AND APPLICATION REQUIREMENTS.

    (a) Eligibility.--To be eligible to receive a grant under this 
subtitle, a State shall certify to the Secretary that the State--
            (1) has not reduced the scope of any State child care 
        standards or requirements that were in effect in calendar year 
        1995;
            (2) has not limited the State licensing requirements with 
        respect to the types of providers that must obtain licenses in 
        order to provide child care in the State as compared to the 
        types of providers that were required to obtain licenses in 
        calendar year 1995;
            (3) has not otherwise restricted the application of State 
        child care licensing requirements that were in effect in 
        calendar year 1995;
            (4) is in compliance with the requirements applicable to 
        the State under the Child Care and Development Block Grant Act 
        of 1990 (42 U.S.C. 9801 et seq.); and
            (5) has, with respect to the fiscal year involved, made 
        available sufficient State matching funds to draw down at least 
        80 percent of the amount awarded to the State for the preceding 
        fiscal year under a grant under section 418(a)(2) of the Social 
        Security Act (42 U.S.C. 618).
    (b) Priority.--In awarding grants under this subtitle, the 
Secretary shall give priority to States that contribute an amount 
(generated from businesses or other private sources) equal to not less 
than 10 percent of the amount requested under the grant to the 
activities to be funded under the grant.
    (c) Application.--To be eligible to receive a grant under this 
subtitle, a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary shall require, including--
            (1) an assurance that the State will comply with the 
        requirements applicable to States under this subtitle;
            (2) an assurance that the State will annually conduct on-
        site monitoring of State licensed or regulated child care 
        facilities, with at least 1 unannounced monitoring visit of 
        each such facility every 3 years; and
            (3) an assurance that the State will not use funds received 
        under the grant to supplant or replace funds used by the State 
        to improve the quality or increase the supply of child care as 
        required under section 658G of the Child Care and Development 
        Block Grants Act of 1990 (42 U.S.C. 9858e).

SEC. 214. USE OF FUNDS BY STATES.

