‘‘(3) PARTNERSHIPS.—In the case of partner-
ships, the credit under this section shall be deter-
mined at the partnership level and allocated among
the partners under regulations prescribed by the
Secretary; except that—
‘‘(A) subsection (b) shall be applied at the
partner level, and
‘‘(B) the employees of the partnership and
of each partner shall be treated as employees of
the taxpayer for purposes of applying sub-
section (c)(2)(B)(iii).
‘‘(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.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 38(b) of such Code is amended—
(A) by striking ‘‘plus’’ at the end of para-
graph (11),
(B) by striking 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) Subsection (d) of section 39 of such Code
(relating to carryback and carryforward of unused
credits) is amended by adding at the end the follow-
ing new paragraph:
‘‘(9) NO CARRYBACK OF SECTION 45D CREDIT
BEFORE JANUARY 1, 1999.—No portion of the un-
used business credit for any taxable year which is
attributable to the credit determined under section
45D may be carried back to a taxable year begin-
ning before January 1, 1999.’’.
(3) The table of sections for subpart D of part
IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following new
item:
‘‘Sec. 45D. Employer-provided child care credit.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
SEC. 203. DEPENDENT CARE CREDIT ALLOWED AGAINST
THE ALTERNATIVE MINIMUM TAX.
(a) IN GENERAL.—Subsection (a) of section 26 of the
Internal Revenue Code of 1986 is amended by inserting
‘‘(other than the credit allowed by section 21)’’ after
‘‘credits allowed by this subpart’’.
(b) CONFORMING AMENDMENT.—Section 21 of such
Code is amended by adding at the end the following new
subsection:
‘‘(f) LIMITATION BASED ON AMOUNT OF TAX.—The
aggregate credit allowed by this section for the taxable
year shall not exceed the sum of—
‘‘(1) the taxpayer’s regular tax liability for the
taxable year reduced by the sum of the credits al-
lowed by this subpart other than this section, plus
‘‘(2) the tax imposed by section 55 for such
taxable year.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
TITLE III—GRANTS TO BUSINESS
CONSORTIA
Subtitle A—Grant Program
SEC. 301. AUTHORITY TO MAKE GRANTS.
(a) IN GENERAL.—The Secretary shall make grants
to States to be used to provide grants to eligible entities
described in subsection (b) to assist such entities to im-
prove access to affordable, local, quality child care serv-
ices.
(b) ELIGIBLE ENTITIES DESCRIBED.—
(1) IN GENERAL.—An eligible entity described
in this subsection is a consortium that—
(A) shall consist of representatives from
not fewer than 5 businesses (or a nonprofit or-
ganization that represents not fewer than 5
businesses); and
(B) has not received a grant under this
title.
(2) ADDITIONAL REQUIREMENT.—To the maxi-
mum extent practicable, each business or organiza-
tion that forms an eligible entity under paragraph
(1) shall be located in the same geographical region
of the United States.
(c) PRIORITY FOR SMALL BUSINESSES.—In provid-
ing grants under subsection (a), a State shall give priority
to eligible entities that consist of a majority of representa-
tives from small businesses.
(d) MAXIMUM AMOUNT OF GRANT.—The amount of
a grant provided to an eligible entity under subsection (a)
may not exceed $50,000 for any fiscal year.
SEC. 302. APPLICATION.
The Secretary may not provide a grant under section
301 to an eligible entity unless such entity submits to the
Secretary an application that contains—
(1) a proposal to use such grant to provide
quality child care services; and
(2) such information as the Secretary may rea-
sonably require by rule.
SEC. 303. USE OF AMOUNTS.
(a) IN GENERAL.—The Secretary may not provide a
grant under section 301 to an eligible entity unless such
entity agrees to use such grant to initiate a quality, afford-
able, local child care program that carries out the proposal
included in the application submitted under section 302
by such entity.
(b) CONDUCT OF PROGRAM.—In carrying out the
program described in subsection (a), the eligible entity
may—
(1) establish a board of directors to oversee the
program; and
(2) provide child care services on a sliding fee
scale that provides for cost sharing by the families
of the children who receive such services.
(c) ADMINISTRATIVE COSTS.—The eligible entity
may use not more than 15 percent of the amount of a
grant to pay for administrative costs associated with the
program described in subsection (a).
SEC. 304. REQUIREMENT OF MATCHING FUNDS.
The Secretary may not provide a grant under section
301 to an eligible entity unless such entity agrees that—
(1) it will make available non-Federal contribu-
tions toward the costs of carrying out a program
under section 303 in an amount that is not less than
$1 for each $1 of Federal funds provided under a
grant under section 301; and
(2) of such non-Federal contributions, not less
than $1 of each such $2 shall be from businesses
participating in the eligible entity.
Subtitle B—General Provisions
SEC. 351. DEFINITIONS.
For purposes of this title:
(1) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
(2) STATE.—The term ‘‘State’’ has the mean-
ing given such term in section 658P of the of the
Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858n).
SEC. 352. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated $75,000,000
for each of the fiscal years 1999, 2000, 2001, 2002, and
2003 to carry out this title.
TITLE IV—AFTER SCHOOL
PROGRAM
Subtitle A—21st Century
Community Learning Centers
SEC. 401. PROGRAM AUTHORIZATION.
