I
105TH CONGRESS
1ST SESSION
H. R. 2213
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 Fed-
eral facilities and programs, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 22, 1997
Mr. GILMAN (for himself, Mr. DEUTSCH, and Mrs. KELLY) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Government Reform and Oversight,
House Oversight, the Judiciary, Education and the Workforce, and Bank-
ing 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 clearing-
houses 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 Representa-
tives 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 second-
ary 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 de-
pendent 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 tech-
nology.
Sec. 222. Child care training infrastructure.
Sec. 223. Child care training revolving fund.
Subtitle D—Quality Child Care Through Federal Facilities and Programs
Sec. 231. Providing quality child care in Federal facilities.
Sec. 232. Providing quality child care through Federal 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 recog-
nized by a State, to provide child care to chil-
dren in the State (except children who a tribal
organization elects to serve through a center de-
scribed in subparagraph (B));
(B) a center that is accredited, by a child
care credentialing or accreditation entity recog-
nized by a tribal organization, to provide child
care for children served by the tribal organiza-
tion;
(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 ap-
plicable performance standards established by
regulation under such Act for Head Start pro-
grams; or
(D) a military child development center (as
defined in section 1798(1) of title 10, United
States Code).
(2) CHILD CARE CREDENTIALING OR ACCREDI-
TATION 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 trib-
al organization; and
(B) accredits a center or credentials an in-
dividual to provide child care on the basis of—
(i) an accreditation or credentialing
instrument based on peer-validated re-
search;
(ii) compliance with applicable State
and local licensing requirements, or stand-
ards 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
‘‘(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 en-
tity recognized by a State, to provide child
care to children in the State (except chil-
dren 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 en-
tity 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 cen-
ter (as defined in section 1798(1) of title
10, United States Code).
‘‘(F) CHILD CARE CREDENTIALING OR AC-
CREDITATION
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 require-
ments, or standards described in sec-
tion 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 individ-
ual;
‘‘(III) outside monitoring of the
center or individual; and
‘‘(IV) criteria that provide assur-
ances 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 indi-
vidual; 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
PRO-
FESSIONAL.—The term ‘credentialed child care
professional’ means—
‘‘(i) an individual who is credentialed,
by a child care credentialing or accredita-
tion entity recognized by a State, to pro-
vide child care to children in the State (ex-
cept children who a tribal organization
elects to serve through an individual de-
scribed in clause (i)); or
‘‘(ii) an individual who is credentialed,
by a child care credentialing or accredita-
tion entity recognized by a tribal organiza-
tion, 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 De-
velopment 
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 house-
hold and dependent care services) is amended by re-
designating 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 sub-
title, in the case of an applicable taxpayer individual,
the credit allowable under subsection (a) for any tax-
able 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 certifi-
cate is in effect shall, at the time of paying such wages,
make an additional payment equal to such employee’s de-
pendent care advance amount.
‘‘(b) DEPENDENT
CARE
ELIGIBILITY
CERTIFI-
CATE.—For purposes of this title, a dependent care eligi-
bility 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 ex-
pects 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-relat-
ed 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 deter-
mined—
‘‘(A) on the basis of the employee’s wages
from the employer for such period,
‘‘(B) on the basis of the employee’s esti-
mated 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 coordi-
nated 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 sec-
tion 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 amend-
ments made by subsections (a) and (b) shall apply
to taxable years beginning after December 31, 1997.
(2) CREDIT MADE REFUNDABLE.—The amend-
ments 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 Inter-
nal Revenue Code of 1986 (relating to limitation of exclu-
sion) 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 accred-
ited 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:
‘‘In the case of taxable
years beginning in:
For 1 qualify-
ing individual,
the amount is:
For 2 or more
qualifying in-
dividuals, the
amount is:
1998
$5,200
$6,700
1999
$5,400
$6,900
2000
$5,600
$7,100
2001
$5,800
$7,300
2002 and thereafter
$6,000
$7,500,
‘‘(II) in the case of other depend-
ent care services for a qualifying indi-
vidual 
described 
in 
section
21(b)(1)(A) or payments described in
subsection (e)(1)(B), an amount de-
termined in accordance with the fol-
lowing table:
‘‘In the case of taxable
years beginning in:
For 1 qualify-
ing individual,
the amount is:
For 2 or more
qualifying in-
dividuals, the
amount is:
1998
$4,800
$6,300
1999
$4,600
$6,100
2000
$4,400
$5,900
2001
$4,200
$5,700
2002 and thereafter
$4,000
$5,500,
and
‘‘(III) in the case of other de-
pendent care services for a qualifying
individual described in subparagraph
(B) or (C) of section 21(b)(1),
$5,000.