    (a) Required Activities.--A State shall--
            (1) use not less than 20 percent of the amounts received 
        under a grant awarded to the State under this subtitle to 
        establish a subsidy program to provide funds to child care 
        providers who are credentialed in the State (as described in 
        section 2(3));
            (2) use not less than 20 percent of the amounts received 
        under a grant awarded to the State under this subtitle to 
        establish a grant program to assist small businesses located in 
        the State in establishing and operating child care programs 
        that may include--
                    (A) technical assistance in the establishment of a 
                child care program;
                    (B) assistance for the start-up costs related to a 
                child care program;
                    (C) assistance for the training of child care 
                providers;
                    (D) scholarships for low-income wage earners;
                    (E) the provision of services to care for sick 
                children or to provide care to school aged children;
                    (F) the entering into of contracts with local 
                resource and referral or local health departments;
                    (G) assistance for any other activity determined 
                appropriate by the State; or
                    (H) care for children with disabilities; and
            (3) use amounts remaining after the State reserves funds 
        for activities under paragraphs (1) and (2) to carry out one or 
        more of the activities described in subsection (b).
    (b) Permissible Activities.--A State may use amounts provided under 
a grant awarded under this subtitle to the State to--
            (1) improve parental choice through consumer education 
        efforts in the State concerning child care, including the 
        expansion of resource and referral services and improving State 
        child care complaint systems;
            (2) establish a scholarship program for child care 
        providers to assist in meeting the educational or training 
        costs associated with the accreditation or credentialing;
            (3) expand State-based child care training and technical 
        assistance activities;
            (4) develop criteria for State recognition of entities to 
        accredit facilities, and credential child care providers, in 
        the State, as described in section 2;
            (5) provide increased rates of reimbursement under Federal 
        or State child care assistance programs for child care that is 
        provided by credentialed child care professionals or at 
        accredited child care centers;
            (6) provide differential rates of reimbursement under 
        Federal or State child care assistance programs for children 
        with special needs; or
            (7) purchase special equipment or supplies or provide for 
        the payment of other extraordinary expenses required for the 
        care of special needs (including disabled) children and the 
        distribution of such equipment or supplies to child care 
        providers serving special needs children.
    (c) Small Business and Child Care Grant Program.--
            (1) Application.--To be eligible to receive assistance from 
        a State under a grant program established under subsection 
        (a)(2), a small business shall prepare and submit to the State 
        an application at such time, in such manner, and containing 
        such information as the State may require.
            (2) Preference.--
                    (A) In general.--In providing assistance under a 
                grant program under this subsection, a State shall give 
                priority to applicants that desire to form consortium 
                to provide child care in geographic areas within the 
                State where such care is not generally available or 
                accessible.
                    (B) Consortium.--For purposes of subparagraph (A), 
                a consortium shall be made up of 2 or more entities 
                which may include businesses, nonprofit agencies or 
                organizations, local governments, or other appropriate 
                entities.
            (3) Limitation.--With respect to grant funds received for 
        purposes of this subsection, a State may not provide in excess 
        of $50,000 in assistance from such funds to any single 
        applicant. A State may not provide assistance under a grant to 
        more than 10 entities.
            (4) Matching requirement.--To be eligible to receive funds 
        for purposes of establishing a grant program under subsection 
        (a)(2), a State shall provide assurances to the Secretary that, 
        with respect to the costs to be incurred by an entity receiving 
        assistance in carrying out activities under such program, such 
        entity will make available (directly or through donations from 
        public or private entities) non-Federal contributions to such 
        costs in an amount equal to--
                    (A) for the first fiscal year in which the entity 
                receives such assistance, not less than 25 percent of 
                such costs ($1 for each $3 of assistance provided to 
                the entity under the grant);
                    (B) for the second fiscal year in which an entity 
                receives such assistance, not less than 33\1/3\ percent 
                of such costs ($1 for each $2 of assistance provided to 
                the entity under the grant); and
                    (C) for the third fiscal year in which an entity 
                receives such assistance, not less than 50 percent of 
                such costs ($1 for each $1 of assistance provided to 
                the entity under the grant).
            (5) Requirements of providers.--To be eligible to receive 
        assistance under a grant awarded under this subsection a child 
        care provider shall comply with all applicable State and local 
        licensing and regulatory requirements and all applicable health 
        and safety standards in effect in the State.
            (6) Administration.--
                    (A) State responsibility.--A State shall have 
                responsibility for administering the grants awarded 
                under this subsection and for monitoring entities that 
                receive assistance under such grants.
                    (B) Audits.--A State shall require that each entity 
                receiving assistance under a grant awarded under this 
                subsection conduct of an annual audit with respect to 
                the activities of the entity. Such audits shall be 
                submitted to the State.
                    (C) Misuse of funds.--
                            (i) Repayment.--If the State determines, 
                        through an audit or otherwise, that an entity 
                        receiving assistance under a grant awarded 
                        under this subsection has misused such 
                        assistance, the State shall notify the 
                        Secretary of such misuses. The Secretary, upon 
                        such a notification, may seek from such an 
                        entity the repayment of an amount equal to the 
                        amount of any misused assistance plus interest.
                            (ii) Appeals process.--The Secretary shall 
                        by regulation provide for an appeals process 
with respect to repayments under this subparagraph.
    (d) Limitation on Administrative Costs.--Not more than 10 percent 
of the aggregate amount of funds available to a State under this 
subtitle in each fiscal year may be expended for administrative costs 
incurred by such State to carry out activities under this subtitle. As 
used in the preceding sentence, the term ``administrative costs'' shall 
not include the costs of providing direct services (as such direct 
services costs are defined for purposes of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9801 et seq.)).

SEC. 215. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated to carry 
out this subtitle $260,000,000 for each of the fiscal years 2000 
through 2004.
    (b) Reservation.--The Secretary shall reserve not more than 1.5 
percent of the funds appropriated under this section for a fiscal year 
to make grants under this subtitle to tribal organizations submitting 
applications under section 213(b) to be used in accordance with section 
214.

    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.