Section 10903 of the 21st Century Community
Learning Centers Act (referred to in this subtitle as ‘‘the
Act’’) is amended—
(1) subsection (a)—
(A) by inserting ‘‘(1) GRANTS TO LEAS.’’
after ‘‘SECRETARY.—’’;
(B) in paragraph (1), as so designated—
(i) by striking ‘‘rural and inner-city’’
and all that follows through ‘‘or to’’ and
inserting the following: ‘‘local educational
agencies, on behalf of public elementary or
secondary 
schools, 
including 
middle
schools, that serve communities with a sub-
stantial need for expanded learning oppor-
tunities, to enable them to establish or’’;
and
(ii) by striking ‘‘a rural or inner-city
community’’ and inserting ‘‘those commu-
nities’’; and
(C) by adding after paragraph (1), as re-
designated, a new paragraph (2) to read as fol-
lows:
‘‘(2) GRANTS TO CBOS.—The Secretary may re-
serve not more than 10 percent of the funds appro-
priated to carry out this part for any fiscal year to
make grants to community-based organizations to
carry out projects, consistent with the purpose of
this part, with the concurrence of the local edu-
cational agencies in their respective communities.’’;
(2) in subsection (b)—
(A) by striking ‘‘States, among’’ and in-
serting ‘‘States and among’’; and
(B) by striking ‘‘United States,’’ and all
that follows through ‘‘a State’’ and inserting
‘‘United States’’; and
(3) in subsection (c), by striking ‘‘3’’ and in-
serting ‘‘5’’.
SEC. 402. APPLICATIONS.
Section 10904(a) of the Act is amended—
(1) in the first sentence, by striking ‘‘an ele-
mentary or secondary school or consortium’’ and in-
serting ‘‘a local educational agency, on behalf of one
or more elementary or secondary schools,’’;
(2) in paragraph (1), by striking ‘‘or consor-
tium’’;
(3) in paragraph (2), by striking ‘‘and’’ after
the semicolon;
(4) in paragraph (3)—
(A) in subparagraph (D), by striking ‘‘or
consortium’’; and
(B) in subparagraph (E)—
(i) by striking ‘‘or consortium’’; and
(ii) in clause (ii), by striking the pe-
riod at the end and inserting a semicolon;
and
(5) by adding at the end the following:
‘‘(4) information demonstrating that the appli-
cant will—
‘‘(A) provide not less than 1⁄2 the annual
cost of project activities from sources other
than funds under this part, which may be pro-
vided in cash or in kind, fairly evaluated, pro-
vided that not more than 50 percent of the ap-
plicant’s contribution may come from funds
provided by the Secretary under other programs
that permit the use of those funds for those ac-
tivities, if the applicant determines, in good
faith, that it cannot otherwise meet the require-
ment of this subparagraph; and
‘‘(B) in the 4th and 5th years of its
project, increase the percentage of the project’s
cost that is paid for by funds other than those
received under this part; and
‘‘(5) an assurance that the applicant will, in
each year of the project, maintain its fiscal effort,
from non-Federal sources, from the preceding fiscal
year for the services it provides with its grant under
this part.’’.
SEC. 403. USES OF FUNDS.
Section 10905 of the Act is amended by striking
‘‘may be used’’ and all that follows through ‘‘four’’ and
inserting the following: ‘‘shall be used to establish or ex-
pand community learning centers that provide activities
that offer significant expanded learning opportunities,
such as before and after school, for children and youth
in the community and that also may include any’’.
SEC. 404. DEFINITION.
Section 10906(1) of the Act is amended to read as
follows:
‘‘(1) provides extended learning services and
that may provide services that address other health,
social services, cultural, and recreational needs of
the community; and;’’.
SEC. 405. CONTINUATION AWARDS UNDER CURRENT STAT-
UTE.
The Act is further amended—
(1) in section 10907, by striking ‘‘appro-
priated’’ and all that follows to the end and insert-
ing the following: ‘‘appropriated $200,000,000 for
each of fiscal years 1999 through 2003.’’; and
(2) by adding after section 10907 a new section
10908 to read as follows:
‘‘SEC. 10908. CONTINUATION AWARDS.
‘‘Notwithstanding any other provision of law, the Sec-
retary may use funds appropriated under this part to
make continuation awards for projects that were funded
under this part with fiscal year 1998 funds, under the
terms and conditions that applied to the original awards
for those projects.’’.
SEC. 406. EFFECTIVE DATE.
This subtitle, and the amendments made by this sub-
title, shall take effect on October 1, 1998.
‘‘(A) 
LIMITATION.—Only 
supplements
served to eligible school children during after-
school hours, weekends, or holidays during the
regular school year may be claimed for reim-
bursement. Institutions may claim reimburse-
ment for only one supplement per child per day.
‘‘(B) RATE.—Eligible supplements shall be
reimbursed at the rate for free supplements
under subsection (c)(3).
‘‘(C) 
NO
CHARGE.—All 
supplements
claimed for reimbursement shall be served with-
out charge.’’.
(b) CHANGES TO ELIGIBILITY REQUIREMENTS FOR
MEAL SUPPLEMENTS FOR CHILDREN IN AFTERSCHOOL
CARE.—Section 17A of such Act (42 U.S.C. 1766a) is
amended—
(1) in subsection (a)(2)—
(A) in subparagraph (A), by adding ‘‘and’’
at the end;
(B) in subparagraph (B), by striking ‘‘;
and’’ and inserting a period; and
(C) by striking subparagraph (C);
(2) by striking subsection (b); and
(3) by redesignating subsections (c) and (d) as
subsections (b) and (c), respectively.
Subtitle C—After-School
Prevention Programs
SEC. 421. AUTHORIZED ACTIVITIES.