‘‘(ii) AMOUNTS
FOR
MARRIED
INDI-
VIDUALS 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
AL-
LOWED.—
(1) IN GENERAL.—Section 129(e)(1) of the In-
ternal 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 nec-
essary 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 dur-
ing 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 (relat-
ing to identifying information required with re-
spect to service provider) is amended by strik-
ing ‘‘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
‘‘§ 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 sec-
tion 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 ap-
pointed to hold office during good behavior (i) who
is in regular active judicial service, or (ii) who is re-
tired 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 sec-
tion 371(a) of title 28 with the continued right dur-
ing the remainder of his lifetime to receive the sal-
ary of the office at the time of his resignation;
‘‘(6) an individual first employed by the govern-
ment of the District of Columbia before October 1,
1987;
‘‘(7) an individual employed by Gallaudet Col-
lege;
‘‘(8) an individual employed by a county com-
mittee 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 appoint-
ment 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 inter-
ests elect or appoint a member of the board of direc-
tors;
‘‘(B) an individual who is not a citizen or na-
tional 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.
‘‘§ 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 Decem-
ber 31, 1997.
SEC. 103. INCLUSION OF CHILD CARE COSTS IN CHILD SUP-
PORT ORDERS.
(a) IN GENERAL.—Section 466(a) of the Social Secu-
rity 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 accord-
ance 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 ac-
credited 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 EX-
PENSES FOR CHILD CARE ASSISTANCE.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter 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 sec-
tion 38, the employer-provided child care credit deter-
mined 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 high-
er 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 lo-
cated, including, but not limited to, the li-
censing of the facility as a child care facil-
ity.
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 fa-
cility are dependents of employees of the
taxpayer, and
‘‘(iii) the use of such facility (or the
eligibility to use such facility) does not dis-
criminate in favor of employees of the tax-
payer who are highly compensated employ-
ees (within the meaning of section 414(q)).
‘‘(d) RECAPTURE OF ACQUISITION AND CONSTRUC-
TION 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 de-
scribed 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 ........................................................................
Year 5 ........................................................................
Year 6 ........................................................................
Year 7 ........................................................................
Year 8 ........................................................................
Years 9 and 10 ..........................................................
Years 11 and thereafter ............................................
0.
‘‘(B) YEARS.—For purposes of subpara-
graph (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 pur-
poses 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 pro-
vided in clause (ii), the disposition of a
taxpayer’s interest in a qualified child care
facility with respect to which the credit de-
scribed in subsection (a) was allowable.
‘‘(ii) AGREEMENT TO ASSUME RECAP-
TURE
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 dispos-
ing 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 para-
graph (1) only with respect to credits allowed
by reason of this section which were used to re-
duce tax liability. In the case of credits not so
used to reduce tax liability, the carryforwards
and carrybacks under section 39 shall be appro-
priately adjusted.
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease 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 CAS-
UALTY LOSS.—The increase in tax under this
subsection shall not apply to a cessation of op-
eration of the facility as a qualified child care
facility by reason of a casualty loss to the ex-
tent such loss is restored by reconstruction or
replacement within a reasonable period estab-
lished by the Secretary.
‘‘(e) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(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 Sec-
retary, rules similar to the rules of subsection (d) of
section 52 shall apply.
‘‘(3) ALLOCATION IN THE CASE OF PARTNER-
SHIPS.—In the case of partnerships, the credit shall
be allocated among partners under regulations pre-
scribed by the Secretary.
‘‘(f) NO DOUBLE BENEFIT.—
‘‘(1) REDUCTION IN BASIS.—For purposes of
this subtitle—
‘‘(A) IN GENERAL.—If a credit is deter-
mined 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 be-
fore the event resulting in such recapture) shall
be increased by an amount equal to such recap-
ture 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, 1997.