    (a) Provision of Information.--The Secretary of Health and Human 
Services, directly or through a contract awarded on a competitive basis 
to a qualified entity, shall provide technical assistance and collect 
and disseminate information concerning the importance of high quality 
child care to States, units of local government, private non-profit 
child care organizations, child care credentialing or accreditation 
entities, child care providers, and parents, including, in partnership 
with the Advertising Council or other professional advertising group, a 
public awareness campaign promoting quality child care.
    (b) Grant Program.--
            (1) In general.--The Secretary of Health and Human 
        Services, acting through the National Child Care Information 
        Center, shall award competitive grants to child care 
credentialing or accreditation entities (as defined in section 2(2)) 
that have been providing credentialing or accreditation services for 
child care providers for not more than 10 years.
            (2) Application.--To be eligible to receive a grant under 
        this subsection, a child care credentialing or accreditation 
        entity shall prepare and submit to the Secretary an application 
        at such time, in such manner, and containing such information 
        as the Secretary shall require.
            (3) Use of funds.--Amounts provided under a grant awarded 
        under paragraph (1) shall be used by grantees to refine and 
        evaluate the procedures and methods used by such grantees in 
        accrediting facilities as accredited child care centers or 
        providing child care credentials to individual child care 
        providers. Such procedures and methods shall be designed to 
        ensure that the highest quality child care is provided by 
        accredited child care centers and credentialed individuals, to 
        provide information about the accreditation or credentialing 
        process to providers, and to provide subsidies to needy 
        individuals and organizations to enable such individuals and 
        organization to participate in the accreditation or 
        credentialing process.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of the 
fiscal years 2000 through 2004.

SEC. 222. CHILD CARE TRAINING INFRASTRUCTURE.