The provisions of part R of title I of the Omnibus
Crime Control and Safe Streets Act of 1968, as set forth
in the amendment under section 302(a) of H.R. 3, as
passed by the House on May 8, 1997, and in effect for
purposes of title I (under the heading ‘Violent Crime Re-
duction Programs, State and Local Law Enforcement As-
sistance) of the Departments of Commerce, Justice, and
State Appropriations Act, 1998 (Public Law 105–119),
shall apply for purposes of such Appropriations Act as if
the following amendments were made to such provisions:
(1) In section 1801(b) by striking ‘‘amounts’’
and inserting the following: ‘‘Fifty percent of the
amount’’.
(2) By adding at the end of section 1801 the
following:
‘‘(c) PREVENTION.—50 percent of the amount paid
to a State, unit of local government, or an eligible unit
under this part shall be used by the State, unit of local
government, or eligible unit for the purpose of improving
prevention programs in juvenile justice system. The pro-
grams must include all of the following:
‘‘(1) Operating after-school programs with high
priority given to programs designed and operated by
law enforcement personnel, such as police athletic
leagues.
‘‘(2) Targeting high-crime neighborhood and at-
risk juveniles.
‘‘(3) Providing educational or recreational ac-
tivities designed to encourage law-abiding conduct,
reduce the incidence of criminal activity, or teach ju-
veniles alternatives to crime.
‘‘(4) Coordinating with State or local juvenile
crime control and juvenile offender accountability
programs.’’.
(3) In section 1807(4), by striking ‘‘section
1801(b)’’ and inserting ‘‘subsections (b) and (c) of
section 1801’’.
TITLE V—MODEL STATES EARLY
LEARNING PROGRAM
SEC. 501. MODEL STATES EARLY LEARNING PROGRAM.
(a) FUNDING.—Section 418 of the Social Security
Act (42 U.S.C. 618), as amended by section 101 of this
Act, is amended—
(1) by redesignating subsections (c), (d), and
(e) as subsections (d), (e), and (f), respectively; and
(2) by inserting after subsection (b) the follow-
ing:
‘‘(c) APPROPRIATIONS FOR MODEL STATES EARLY
LEARNING PROGRAM.—
‘‘(1) APPROPRIATION.—Out of any money in
the Treasury of the United States not otherwise ap-
propriated, there are appropriated $600,000,000 for
each of fiscal years 1999 through 2003 for carrying
out activities related to early learning programs in
accordance with section 658T of the CCDBG Act.
‘‘(2) 
RESERVATION
AND
ALLOTMENT
OF
FUNDS.—
‘‘(A) INDIAN TRIBES.—The Secretary shall
reserve 2 percent of the total amount appro-
priated pursuant to paragraph (1) of this sub-
section for each fiscal year for payments to In-
dian tribes. From the amount so reserved for a
fiscal year, the Secretary shall allot to an In-
dian tribe for the fiscal year an amount that
bears the same proportion to the amount so re-
served as the proportion of funds provided to
the Indian tribe under section 658O(c) of the
CCDBG Act for the fiscal year bears to the
total amount paid to all Indian tribes under
such section for the fiscal year.
‘‘(B) TERRITORIES.—The Secretary shall
reserve 1⁄2 of 1 percent of the total amount ap-
propriated pursuant to paragraph (1) of this
subsection for any fiscal year for payments to
the territories. From the amount so reserved
for a fiscal year, the Secretary shall allot to a
territory for the fiscal year an amount that
bears the same ratio to the amount so reserved
as the amount provided to the territory under
the CCDBG Act for fiscal year 1997 bears to
the total amount provided to all territories
under such Act for fiscal year 1997.
‘‘(C) TECHNICAL
ASSISTANCE
FOR, AND
EVALUATION
OF, 
EARLY
LEARNING
PRO-
GRAMS.—From all amounts appropriated pur-
suant to paragraph (1) of this subsection, the
Secretary 
shall 
reserve 
an 
aggregate 
of
$6,000,000, which shall be available only for
costs of providing technical assistance to, and
conducting national evaluations of, State, local,
and tribal early learning programs under sec-
tion 658T of the CCDBG Act.
‘‘(D) STATES.—The Secretary shall allot
the total amount appropriated for a fiscal year
pursuant to paragraph (1) of this subsection
that remains after applying subparagraphs (A),
(B), and (C) of this paragraph for the fiscal
year, among the Model States pursuant to the
formula used for determining the amount to be
allotted to the State under section 658O of the
CCDBG Act.
‘‘(3) MATCHING
PAYMENTS
TO
STATES
AND
TERRITORIES.—
‘‘(A) IN
GENERAL.—The Secretary shall
pay to each State and each territory that is a
Model State for a fiscal year an amount equal
to the lesser of—
‘‘(i) the amount allotted to the State
or territory under paragraph (2) of this
subsection; or
‘‘(ii) 80 percent of expenditures by the
State or territory for an early learning pro-
gram under a plan approved under section
658T of the CCDBG Act.
‘‘(B) 
REDISTRIBUTION.—Subsection
(a)(2)(D) shall apply to amounts allotted to
States under this subsection.
‘‘(4) PAYMENTS TO INDIAN TRIBES.—The Sec-
retary shall pay to each Indian tribe for a fiscal year
an amount equal to the lesser of—
‘‘(A) the amount allotted to the Indian
tribe under paragraph (2)(A) of this subsection;
or
‘‘(B) the total amount of expenditures by
the tribe for an early learning program under
section 658T of the CCDBG Act.
‘‘(5) MODEL
STATE.—In this subsection, the
term ‘Model State’ means a State that has in effect
under its plan under section 658E of the CCDBG
Act an early learning program plan meeting the re-
quirements specified in section 658T(b)(2) of such
Act.’’.