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 tan-
gible 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 de-
fined in section 21(c)(2)(E)) or a
child care center actively seeking ac-
creditation or certification of its em-
ployees 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 profes-
sionals (as defined in subparagraphs
(E) and (G) of section 21(c)(2), re-
spectively),
‘‘(III) an educational organiza-
tion 
described 
in 
subsection
(b)(1)(A)(ii),
‘‘(IV) a governmental unit de-
scribed 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 tax-
payer 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 equip-
ment 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 organiza-
tion described in subclause (I), (II),
(III), or (IV) of clause (i), use within
the United States for educational pur-
poses or support activities related to
the purpose or function of the organi-
zation,
‘‘(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 REFUR-
BISHING.—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 contribu-
tion of property described in subparagraph
(B)(iii) to an organization described in sec-
tion 501(c)(3) and exempt from taxation
under section 501(a),
‘‘(ii) such organization repairs and re-
furbishes 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 contrib-
uted the property a written statement rep-
resenting that its use of the property (and
any use by the organization to which it do-
nates 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 strik-
ing ‘‘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, 1997.
SEC. 203. 2-PERCENT FLOOR ON MISCELLANEOUS ITEM-
IZED DEDUCTIONS NOT APPLICABLE TO AC-
CREDITATION 
AND 
CREDENTIALING 
EX-
PENSES OF CHILD CARE PROVIDERS.
(a) IN GENERAL.—Section 67(b) of the Internal Rev-
enue Code of 1986 (relating to miscellaneous itemized de-
ductions) is amended by striking ‘‘and’’ at the end of para-
graph (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 Reve-
nue Code of 1986 (relating to 2-percent floor on mis-
cellaneous itemized deductions) is amended by redesignat-
ing subsections (e) and (f) as subsections (f) and (g), re-
spectively, and by inserting after subsection (d) the follow-
ing:
‘‘(e) ACCREDITATION
AND
CREDENTIALING
EX-
PENSES 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 in-
dividual 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 de-
rived from service described in paragraph (1).’’.
(c) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1997.
SEC. 204. EXPANSION OF HOME OFFICE DEDUCTION TO IN-
CLUDE USE OF OFFICE FOR DEPENDENT
CARE.
(a) IN GENERAL.—Section 280A(c)(1) of the Inter-
nal 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 tax-
payer 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, 1997.
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-residen-
tial 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 re-
quirements;
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 grand-
child, great grandchild, sibling (if such provider
lives in a separate residence), niece, or nephew
of such provider, if such provider does not re-
side with the child for whom they are providing
care and if the provider complies with any ap-
plicable 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 chil-
dren 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 distrib-
uted through competitive grants awarded to eligible
States that apply for funds and that propose activi-
ties 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 ad-
ministration of the program under this section.
SEC. 213. STATE ELIGIBILITY AND APPLICATION REQUIRE-
MENTS.
(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 require-
ments 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 ap-
plicable to the State under the Child Care and De-
velopment 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 award-
ed to the State for the preceding fiscal year under
a grant under section 418(a)(2) of the Social Secu-
rity Act (42 U.S.C. 618).
(b) PRIORITY.—In awarding grants under this sub-
title, the Secretary shall give priority to States that con-
tribute 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 re-
quire, 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 regu-
lated child care facilities, with at least 1 unan-
nounced 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 re-
place 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 Develop-
ment 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 pro-
vide 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 in-
clude—
(A) technical assistance in the establish-
ment of a child care program;
(B) assistance for the start-up costs relat-
ed to a child care program;
(C) assistance for the training of child care
providers;
(D) scholarships for low-income wage earn-
ers;
(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 de-
partments;
(G) assistance for any other activity deter-
mined appropriate by the State; or
(H) care for children with disabilities; and
(3) use amounts remaining after the State re-
serves funds for activities under paragraphs (1) and
(2) to carry out one or more of the activities de-
scribed in subsection (b).