    (a) Definitions.--In this section:
            (1) Child care provider.--The term ``child care provider'' 
        has the meaning given the term in section 211.
            (2) Elementary school; secondary school.--The terms 
        ``elementary school'' and ``secondary school'' have the 
        meanings given the terms in section 14101 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 8001).
            (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (5) Training site.--The term ``training site'' means a 
        training site described in subsection (e)(1).
    (b) Grant.--The Secretary shall make a grant to an eligible 
organization to develop and operate a technology-based child care 
training infrastructure, in order to facilitate--
            (1) the accreditation of facilities as accredited child 
        care centers and accredited family child care homes;
            (2) the credentialing of individuals as credentialed child 
        care professionals; and
            (3) the dissemination of child care, child development, and 
        early childhood education information and research to child 
        care providers.
    (c) Use of Funds.--An organization that receives a grant under 
subsection (b) shall use the funds made available through the grant 
to--
            (1) develop partnerships, to the maximum extent possible, 
        with elementary schools, secondary schools, institutions of 
        higher education, Federal, State, and local government 
        agencies, and private entities, to share equipment, technical 
        assistance, and other technological resources, for the 
        development of the infrastructure described in subsection (b);
            (2) enter into arrangements with entities for the provision 
        of sites from which the infrastructure will disseminate 
        training;
            (3) ensure the establishment of at least 2 of the training 
        sites in each State, and additional training sites based on the 
        populations and geographic considerations of States;
            (4) enter into arrangements with child care credentialing 
        or accreditation entities that are recognized (as described in 
        section 2(2)) by more than 1 State agency or tribal 
        organization, for the development of child care training to be 
        disseminated through the infrastructure;
            (5) provide, directly or through a contract (which may for 
        good cause be a sole source contract), expertise to convert 
        training courses for distance transmission, provide interactive 
        environments, and conduct registration, testing, electronic 
        storage of information, and such other technology-based 
        activities to adapt and enhance training course content 
        consistent with the medium of transmission involved through the 
        infrastructure;
            (6) provide, through a logistical scheduling mechanism, 
        equitable access to the infrastructure for all child care 
        credentialing or accreditation entities described in paragraph 
        (4) that request an opportunity to disseminate child care 
        training through the infrastructure and meet the requirements 
        of this section;
            (7) develop and implement a mechanism for participants in 
        the training to evaluate the infrastructure, including 
        providing comments on the accessibility and affordability of 
        the training, and recommendations for improvements in the 
        training;
            (8) develop and implement a monitoring system to provide 
        data on the training provided through the infrastructure, 
        including data on--
                    (A) the number of facilities and individuals 
                participating in the training;
                    (B) the number of facilities receiving 
                accreditation (including a repeat accreditation) as 
                accredited child care centers, and individuals 
                receiving credentialing (including a repeat 
                credentialing) as credentialed child care 
                professionals, after fulfilling requirements that 
                include participation in the training;
                    (C) the number of accredited child care centers, 
                and credentialed child care professionals, 
                participating in the training; and
                    (D) the number of sites in which the training is 
                received, analyzed--
                            (i) by State; and
                            (ii) by location in an urban, suburban, or 
                        rural area; and
            (9) establish and operate the child care training revolving 
        fund described in section 223.
    (d) Eligibility.--To be eligible to receive the grant, an 
organization shall be an organization that--
            (1) is a private, nonprofit entity that is not--
                    (A) a child care credentialing or accreditation 
                entity;
                    (B) a subsidiary or affiliate of a child care 
                credentialing or accreditation entity; or
                    (C) an entity that has a subsidiary or affiliate 
                that is a child care credentialing or accreditation 
                entity;
            (2) has experience in developing partnerships with child 
        care credentialing or accreditation entities, institutions of 
        higher education, and State and local governments, for the 
        provision of child care training;
            (3) has experience in providing and coordinating the 
        provision of child care training to family child care providers 
        and center-based child care providers;
            (4) is related to child care provider support organizations 
        in 35 or more States, through membership in a common 
        organization, affiliation, or another mechanism;
            (5) has experience in working with rural and urban child 
        care provider support organizations and child care providers; 
        and
            (6) has experience in working with national child care 
        groups and organizations, including Federal government 
        agencies, providers of child care training, child care 
        credentialing or accreditation entities, and educational 
        groups.
    (e) Application.--To be eligible to receive a grant under 
subsection (b), an organization shall submit an application to the 
Secretary at such time, in such manner, and containing such information 
as the Secretary may require, including--
            (1) information describing, and indicating a preliminary 
        count of the number of, the sites from which the infrastructure 
        will disseminate training;
            (2) an assurance that the organization will require that--
                    (A) each child care credentialing or accreditation 
                entity that disseminates training through the 
                infrastructure will provide, during at least 60 percent 
                of the dissemination period, an opportunity for 
                participants in the training--
                            (i) to interact with an identified trainer 
                        or training leader at the training site; or
                            (ii) to elect to engage in other 
                        interactive training; and
                    (B) no child care credentialing or accreditation 
                entity may collect fees for participation in the 
                training that total more than--
                            (i) the cost to the entity for developing, 
                        conducting, and providing materials for, the 
                        training; minus
                            (ii) the amount that the entity receives 
                        under this section or from any other source to 
                        develop, conduct, and provide materials for, 
                        the training; and
            (3) information demonstrating that the organization will 
        comply with the organizational structure requirements of 
        subsections (g) and (h), including a copy of the bylaws 
        described in subsection (g)(2)(B).
    (f) Development and Operation of Infrastructure.--
            (1) Contracts.--An organization that receives a grant under 
        subsection (b) may use funds made available through the grant 
        to enter into contracts, which may for good cause be sole 
        source contracts, for the development of the technological and 
        logistical aspects of the infrastructure. The organization 
        shall enter into such a contract with an entity with experience 
        in establishing technology-based interactive educational or 
        training programs.
            (2) Time lines.--
                    (A) Board, personnel, and revolving fund.--Not 
                later than 6 months after the date of receipt of the 
                grant, the organization shall establish the governing 
                board described in subsection (g), appoint a Chief 
                Executive Project Officer described in subsection (h), 
                and establish and operate the child care training 
                revolving fund described in section 223. Not later than 
                1 year after the date of receipt of the grant, the 