(b) ESTABLISHMENT
OF MODEL STATES EARLY
LEARNING PROGRAM.—
(1) 
STATE
PLAN
REQUIREMENT.—Section
658E(c) of the Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858c(c)) is amended
by adding at the end the following:
‘‘(6) MODEL
STATES
EARLY
LEARNING
PRO-
GRAM PLAN REQUIREMENTS.—In the case of a State
electing to implement an early learning program
under section 658T, the State plan shall meet the
requirements specified in section 658T(b)(2).’’.
(2) MODEL
STATES
EARLY
LEARNING
PRO-
GRAM.—The Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858 et seq.) is
amended by adding at the end the following:
‘‘SEC. 658T. MODEL STATES EARLY LEARNING PROGRAM.
‘‘(a) PROGRAM PURPOSE.—The purpose of the pro-
gram under this section is to enable States, through
grants to communities, to support activities that promote
children’s healthy development during the earliest years
of life and improve the quality of child care for children
aged five and under, including those with disabilities.
‘‘(b) REQUIREMENTS FOR STATE PARTICIPATION.—
‘‘(1) IN GENERAL.—In order to be eligible for
Federal matching funds under section 418(c) of the
Social Security Act, the State shall have in effect
under its plan under section 658E an early learning
program plan meeting the requirements specified in
paragraph (2).
‘‘(2) MODEL
STATES
EARLY
LEARNING
PRO-
GRAM
PLAN
REQUIREMENTS.—The model states
early learning program plan shall meet the following
requirements:
‘‘(A) LEAD AGENCY.—The plan shall pro-
vide that the program will be administered by
the lead agency designated under 658D.
‘‘(B) CERTIFICATION.—The plan shall in-
clude a certification that—
‘‘(i) there is in effect in such State,
and that the State maintains a mechanism
to enforce, a requirement that each center-
based child care provider, and each group
home child care provider, in such State ob-
tain from such State, or from an entity of
local government designated by such State,
a preemployment criminal background
check of each individual subsequently em-
ployed by such provider to provide child
care services,
‘‘(ii) there is in effect in such State,
and that such State enforces, a require-
ment that an entity of State or local gov-
ernment periodically inspect center-based
child care providers, group home child care
providers,family child care providers, and
all other child care providers for compli-
ance with the health and safety require-
ments applicable to such providers under
State law.
‘‘(iii) there is in effect in such State,
and that such State enforces, a require-
ment that all caregivers who provide child
care services for which assistance is pro-
vided under the Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C.
9858 et seq.), receive training in providing
medical first aid.
‘‘(iv) there is in effect in such State,
and that such State enforces, a require-
ment that caregivers who are, or are em-
ployed by, child care providers who provide
child care services for compensation have
specific minimum training as determined
and provided by the lead agency.
‘‘(v) there is in effect in such State,
and that such State enforces, a require-
ment that all child care providers in such
State who provide child care services for
compensation obtain from the parents (or
legal guardians) of the children who receive
such services information regarding wheth-
er such children have received age-appro-
priate immunizations in accordance with
the 
then 
current 
immunization 
rec-
ommendations issued by the Centers for
Disease Control and Prevention.
‘‘(vi) there is in effect in such State,
and that such State enforces, a require-
ment that specifies developmentally appro-
priate child-per-caregiver ratios applicable
to center-based child care providers in such
State.
‘‘(vii) such State complies with section
58E(c)(4)(A) of the Child Care and Devel-
opment Block Grant Act (42 U.S.C.
9858c(c)(4)(A)).
‘‘(C) ASSURANCES.—The plan shall include
an assurance that—
‘‘(i) such State will comply with the
requirements of this subtitle applicable
with respect to such grant.
‘‘(ii) the State will not reduce or re-
move any requirement applicable to child
care providers, that exceeds any require-
ment applicable under this title.
‘‘(D) COMMUNITY GRANT PROCEDURES.—
The plan shall describe the standards and pro-
cedures to be applied in the review and approval
of community applications, and in setting
amounts, terms, and conditions of community
grants, including the methods to be used to en-
sure that no less than 70 percent of grant
funds are awarded to low-income communities.
‘‘(E) COMMUNITY PARTICIPATION IN PLAN-
NING
AND
MONITORING.—The plan shall de-
scribe the methods to be used to ensure partici-
pation, in planning and monitoring activities
under the community plan, of representatives of
concerned elements of the community, including
parents of young children, child care providers,
child development professionals, early interven-
tion specialists, health care providers, public
school representatives, local interagency coordi-
nating councils for children with disabilities,
local government, and business leaders.
‘‘(F) PROGRAM
ACTIVITIES.—The plan
shall specify which of the allowable activities
enumerated in subsection (c) may be carried
out under community grants under the plan.
‘‘(G) PERFORMANCE
GOALS
AND
MEAS-
URES.—The plan shall specify—
‘‘(i) performance goals to be achieved
and the performance measures to be used
to assess progress toward such goals under
the plan, which—
‘‘(I) shall be developed pursuant
to guidance provided by the Secretary
and in consultation with local govern-
ment authorities in accordance with
section 658D(b)(2); and
‘‘(II) shall be designed to im-
prove child development through co-
ordination with health care services;
enhanced early learning environments;
parental involvement; consumer edu-
cation; and increased rates of accredi-
tation by nationally recognized accred-
itation organizations;
‘‘(ii) interim benchmarks and interim
and long term timetables, as appropriate,
for achieving each goal; and
‘‘(iii) the steps to be taken by the
State or grantees in accordance with guid-
ance provided by the Secretary if the speci-
fied benchmarks are not achieved.