(b) PERMISSIBLE ACTIVITIES.—A State may use
amounts provided under a grant awarded under this sub-
title 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 en-
tities 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 pro-
grams 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 pro-
grams for children with special needs; or
(7) purchase special equipment or supplies or
other provide for the payment of other extraordinary
expenses required for the care of special needs (in-
cluding 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 PRO-
GRAM.—
(1) APPLICATION.—To be eligible to receive as-
sistance from a State under a grant program estab-
lished 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 in-
formation 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 de-
sire 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 sub-
paragraph (A), a consortium shall be made up
of 2 or more entities which may include busi-
nesses, 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 pro-
vide assurances to the Secretary that, with respect
to the costs to be incurred by an entity receiving as-
sistance in carrying out activities under such pro-
gram, 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 assist-
ance provided to the entity under the grant);
(B) for the second fiscal year in which an
entity receives such assistance, not less than
331⁄3 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 assist-
ance provided to the entity under the grant).
(5) REQUIREMENTS OF PROVIDERS.—To be eli-
gible 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 deter-
mines, 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 Sec-
retary 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 appro-
priated to carry out this subtitle $260,000,000 for each
of the fiscal years 1998 through 2002.
(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 Infor-
mation 
About 
Quality 
Child
Care
SEC. 221. EXPANSION OF ROLE OF THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES IN THE COL-
LECTION AND DISSEMINATION OF INFORMA-
TION AND TECHNOLOGY.
(a) PROVISION OF INFORMATION.—The Secretary of
Health and Human Services, directly or through a con-
tract awarded on a competitive basis to a qualified entity,
shall provide technical assistance and collect and dissemi-
nate information concerning the importance of high qual-
ity 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 Advertis-
ing Council or other professional advertising group, a pub-
lic 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 informa-
tion 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 provid-
ers. Such procedures and methods shall be designed
to ensure that the highest quality child care is pro-
vided 
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 individ-
uals 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 1998 through
2002.
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 ‘‘sec-
ondary 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 facili-
tate—
(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 devel-
opment, 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 ex-
tent 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 develop-
ment 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 con-
siderations of States;
(4) enter into arrangements with child care
credentialing or accreditation entities that are recog-
nized (as described in section 2(2)) by more than 1
State agency or tribal organization, for the develop-
ment 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 con-
tract), expertise to convert training courses for dis-
tance transmission, provide interactive environments,
and conduct registration, testing, electronic storage
of information, and such other technology-based ac-
tivities 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 oppor-
tunity to disseminate child care training through the
infrastructure and meet the requirements of this sec-
tion;
(7) develop and implement a mechanism for
participants in the training to evaluate the infra-
structure, including providing comments on the ac-
cessibility and affordability of the training, and rec-
ommendations 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 ac-
creditation (including a repeat accreditation) as
accredited child care centers, and individuals re-
ceiving 
credentialing 
(including 
a 
repeat
credentialing) as credentialed child care profes-
sionals, after fulfilling requirements that in-
clude participation in the training;
(C) the number of accredited child care
centers, and credentialed child care profes-
sionals, participating in the training; and
(D) the number of sites in which the train-
ing 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 accredita-
tion entity;
(B) a subsidiary or affiliate of a child care
credentialing or accreditation entity; or
(C) an entity that has a subsidiary or affil-
iate that is a child care credentialing or accredi-
tation entity;
(2) has experience in developing partnerships
with child care credentialing or accreditation enti-
ties, institutions of higher education, and State and
local governments, for the provision of child care
training;
(3) has experience in providing and coordinat-
ing the provision of child care training to family
child care providers and center-based child care pro-
viders;
(4) is related to child care provider support or-
ganizations in 35 or more States, through member-
ship in a common organization, affiliation, or an-
other 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 Fed-
eral government agencies, providers of child care
training, child care credentialing or accreditation en-
tities, and educational groups.
(e) APPLICATION.—To be eligible to receive a grant
under subsection (b), an organization shall submit an ap-
plication to the Secretary at such time, in such manner,
and containing such information as the Secretary may re-
quire, 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 re-
quire that—
(A) each child care credentialing or accred-
itation 
entity 
that 
disseminates 
training
through the infrastructure will provide, during
at least 60 percent of the dissemination period,
an opportunity for participants in the train-
ing—
(i) to interact with an identified train-
er or training leader at the training site; or
(ii) to elect to engage in other inter-
active training; and
(B) no child care credentialing or accredi-
tation entity may collect fees for participation
in the training that total more than—
(i) the cost to the entity for develop-
ing, conducting, and providing materials
for, the training; minus
(ii) the amount that the entity re-
ceives under this section or from any other
source to develop, conduct, and provide
materials for, the training; and
(3) information demonstrating that the organi-
zation 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 INFRASTRUC-
TURE.—
(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
(ii) 75 PERCENT OPERATIONAL.—Not
later than 4 years after the date of receipt
of the grant, the organization shall dis-
seminate 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 dis-
seminate training at 90 percent of the
sites.