                Chief Executive Project Officer shall appoint the 
                personnel described in subsection (h).
                    (B) Training sites.--
                            (i) 50 percent operational.--Not later than 
                        3 years after the date of receipt of the grant, 
                        the organization shall disseminate training at 
                        50 percent of the sites described in the 
information submitted under subsection (e)(1).
                            (ii) 75 percent operational.--Not later 
                        than 4 years after the date of receipt of the 
                        grant, the organization shall disseminate 
                        training at 75 percent of the sites.
                            (iii) 90 percent operational.--Not later 
                        than 5 years after the date of receipt of the 
                        grant, the organization shall disseminate 
                        training at 90 percent of the sites.
                    (C) Evaluation.--The organization shall develop and 
                implement the mechanism for conducting evaluations of 
                the infrastructure described in subsection (c)(6) not 
                later than 3 years after the date of receipt of the 
                grant.
    (g) Governing Board.--
            (1) In general.--An organization that receives a grant 
        under subsection (b) shall establish a governing board.
            (2) Composition.--
                    (A) In general.--The governing board shall be 
                composed of representatives of child care credentialing 
                or accreditation entities that are recognized (as 
described in section 2(2)) by more than 1 State agency or tribal 
organization. The representatives shall be appointed by the entities. 
The composition of the governing board shall be specified in the bylaws 
of the board.
                    (B) Initial bylaws.--The organization shall develop 
                the initial bylaws of the board. The bylaws shall 
                include provisions specifying the manner in which 
                representatives of all child care credentialing or 
                accreditation entities described in subparagraph (A) 
                that are disseminating training through the 
                infrastructure shall participate in the activities of 
                the governing board. The provisions shall provide for 
                the participation through rotation of the 
                representatives in the membership of the board, 
                involvement of the representatives in committees of the 
                board, or through other mechanisms that ensure, to the 
                maximum extent possible, fair and equal participation 
                of the representatives.
                    (C) Amended bylaws.--The governing board may amend 
                the bylaws with the consent of the chief executive 
                officer of the organization receiving a grant under 
                subsection (b). The chief executive officer shall give 
                the consent unless the chief executive officer 
                demonstrates good cause for refusal of the consent. Any 
                amended bylaws shall provide for the participation of 
                representatives of all child care credentialing or 
                accreditation entities described in subparagraph (A) 
                that are disseminating training through the 
                infrastructure, as described in subparagraph (B).
            (3) Duties.--The governing board, with oversight by the 
        chief executive officer of the organization, shall--
                    (A) advise the organization on the development and 
                operation of the child care training infrastructure;
                    (B) review and approve the strategic plan described 
                in subsection (h)(2)(A) and annual updates of the plan;
                    (C) review and approve the proposal described in 
                subsection (h)(2)(B), with respect to the contracts, 
                financial assistance, standards, policies, procedures, 
                and activities referred to in such subsection; and
                    (D)(i) review, and advise the Chief Executive 
                Project Officer regarding, the actions of the Chief 
Executive Project Officer with respect to the personnel of the 
governing board, and with respect to such standards, policies, 
procedures, and activities as are necessary or appropriate to carry out 
this section; and
                    (ii) inform the Chief Executive Project Officer of 
                any aspects of the actions of the Chief Executive 
                Project Officer that are not in compliance with the 
                annual strategic plan referred to in subparagraph (B) 
                or the proposal referred to in subparagraph (C), or are 
                not consistent with the objectives of this section.
    (h) Chief Executive Project Director and Personnel.--
            (1) In general.--
                    (A) Chief executive project director.--The chief 
                executive officer of an organization that receives a 
                grant under subsection (b) shall appoint, compensate, 
                and terminate the employment of a Chief Executive 
                Project Officer to enable the governing board to 
                perform its duties. The chief executive officer of the 
                organization shall consult with the governing board 
                before appointing, changing the compensation of, or 
                terminating the employment of, the Chief Executive 
                Project Officer.
                    (B) Personnel.--The Chief Executive Project Officer 
                shall appoint, compensate, and terminate the employment 
                of such additional personnel as may be necessary to 
                enable the governing board to perform its duties.
            (2) Duties of chief executive project officer.--The Chief 
        Executive Project Officer shall--
                    (A) prepare and submit to the governing board and 
                the chief executive officer of the organization a 
                strategic plan every 3 years, and annual updates of the 
                plan, with respect to the development and major 
                operations of the infrastructure;
                    (B)(i) prepare and submit to the governing board 
                and the chief executive officer of the organization a 
                proposal with respect to such contracts and other 
                financial assistance, and such standards, policies, 
                procedures, and activities, as are necessary or 
                appropriate to carry out this section; and
                    (ii) after receiving and reviewing an approved 
                proposal under subsection (g)(3)(C), enter into such 
                contracts and award such other financial assistance, 
                and establish and administer such standards, policies, 
                procedures and activities, as are necessary or 
                appropriate to carry out this section;
                    (C) prepare and submit to the governing board and 
                the chief executive officer of the organization an 
                annual report, and such interim reports as may be 
                necessary, describing the major actions of the Chief 
                Executive Project Officer with respect to the personnel 
                of the governing board, and with respect to the 
                standards, policies, procedures, and activities; and
                    (D) inform the governing board and the chief 
                executive officer of the organization of, and provide 
                an explanation to the governing board regarding, any 
                substantial differences regarding the implementation of 
                this section between--
                            (i) the actions of the Chief Executive 
                        Project Officer; and
                            (ii)(I) the strategic plan approved by the 
                        governing board and the chief executive officer 
                        of the organization under subsection (g)(3)(B); 
                        or
                            (II) the proposal approved by the governing 
                        board and the chief executive officer of the 
                        organization under subsection (g)(3)(C).
    (i) Corporation.--The organization may establish a nonprofit 
corporation containing the governing board, Chief Executive Project 
Officer, and personnel, to carry out this section.
    (j) Administrative Costs.--Prior to the date on which the 
organization disseminates training at 75 percent of the sites described 
in the information submitted under subsection (e)(1), the organization 
may use not more than 25 percent of the funds made available through 
the grant to pay for the administrative costs of carrying out this 
section. Effective on that date, the organization may use not more than 
15 percent of the funds to pay for the administrative costs.
    (k) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $50,000,000 for each of fiscal 
years 2000 through 2004.