‘‘(H) COORDINATION WITH ACTIVITIES TO
IMPROVE THE QUALITY OF CHILD CARE.—The
State plan shall specify the methods to be used
to coordinate activities under this section and
section 658G(a), including coordination of plan-
ning and of performance goals and measures, in
order to maximize the effectiveness of both pro-
grams.
‘‘(c) ALLOWABLE ACTIVITIES.—A model states early
learning program under a State plan under this section
may provide for any or all of the following activities:
‘‘(1) INFORMATION AND RESOURCES.—
‘‘(A) PARENTING
EDUCATION.—Provision
of parenting education, including use of or col-
laboration with Even Start or similar programs,
for parents of young children by means includ-
ing use of community-based resource centers,
family literacy programs with parenting edu-
cation components, collaboration with early
intervention and preschool providers of services
for children, public elementary schools, centers
that serve children with special health care
needs or disabilities and their families, and
home visiting programs.
‘‘(B) INFORMATION AND REFERRAL.—Ini-
tiatives to develop or increase the availability of
consumer education information and referral
services and other resources to assist parents to
locate and assess the quality of available child
care services.
‘‘(C) FAMILY CHILD CARE NETWORKS.—
Development of support networks, information
and referral services, and other supportive serv-
ices addressing needs of family child care pro-
viders for access to such resources as education,
training, and community support services.
‘‘(2) QUALITY AND AVAILABILITY.—
‘‘(A) PROVIDER
TRAINING.—Training of
child care personnel, which may include train-
ing in early childhood development, early lit-
eracy, health, nutrition, hygiene, first-aid and
safety, best practices for serving children with
disabilities in child care, and other appropriate
matters.
‘‘(B) IMPROVED
STAFFING
RATIOS.—Ini-
tiatives to increase ratios of child care staff to
children in care and to reduce child care group
sizes.
‘‘(C) LICENSING AND ACCREDITATION AS-
SISTANCE.—Assistance to entities and individ-
uals in meeting applicable child care accredita-
tion and licensing requirements and in obtain-
ing licensing or accreditation.
‘‘(D) HEALTH
SERVICES.—Improving co-
ordination of child care with appropriate health
services including health and mental health con-
sultations, hearing and vision testing, and im-
munizations, by methods such as co-location of
health and child care services, referrals of chil-
dren in child care to health care providers or
screening services, and transfer of child health
records to public school at school entry. Serv-
ices under this subparagraph shall not include
direct provision of or payment for health care
services.
‘‘(E) CARE FOR CHILDREN WITH SPECIAL
NEEDS.—Increasing the availability and quality
of child care for young children with special
health care needs, developmental delays, and
disabilities; and coordinating with early inter-
vention and preschool special education services.
‘‘(F) SALARY
AND
BENEFIT
ENHANCE-
MENT.—Assistance to child care programs to
increase the quality and continuity of care by
retaining highly qualified child care staff work-
ing directly with children through enhanced
compensation.
‘‘(G) MONITORING
AND
TECHNICAL
AS-
SISTANCE.—Technical assistance to grantees,
and monitoring of programs, assisted under this
section. State expenditures under this subpara-
graph shall not exceed a percentage of total
State expenditures for the program under this
section equal to 10 percent for each of fiscal
years 1999 through 2001, and 5 percent for fis-
cal year 2002 and each succeeding fiscal year.
‘‘(H) 
COMPREHENSIVE
BACKGROUND
CHECKS.—To pay costs incurred to obtain com-
prehensive background checks required by sec-
tion 658T(b)(2)(B)(I),
‘‘(I) SMALL GRANT PROGRAM.—Funding in
the aggregate amount of $1,000,000 or 5 per-
cent of such State’s allotment, whichever is less,
may be used to make small grants to persons
on a competitive basis, established by the Sec-
retary by rule, to be used for improvments and
startup costs (as defined by the Secretary by
rule) incurred to become eligible childcare pro-
viders.’’.
(c) ANNUAL REPORT.—Section 658K(a)(2) of the
Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858i(a)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (D);
(2) by striking the period at the end of sub-
paragraph (E) and inserting a semicolon; and
(3) by inserting after and below subparagraph
(E) the following subparagraph:
‘‘(F) the model states early learning pro-
gram under section 658T, including—
‘‘(i) the number and average dollar
amount of grants awarded;
‘‘(ii) the number, average dollar
amount, and percentage of the total State
award of such grants made to low-income
communities;
‘‘(iii) the number of early learning
programs;
‘‘(iv) the number of children served
with special health care needs, disabilities
or developmental delays;
‘‘(v) the number of early learning pro-
grams that assist children with special
needs;
‘‘(vi) progress toward achievement of
each performance goal, for each specific,
quantifiable and measurable objective;
‘‘(vii) expenditures for each allowable
activity listed in section 658T(c), total ex-
penditures and, to the extent feasible, the
volume or frequency of such activity and
the average expenditure per unit of such
activity; and
‘‘(viii) with respect to any allowable
activity listed in section 658T(c) for which
expenditures are made by the State both
under section 658G(a) and under section
658T, the amount expended under each
such section; and
‘‘(ix) such other data as the Secretary
may require;.’’.
TITLE VI—STANDARDS
ENFORCEMENT PROGRAM
SEC. 601. CHILD CARE STANDARDS ENFORCEMENT PRO-
GRAM.