(C) EVALUATION.—The organization shall
develop and implement the mechanism for con-
ducting evaluations of the infrastructure de-
scribed 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 re-
ceives 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 organiza-
tion. 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 de-
scribed in subparagraph (A) that are dissemi-
nating training through the infrastructure shall
participate in the activities of the governing
board. The provisions shall provide for the par-
ticipation through rotation of the representa-
tives in the membership of the board, involve-
ment 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 un-
less the chief executive officer demonstrates
good cause for refusal of the consent. Any
amended bylaws shall provide for the participa-
tion of representatives of all child care
credentialing or accreditation entities described
in subparagraph (A) that are disseminating
training through the infrastructure, as de-
scribed in subparagraph (B).
(3) DUTIES.—The governing board, with over-
sight by the chief executive officer of the organiza-
tion, shall—
(A) advise the organization on the develop-
ment 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 de-
scribed 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 Execu-
tive 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 Of-
ficer of any aspects of the actions of the Chief
Executive Project Officer that are not in com-
pliance 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
DIREC-
TOR.—The chief executive officer of an organi-
zation 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 per-
form its duties. The chief executive officer of
the organization shall consult with the govern-
ing board before appointing, changing the com-
pensation 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 OF-
FICER.—The Chief Executive Project Officer shall—
(A) prepare and submit to the governing
board and the chief executive officer of the or-
ganization a strategic plan every 3 years, and
annual updates of the plan, with respect to the
development and major operations of the infra-
structure;
(B)(i) prepare and submit to the governing
board and the chief executive officer of the or-
ganization a proposal with respect to such con-
tracts 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 ap-
proved proposal under subsection (g)(3)(C),
enter into such contracts and award such other
financial assistance, and establish and admin-
ister 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 or-
ganization 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 gov-
erning board, and with respect to the stand-
ards, 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 re-
garding the implementation of this section be-
tween—
(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 gov-
erning 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 ad-
ministrative costs.
(k) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$50,000,000 for each of fiscal years 1998 through 2003.
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 estab-
lish 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 bor-
rowers for the purpose of enabling the persons
to purchase computers, satellite dishes, and
other equipment that will be used to dissemi-
nate training through the infrastructure de-
scribed in section 222; and
(B) into which all payments, charges, and
other amounts collected from loans made under
subparagraph (A) shall be deposited notwith-
standing 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 ar-
rangement with the Chief Executive Project Officer to pro-
vide a training site (as defined in section 222) for the in-
frastructure.
(c) APPLICATION.—To be eligible to receive a loan
under subsection (a), a borrower shall submit an applica-
tion 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 orga-
nization receiving a grant under section 222(b) may re-
quire. At a minimum, the application shall include—
(1) an assurance that the person shall use the
equipment funded through the loan to receive or dis-
seminate training through the infrastructure, for
such period as the Secretary may by regulation pre-
scribe; and
(2) an assurance that the person shall permit
other persons to use the equipment to receive or dis-
seminate training through the infrastructure, for
such period as the Secretary may by regulation pre-
scribe.
(d) LOANS.—In making loans under subsection (a),
the Chief Executive Project Officer shall—
(1) to the maximum extent practicable, equi-
tably distribute the loans among borrowers in the
various States, and among borrowers in urban, sub-
urban, 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 sub-
section (a) only if the Chief Executive Project Offi-
cer determines that—
(A) the borrower is unable to obtain re-
sources 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 Execu-
tive Project Officer shall establish written proce-
dures and definitions pertaining to defaults and col-
lections 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 appli-
cant for a loan under subsection (a), at the time ap-
plication for the loan is made, a written copy of the
procedures and definitions.
(f) DEFAULTS.—
(1) NOTICE.—The Chief Executive Project Offi-
cer shall provide the governing board and the chief
executive officer of the organization at regular inter-
vals written notice of each loan made under sub-
section (a) that is in default and the status of the
loan.