SEC. 223. CHILD CARE TRAINING REVOLVING FUND.

    (a) Establishment.--
            (1) In general.--The Chief Executive Project Officer 
        described in section 222(h) shall use not less than 10 percent 
        of the funds made available through the grant made under 
        section 222 during the 5 years after the date of receipt of the 
        grant to establish and operate a child care training revolving 
        fund (referred to in this section as the ``Fund'')--
                    (A) from which the Chief Executive Project Officer 
                shall make loans to eligible borrowers for the purpose 
                of enabling the persons to purchase computers, 
                satellite dishes, and other equipment that will be used 
                to disseminate training through the infrastructure 
                described in section 222; and
                    (B) into which all payments, charges, and other 
                amounts collected from loans made under subparagraph 
                (A) shall be deposited notwithstanding any other 
                provision of law.
            (2) Separate account.--The Fund shall be maintained as a 
        separate account. Any portion of the Fund that is not required 
        for expenditure shall be invested in obligations of the United 
        States or in obligations guaranteed or insured by the United 
        States.
            (3) Interest earned.--The interest earned on the 
        investments shall be credited to and form a part of the Fund.
    (b) Eligible Borrowers.--To be eligible to receive a loan under 
subsection (a), a borrower shall be a child care provider who seeks to 
receive training through the infrastructure or an entity that has 
entered into an arrangement with the Chief Executive Project Officer to 
provide a training site (as defined in section 222) for the 
infrastructure.
    (c) Application.--To be eligible to receive a loan under subsection 
(a), a borrower shall submit an application to the Chief Executive 
Project Officer at such time, in such manner, and containing such 
information as the Chief Executive Project Officer, in consultation 
with the governing board and the chief executive officer of an 
organization receiving a grant under section 222(b) may require. At a 
minimum, the application shall include--
            (1) an assurance that the person shall use the equipment 
        funded through the loan to receive or disseminate training 
        through the infrastructure, for such period as the Secretary 
        may by regulation prescribe; and
            (2) an assurance that the person shall permit other persons 
        to use the equipment to receive or disseminate training through 
        the infrastructure, for such period as the Secretary may by 
        regulation prescribe.
    (d) Loans.--In making loans under subsection (a), the Chief 
Executive Project Officer shall--
            (1) to the maximum extent practicable, equitably distribute 
        the loans among borrowers in the various States, and among 
        borrowers in urban, suburban, and rural areas; and
            (2) take into consideration the availability to the 
        borrowers of resources from sources other than the Fund, 
        including the availability of resources through the 
        partnerships described in section 222(c)(1).
    (e) Terms and Conditions.--
            (1) Conditions.--The Chief Executive Project Officer may 
        make a loan to a borrower under subsection (a) only if the 
        Chief Executive Project Officer determines that--
                    (A) the borrower is unable to obtain resources from 
                other sources on reasonable terms and conditions; and
                    (B) there is a reasonable prospect that the 
                borrower will repay the loan.
            (2) Terms.--A loan made under subsection (a) shall be--
                    (A) for a term that does not exceed 4 years; and
                    (B) at no interest.
            (3) Collateral.--The Chief Executive Project Officer may 
        require any borrower of a loan made under subsection (a) to 
        provide such collateral as the Chief Executive Project Officer 
        determines to be necessary to secure the loan.
            (4) Procedures and definitions.--Prior to making loans 
        under subsection (a), the Chief Executive Project Officer shall 
        establish written procedures and definitions pertaining to 
        defaults and collections of payments under the loans which 
        shall be subject to the review and approval of the Secretary. 
        The governing board and chief executive officer of the 
        organization involved shall provide to each applicant for a 
        loan under subsection (a), at the time application for the loan 
        is made, a written copy of the procedures and definitions.
    (f) Defaults.--
            (1) Notice.--The Chief Executive Project Officer shall 
        provide the governing board and the chief executive officer of 
        the organization at regular intervals written notice of each 
        loan made under subsection (a) that is in default and the 
        status of the loan.
            (2) Action.--
                    (A) Notification.--After making reasonable efforts 
                to collect all amounts payable under a loan made under 
                subsection (a) that is in default, the Chief Executive 
                Project Officer shall notify the governing board and 
                the chief executive officer of the organization that 
                the loan is uncollectable or collectible only at an 
                unreasonable cost. The notification shall include 
                recommendations for future action to be taken by the 
                Chief Executive Project Director.
                    (B) Instructions.--On receiving the notification, 
                the governing board and the chief executive officer of 
                the organization shall advise the Chief Executive 
                Project Officer--
                            (i) to continue with its collection 
                        activities;
                            (ii) to cancel, adjust, compromise, or 
                        reduce the amount of the loan; or
                            (iii) to modify any term or condition of 
                        the loan, including any term or condition 
                        relating to the time of payment of any 
                        installment of principal, or portion of 
                        principal, that is payable under the loan.
    (g) Administration and Assistance.--
            (1) In general.--Consistent with section 222(j), the Chief 
        Executive Project Officer shall, out of funds available in the 
        Fund--
                    (A) pay expenses incurred by the Chief Executive 
                Project Officer in administering the Fund; and
                    (B) provide competent management and technical 
                assistance to borrowers of loans made under subsection 
                (a) to assist the borrowers to achieve the purposes of 
                the loans.
            (2) Assistance by the secretary.--The Secretary shall 
        provide to the chief executive officer of the organization and 
        the Chief Executive Project Officer such management and 
        technical assistance as the chief executive officer of the 
        organization and the Chief Executive Project Officer may 
        request in order to carry out the provisions of this section.
    (h) Regulations.--The Secretary may prescribe such regulations as 
may be necessary to carry out the objectives of this section, including 
regulations involving reporting and auditing.