(a) ESTABLISHMENT OF PROGRAM.—Section 658G
of the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858e) is amended—
(1) by inserting ‘‘(a) CONSUMER EDUCATION.—
’’ before ‘‘A’’; and
(2) by adding at the end the following:
‘‘(b) CHILD CARE STANDARDS ENFORCEMENT.—
‘‘(1) STATE PLAN REQUIREMENT.—In order to
be eligible for funds under section 658J(a)(2), a
State shall include in its plan under section 658E a
child care standards enforcement plan, with the fol-
lowing elements:
‘‘(A) ASSESSMENT OF CURRENT ENFORCE-
MENT PROGRAM.—An assessment of state en-
forcement programs in effect in fiscal year
1998 (or, if later, the base year as defined in
section 658B(b)(2)(E)(i)) by provider type, in-
cluding number of inspections, percentage of
providers inspected, and scope of inspection.
‘‘(B) GOALS AND MEASURES FOR IMPROV-
ING
ENFORCEMENT
PROGRAMS.—A statement
of goals to be achieved with respect to increas-
ing the number of annual inspections, expan-
sion of the scope or improvement of the quality
of inspections, or a combination thereof, and
performance measures to be used to assess
progress toward such goals by provider type.
‘‘(C) ENFORCEMENT
IMPROVEMENT
AC-
TIVITIES.—A description of the activities to be
carried out with funds allotted to the State
from amounts appropriated under section
658B(b), which may include—
‘‘(i) initiatives to increase numbers of
qualified staff engaged in licensing of child
care providers and enforcement of licens-
ing, health, safety, and other applicable
standards;
‘‘(ii) increased monitoring and en-
forcement 
activities, 
including 
unan-
nounced inspections;
‘‘(iii) development, and dissemination
to the public, of information on health,
safety and licensing violations, by provider;
and
‘‘(iv) other activities designed to en-
sure provider compliance with applicable
standards including coordination with sec-
tion 658T(c)(2) activities under the early
learning program such as licensing, accred-
itation, and monitoring of and technical
assistance to grantees.
‘‘(2) SUPPLEMENTATION
OF
OTHER
FUND-
ING.—The State plan described in paragraph (1)
shall contain assurances that Federal funds provided
to the State under this subsection will not be used
to supplant Federal or non-Federal funds for exist-
ing services and activities that promote the purposes
of this subsection.’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section
658B of the Child Care and Development Block Grant Act
of 1990 (42 U.S.C. 9858) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘There’’; and
(2) by adding at the end the following:
‘‘(b) CHILD CARE STANDARDS ENFORCEMENT.—
‘‘(1) APPROPRIATION.—There is authorized to
be appropriated to carry out section 658G(b)
$100,000,000 for each of fiscal years 1999 through
2003.
‘‘(2) 
ALLOCATION
OF
APPROPRIATIONS.—
Amounts appropriated for each fiscal year pursuant
to paragraph (1) shall be allocated among States (as
defined in section 658O) as follows:
‘‘(A) BASIC GRANT.—The Secretary shall
allocate to States, in accordance with the for-
mula set forth in section 658O—
‘‘(i) the amount appropriated under
this section for fiscal year 1999, and
‘‘(ii) the first $75,000,000 of such ap-
propriations (or, if less, the total amount
appropriated) for each of fiscal years 2000,
2001, and 2002.
‘‘(B) SUPPLEMENT TO ACHIEVE $1 MIL-
LION GRANT.—From the amount (if any) re-
maining after application of subparagraph (A),
the Secretary shall allocate to each State that
received an allocation of less than $1,000,000
under subparagraph (A) the lesser of—
‘‘(i) the difference between such allo-
cation and $1,000,000, or
‘‘(ii) an amount bearing the same
ratio to the amount remaining for alloca-
tion under this subparagraph as the dif-
ference determined for such State under
clause (i) bears to the sum of such dif-
ferences, as so determined, for all States
described in this subparagraph.
‘‘(C) PERFORMANCE BONUSES.—
‘‘(i) IN GENERAL.—From the amount
(if any) of the appropriation under para-
graph (1) for each fiscal year remaining
after application of subparagraphs (A) and
(B), the Secretary shall allocate in accord-
ance with the formula set forth in section
658O, to each State that has achieved in
the preceding fiscal year either the inspec-
tion rate or the inspection change percent-
age specified in clause (ii) the lesser of—
‘‘(I) 20 percent of the State’s al-
location under subparagraph (A); or
‘‘(II) an amount bearing the
same ratio to the amount available for
allocation under this subparagraph as
the amount determined for such State
under subclause (I) bears to the sum
of such amounts, as so determined,
for all States described in this sub-
paragraph.
‘‘(ii) PERFORMANCE
TARGETS.—For
purposes of clause (i)—
‘‘(I) the inspection rate shall be
not less than 75 percent for fiscal
year 1999, 85 percent for fiscal year
2000, and 95 percent for fiscal year
2001; and
‘‘(II) the inspection change percentage
shall be not less than 110 for fiscal year
1999, 115 for fiscal year 2000, and 125
for fiscal year 2001.
‘‘(D) REMAINDER.—Amounts not allocated
under subparagraphs (A), (B), and (C) shall re-
main available for allocation for the succeeding
fiscal year in accordance with this subsection.