(2) ACTION.—
(A) NOTIFICATION.—After making reason-
able efforts to collect all amounts payable under
a loan made under subsection (a) that is in de-
fault, the Chief Executive Project Officer shall
notify the governing board and the chief execu-
tive officer of the organization that the loan is
uncollectable or collectible only at an unreason-
able cost. The notification shall include rec-
ommendations for future action to be taken by
the Chief Executive Project Director.
(B) INSTRUCTIONS.—On receiving the no-
tification, the governing board and the chief ex-
ecutive officer of the organization shall advise
the Chief Executive Project Officer—
(i) to continue with its collection ac-
tivities;
(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 condi-
tion relating to the time of payment of any
installment of principal, or portion of prin-
cipal, 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 Ex-
ecutive 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 ob-
jectives of this section, including regulations involving re-
porting and auditing.
Subtitle 
D—Quality 
Child 
Care
Through Federal Facilities and
Programs
SEC. 231. PROVIDING QUALITY CHILD CARE IN FEDERAL
FACILITIES.
(a) DEFINITION.—In this section:
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of General Serv-
ices.
(2) EXECUTIVE AGENCY.—The term ‘‘Executive
agency’’ has the meaning given the term in section
105 of title 5, United States Code, but does not in-
clude the Department of Defense.
(3) EXECUTIVE FACILITY.—The term ‘‘execu-
tive facility’’ means a facility that is owned or leased
by an Executive agency.
(4) FEDERAL
AGENCY.—The term ‘‘Federal
agency’’ means an Executive agency, a judicial of-
fice, or a legislative office.
(5) JUDICIAL FACILITY.—The term ‘‘judicial fa-
cility’’ means a facility that is owned or leased by a
judicial office.
(6) JUDICIAL OFFICE.—The term ‘‘judicial of-
fice’’ means an entity of the judicial branch of the
Federal Government.
(7) LEGISLATIVE FACILITY.—The term ‘‘legisla-
tive facility’’ means a facility that is owned or leased
by a legislative office.
(8) LEGISLATIVE OFFICE.—The term ‘‘legisla-
tive office’’ means an entity of the legislative branch
of the Federal Government.
(b) EXECUTIVE BRANCH STANDARDS AND ENFORCE-
MENT.—
(1) STATE
AND
LOCAL
LICENSING
REQUIRE-
MENTS.—
(A) IN
GENERAL.—The Administrator
shall issue regulations requiring any entity op-
erating a child care center in an executive facil-
ity to comply with applicable State and local li-
censing requirements related to the provision of
child care.
(B) COMPLIANCE.—The regulations shall
require that, not later than 6 months after the
date of enactment of this Act—
(i) the entity shall comply, or make
substantial progress (as determined by the
Administrator) toward complying, with the
requirements; and
(ii) any contract for the operation of
such a child care center shall include a
condition that the child care be provided in
accordance with the requirements.
(2) ACCREDITATION STANDARDS.—
(A) IN
GENERAL.—The Administrator
shall issue regulations specifying child care cen-
ter accreditation standards and requiring any
entity operating a child care center in an execu-
tive facility to comply with the standards.
(B) COMPLIANCE.—The regulations shall
require that, not later than 3 years after the
date of enactment of this Act—
(i) the entity shall comply, or make
substantial progress (as determined by the
Administrator) toward complying, with the
standards; and
(ii) any contract for the operation of
such a child care center shall include a
condition that the child care be provided
by an entity that complies with the stand-
ards.
(C) CONTENTS.—The standards shall base
accreditation on—
(i) an accreditation instrument de-
scribed in section 2(2)(B);
(ii) outside monitoring described in
section 2(2)(B), by—
(I) the Administrator; or
(II) a child care credentialing or
accreditation entity, or other entity,
with which the Administrator enters
into a contract to provide such mon-
itoring; and
(iii) the criteria described in section
2(2)(B).
(3) EVALUATION AND ENFORCEMENT.—
(A) IN
GENERAL.—The Administrator
shall evaluate the compliance of entities de-
scribed in paragraph (1) with the regulations is-
sued under paragraphs (1) and (2). The Ad-
ministrator may conduct the evaluation of such
an entity directly, or through an agreement
with another Federal agency, other than the
Federal agency for which the entity is providing
child care. If the Administrator determines, on
the basis of such an evaluation, that the entity
is not in compliance with the regulations, the
Administrator shall notify the Executive agency.