 Subtitle D--Quality Child Care Through Federal Facilities and Programs

SEC. 232. PROVIDING QUALITY CHILD CARE THROUGH FEDERAL PROGRAMS.

    (a) Corporation for National and Community Service.--Effective 
October 1, 2003, the Chief Executive Officer of the Corporation for 
National and Community Service shall ensure that, to the maximum extent 
practicable, any child care made available under any Federal financial 
assistance program carried out by the Chief Executive Officer, directly 
or through a child care allowance, shall be child care provided by an 
accredited child care center or a credentialed child care professional, 
as the terms are defined in section 2.
    (b) Departments of Education, Housing and Urban Development, 
Justice, and Labor.--Effective October 1, 2003, the Secretary of 
Education, Secretary of Housing and Urban Development, Attorney 
General, and Secretary of Labor shall ensure that, to the maximum 
extent practicable, any child care made available under any Federal 
financial assistance program carried out by the Attorney General or 
Secretary involved, directly or through a child care allowance, shall 
be child care provided by an accredited child care center or a 
credentialed child care professional, as the terms are defined in 
section 2.
    (c) Social Services Block Grants.--Section 2002(a) of the Social 
Security Act (42 U.S.C. 1397a(a)) is amended by adding at the end the 
following:
    ``(3) Effective October 1, 2003, child care services made available 
under this subsection shall, to the maximum extent practicable, be 
child care services provided by an accredited child care center or a 
credentialed child care professional, as the terms are defined in 
section 2 of the CIDCARE Act.''.

SEC. 233. USE OF COMMUNITY DEVELOPMENT BLOCK GRANTS TO ESTABLISH 
              ACCREDITED CHILD CARE CENTERS.