‘‘(E) DEFINITIONS.—For the purposes of
this paragraph the follow definitions apply—
‘‘(i) ‘base year’, with respect to a
State, means the fiscal year preceding the
first fiscal year for which the State seeks
funding under section 658J(a)(2);
‘‘(ii) ‘inspection change percentage’
means, with respect to a fiscal year, the
ratio of the number of child care facilities
and providers in a State that were in-
spected in such fiscal year to the number
of such facilities and providers that were
inspected in the base year expressed as a
percentage; and
‘‘(iii) ‘inspection rate’ means the ratio
of the number of child care facilities or
providers receiving at least one inspection
during a fiscal year to the total number of
facilities or providers in operation in the
State during that fiscal year.’’.
(c) PAYMENTS.—Section 658J(a) of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C.
9858h(a)) is amended—
(1) by striking ‘‘(a) IN GENERAL.—Subject to
the availability of appropriations’’ and inserting the
following:
‘‘(a) BASIC GRANT.—A State—
‘‘(1) IN GENERAL.—’’; and
(2) by adding at the end the following:
‘‘(2) CHILD CARE STANDARDS ENFORCEMENT
PROGRAM.—A State described in paragraph (1)
whose plan under section 658E provides for child
care standards enforcement under section 658G(b)
shall be entitled to payment under this section in an
amount equal to the lesser of its expenditures or al-
lotment for such purpose under section 658O.’’.
(d) ANNUAL REPORT.—Section 658K(a)(2) of the
Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858(i)(A)(2)), as amended by section 501(c), is
amended by inserting after subparagraph (F) the follow-
ing:
‘‘(G) enforcement of child care quality and
safety standards, including data, by type of pro-
vider, on—
‘‘(i) the number and percentage of fa-
cilities or providers inspected (and the
number and percentage of facilities or pro-
viders receiving more than one inspection)
and a comparison to the prior year’s in-
spection rate;
‘‘(ii) the numbers and types of defi-
ciencies identified (and the numbers of se-
rious deficiencies presenting risks to health
or safety);
‘‘(iii) the number of deficiencies rem-
edied upon subsequent inspection, by type
of deficiency; and
‘‘(iv) such other data as the Secretary
may require; and.’’.
TITLE VII—CHILD CARE PRO-
VIDER 
SCHOLARSHIP 
PRO-
GRAM
SEC. 701. NATIONAL CHILD CARE PROVIDER SCHOLARSHIP
PROGRAM.
(a) ESTABLISHMENT OF PROGRAM.—Section 658G
of the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858e), as amended by section 601(a),
is amended by adding at the end the following:
‘‘(c) CHILD CARE PROVIDER SCHOLARSHIP PRO-
GRAM.—
‘‘(1) STATE PLAN REQUIREMENT.—In order to
be eligible for funds under section 658J(a)(3), a
State shall include in its plan under section 658E a
child care provider scholarship program plan, meet-
ing the requirements of this subsection, designed to
further the goals of child care provider recruitment,
training, credentialing, and retention.
‘‘(2) ELIGIBILITY CRITERIA FOR SCHOLARSHIP
APPLICANTS.—The State plan shall provide that, in
order for an individual to be eligible for a scholar-
ship grant under this subsection, the following re-
quirements shall be met:
‘‘(A) DEMONSTRATED
COMMITMENT
TO
CHILD CARE CAREER.—The individual—
‘‘(i) must be a child care worker who
is (or is employed by) a licensed or reg-
istered child care provider, or has a com-
mitment for employment from a licensed or
registered child care provider; and
‘‘(ii) must agree in writing to continue
to be employed in the field of child care for
at least one year after receiving the train-
ing for which assistance is provided.
‘‘(B) COST SHARING BY APPLICANT.—
‘‘(i) IN GENERAL.—The individual (ei-
ther as provided in clause (ii) or otherwise)
will provide funds for payment of a share
of the cost of the education or training.
‘‘(ii) 
APPLICATION
FOR
PELL
GRANTS.—In the case of an application for
a scholarship intended for use in an edu-
cational institution participating in the
Pell Grant program under title IV of the
Higher Education Act, the individual shall
apply for a grant under such program for
which the individual is eligible.
‘‘(C) EMPLOYER REQUIREMENTS.—In the
case of an individual employed by (or who has
a commitment for employment from) a licensed
or registered child care provider—
‘‘(i) COST SHARING.—The individual’s
employer must pay a share of the cost of
the education or training.
‘‘(ii) EMPLOYMENT AND REMUNERA-
TION.—The individual’s employer must
agree to provide increased financial incen-
tives to the individual, such as a salary in-
crease or bonus, when the individual com-
pletes the education or training.
‘‘(3) 
QUALIFYING
EDUCATIONAL
INSTITU-
TIONS.—The State plan shall specify the types of
educational and training programs for which schol-
arships granted under the State program may be
used, which shall be limited to (but may include any
or all) programs that—
‘‘(A) are administered by institutions of
higher education that are eligible to participate
in student financial assistance programs under
title IV of the Higher Education Act of 1965;
and
‘‘(B) that lead to a State or national cre-
dential in child care or early childhood or early
childhood special education, or to an associate
or bachelor’s degree in child development or
early childhood education.
‘‘(4) ANNUAL MAXIMUM SCHOLARSHIP GRANT
AMOUNT.—The maximum amount of a scholarship
awarded to an eligible individual under this section
shall not exceed $1,500 per year.
‘‘(5) SUPPLEMENTATION
OF
OTHER
FUND-
ING.—The State plan shall contain assurances that
Federal funds provided to the State under this sub-
section will not be used to supplant Federal or non-
Federal funds for existing services and activities
that promote the purposes of this subsection.’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section
658B of the Child Care and Development Block Grant Act
of 1990 (42 U.S.C. 9858), as amended by section 601(b),
is amended by adding at the end the following:
‘‘(c) CHILD CARE PROVIDER SCHOLARSHIP PRO-
GRAM.—There is authorized to be appropriated to carry
out section 658G(c) $50,000,000 for each of fiscal years
1999 through 2003.’’.