(B) TERMINATION OF AGENCY PROVISION
OF CHILD CARE OR CONTRACT.—On receipt of
the notification—
(i) if the entity operating the child
care center involved is the agency, the
agency shall terminate the direct provision
of child care by the agency; and
(ii) if the entity operating the child
care center is a contractor, the agency
shall terminate the contract of the entity
to operate the center.
(C) COST REIMBURSEMENT.—The Admin-
istrator may require Executive agencies to reim-
burse the Administrator for the costs of carry-
ing out subparagraph (A) with respect to enti-
ties operating child care centers for the agen-
cies. If an entity described in paragraph (1) op-
erates a child care center for 2 or more Execu-
tive agencies, the Administrator shall allocate
the costs of providing such reimbursement
among the agencies in a fair and equitable
manner, based on the extent to which each
agency is eligible to place children in the center.
(c) LEGISLATIVE BRANCH STANDARDS
AND EN-
FORCEMENT.—
erating child care centers in judicial facilities, which
shall be the same as the regulations issued by the
Administrator under paragraphs (1) and (2) of sub-
section (b), except to the extent that the Director
may determine, for good cause shown and stated to-
gether with the regulations, that a modification of
such regulations would be more effective for the im-
plementation of the requirements and standards de-
scribed in such paragraphs.
(2) EVALUATION
AND
ENFORCEMENT.—Sub-
section (b)(3) shall apply to the Director described
in paragraph (1), entities operating child care cen-
ters in judicial facilities, and judicial offices. For
purposes of that application, references in subsection
(b)(3) to regulations shall be considered to be ref-
erences to regulations issued under this subsection.
(e) APPLICATION.—Notwithstanding any other provi-
sion of this section, if 3 or more child care centers are
operated in facilities owned or leased by a Federal agency,
the head of the Federal agency may carry out the respon-
sibilities assigned to the Administrator under subsection
(b)(3)(A), the Architect of the Capitol under subsection
(c)(2), or the Director described in subsection (d)(2)
under such subsection, as appropriate.
(f) TECHNICAL ASSISTANCE.—The Administrator
may provide technical assistance to Executive agencies,
and to entities operating child care centers in executive
facilities, in order to assist the entities in complying with
this section. The Architect of the Capitol and the Director
of the Administrative Office of the United States Courts
may provide, or request that the Administrator provide,
technical assistance to legislative offices and judicial of-
fices, respectively, and to entities operating child care cen-
ters in legislative facilities and judicial facilities, respec-
tively, in order to assist the entities in complying with this
section.
(g) COUNCIL.—The Administrator shall establish an
interagency council, comprised of all Federal agencies de-
scribed in subsection (e), to facilitate cooperation and
sharing of best practices, and to develop and coordinate
policy, regarding the provision of child care in the Federal
Government.
(h) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$900,000 for fiscal year 1998 and each subsequent fiscal
year.
SEC. 232. PROVIDING QUALITY CHILD CARE THROUGH FED-
ERAL PROGRAMS.
(a) CORPORATION FOR NATIONAL AND COMMUNITY
SERVICE.—Effective October 1, 2001, the Chief Executive
Officer of the Corporation for National and Community
Service shall ensure that, to the maximum extent prac-
ticable, any child care made available under any Federal
financial assistance program carried out by the Chief Ex-
ecutive 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, 2001, 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, 2001, child care services
made available under this subsection shall, to the maxi-
mum 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 De-
velopment 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 fa-
cilities 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 nurs-
ing 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 de-
gree in early childhood education or develop-
ment.’’; 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 fol-
lowing:
‘‘(J) as a full-time employee who provides
child care services and possesses a certificate or
degree in early childhood education or develop-
ment.’’.
SEC. 242. EXPANSION OF COORDINATED ENFORCEMENT
EFFORTS OF INTERNAL REVENUE SERVICE
AND HHS OFFICE OF CHILD SUPPORT EN-
FORCEMENT.
(a) STATE REPORTING OF CUSTODIAL DATA.—Sec-
tion 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 sta-
tus 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 in-
serting ‘‘information which is required on a tax re-
turn’’.
(2) FEDERAL CASE REGISTRY OF CHILD SUP-
PORT 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 num-
bers 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 sup-
port 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, 1997.
Æ