    Section 105(a) of the Housing and Community Development Act of 1974 
(42 U.S.C. 5305(a)) is amended--
            (1) in paragraph (22), by striking ``and'' at the end;
            (2) in paragraph (23), by striking the period at the end 
        and inserting a semicolon;
            (3) in paragraph (24), by striking ``and'' at the end;
            (4) in paragraph (25), by striking the period at the end 
        and inserting ``; and''; and
            (5) by adding at the end the following:
            ``(26) the establishment of accredited child care centers 
        (as that term is defined in section 2 of the CIDCARE Act), by 
        upgrading existing child care facilities to meet standards for 
        accredited child care centers, or by renovating existing 
structures for use as accredited child care centers.''.

                  Subtitle E--Miscellaneous Provisions

SEC. 241. STUDENT LOAN REPAYMENT AND CANCELLATION FOR CHILD CARE 
              WORKERS.

    (a) Stafford Loan Repayment.--Section 428J of the Higher Education 
Act of 1965 (20 U.S.C. 1078-10) is amended--
            (1) in the section heading by striking ``and nurses'' and 
        inserting ``, nurses and child care workers'';
            (2) in subsection (a)(1), by striking ``and nursing 
        profession'' and inserting ``, nursing and child care 
        professions'';
            (3) in subsection (b)(1)--
                    (A) in subparagraph (B)(ii), by striking ``or'' 
                after the semicolon;
                    (B) in subparagraph (C), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(D) is employed full time providing child care 
                services, and possesses a certificate or degree in 
                early childhood education or development.''; and
            (4) in subsection (g)--
                    (A) in paragraph (1), by striking ``and community 
                service'' and inserting ``community service, and child 
                care''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by striking ``and 
                        community service'' and inserting ``community 
                        service, and child care''; and
                            (ii) in subparagraph (D), by striking ``and 
                        community service'' and inserting ``community 
                        service, and child care''.
    (b) Perkins Loan Cancellation.--Section 465(a)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1087ee(a)(2)) is amended--
            (1) in subparagraph (H), by striking ``or'' after the 
        semicolon;
            (2) in subparagraph (I), by striking the period and 
        inserting ``; or''; and
            (3) by inserting after subparagraph (I) the following:
                    ``(J) as a full-time employee who provides child 
                care services and possesses a certificate or degree in 
                early childhood education or development.''.

SEC. 242. EXPANSION OF COORDINATED ENFORCEMENT EFFORTS OF INTERNAL 
              REVENUE SERVICE AND HHS OFFICE OF CHILD SUPPORT 
              ENFORCEMENT.

    (a) State Reporting of Custodial Data.--Section 454A(e)(4)(D) of 
the Social Security Act (42 U.S.C. 654(e)(4)(D)) is amended by striking 
``the birth date of any child'' and inserting ``the birth date and 
custodial status of any child''.
    (b) Matching Program by IRS of Custodial Data and Tax Status 
Information.--
            (1) National directory of new hires.--Section 453(i)(3) of 
        the Social Security Act (42 U.S.C. 653(i)(3)) is amended by 
        striking ``a claim with respect to employment in a tax return'' 
        and inserting ``information which is required on a tax 
        return''.
            (2) Federal case registry of child support orders.--Section 
        453(h) of the such Act (42 U.S.C. 653(h)) is amended by adding 
        at the end the following:
            ``(3) Administration of federal tax laws.--The Secretary of 
        the Treasury shall have access to the information described in 
        paragraph (2), consisting of the names and social security 
        numbers of the custodial parents linked with the children in 
        the custody of such parents, for the purpose of administering 
        those sections of the Internal Revenue Code of 1986 which grant 
        tax benefits based on support and residence provided dependent 
        children.''
    (c) Minimum Past-Due Support Threshold for Use of Offset 
Procedure.--
            (1) Part d families.--Section 464(b)(1) of the Social 
        Security Act (42 U.S.C. 664(b)(1)) is amended by inserting 
        ``(not to exceed $150)'' after ``minimum amount''.
            (2) Other families.--Section 464(b)(2)(A) of such Act (42 
        U.S.C. 664(b)(2)(A)) is amended by striking ``$500'' both 
        places it appears and inserting ``$150''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on October 1, 1999.
                                 <all>
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