(c) ALLOTMENT.—Section 658O of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C.
9858m) is amended—
(1) in subsection (a)(1), by striking ‘‘this sub-
chapter’’ and inserting ‘‘each subsection of section
658B’’;
(2) in subsection (a)(2), by striking ‘‘section
658B’’ and inserting ‘‘section 658B(a)’’;
(3) in subsection (b)(1), in the matter preced-
ing subparagraph (A), by inserting ‘‘each subsection
of’’ before ‘‘section 658B’’; and
(4) in subsection (e)(1), by striking ‘‘the allot-
ment under subsection (b)’’ and inserting ‘‘an allot-
ment under subsection (b)’’.
(d) PAYMENTS.—Section 658J(a) of the Child Care
and Development Block Grant Act of 1990 (42 U.S.C.
9858h), as amended by section 601(c), is amended by add-
ing at the end the following:
‘‘(3) CHILD CARE SCHOLARSHIP PROGRAM.—A
State described in paragraph (1) whose plan under
section 658E provides for a child care scholarship
program under section 658G(c) shall be entitled to
payment under this section in an amount equal to
the lesser of its allotment under section 658O or 80
percent of expenditures by the State for such pro-
gram.’’.
(e) ANNUAL REPORT.—Section 658K(a)(2) of the
Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858i), as amended by section 601(d), is amended
by inserting after subparagraph (G) the following:
‘‘(H) the child care scholarship program,
including—
‘‘(i) the number of child care workers
receiving scholarship grants;
‘‘(ii) the amount of each scholarship
grant;
‘‘(iii) the number of course credits or
credentials completed by individuals receiv-
ing scholarships;
‘‘(iv) the number and percentage of
child care workers receiving scholarship
grants in the previous year who fulfilled
their one-year commitment; and
‘‘(v) such other data as the Secretary
may require.’’
TITLE VIII—RESEARCH AND
DEMONSTRATION PROGRAM
SEC. 801. RESEARCH AND DEMONSTRATIONS.
(a) ESTABLISHMENT
OF
RESEARCH
AND
DEM-
ONSTRATION ACTIVITIES.—The Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858 et seq.)
is amended by adding at the end the following:
‘‘SEC. 658U. RESEARCH AND DEMONSTRATIONS.
‘‘(a) IN GENERAL.—The Secretary is authorized, ei-
ther directly or through grants, contracts, cooperative
agreements, or other arrangements, to carry out research,
demonstration projects, and other activities relating to
child care, including activities designed to improve the
quality and increase the availability of child care. Such
activities shall be coordinated with activities under the De-
partment of Education’s Office of Educational Research
and Improvement.
‘‘(b) ALLOWABLE ACTIVITIES.—Activities under this
section may include the following:
‘‘(1) RESEARCH
ON
CHILD
CARE
NEEDS
OF
LOW-INCOME FAMILIES.—Research designed to iden-
tify and overcome barriers restricting availability, af-
fordability, and quality of child care for low-income
families.
‘‘(2) RESEARCH ON GOOD POLICIES AND PRAC-
TICES.—Research designed to identify good child
care policies and practices, including the types of
child care settings, parent activities, and provider
training that most benefit the early development of
children.
‘‘(3) RESEARCH ON RETENTION OF CHILD CARE
PROVIDER STAFF.—Research on factors affecting re-
tention of child care provider staff, including the
National Child Care Provider Scholarship Program
under section 658G(b) and its subsequent effect on
outcomes for children.
‘‘(4) 
DEMONSTRATIONS
OF
TECHNOLOGY-
BASED EDUCATION AND TRAINING.—Demonstration
projects testing use of remote site and interactive
computer technology to provide education and train-
ing to child care providers and parents.
‘‘(5) DEMONSTRATION
PROJECTS
FOR
NEW
METHODS.—Demonstration projects addressing ways
to assist parents, such as parents who choose to stay
at home with their children and parents with par-
ticular child care needs, including parents of chil-
dren with special health care needs or disabilities,
homeless families, migrant families, teen parents
and foster parents.
‘‘(6) NATIONAL CENTER ON CHILD CARE STA-
TISTICS.—Establishment and operation of a Na-
tional Center on Child Care Statistics for the collec-
tion and dissemination of data and information on
child care.
‘‘(7) HOTLINE AND CONSUMER EDUCATION.—
Establishment and operation of a hotline to assist
parents to locate their local child care resource and
referral agency and public education activities to as-
sist parents in becoming informed consumers of
quality child care.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There
is authorized to be appropriated to carry out this section
$30,000,000 for each of fiscal years 1999 through 2003.’’.
(b) REPORT TO CONGRESS.—Section 658L of the
Child Care and Development Block Grant Act of 1990 (42
U.S.C. 9858j) is amended by inserting ‘‘and progress on
development of research and demonstration projects as
carried out under section 658U’’ after ‘‘under section
658K’’.
TITLE IX—MISCELLANEOUS
Subtitle A—Child and Adult Food
Program
SEC. 901. REVISION OF REIMBURSEMENT RATES FOR FAM-
ILY OR GROUP DAY CARE HOMES UNDER THE
CHILD AND ADULT CARE FOOD PROGRAM
UNDER THE NATIONAL SCHOOL LUNCH ACT.
Section 17(f)(3) of the National School Lunch Act
(42 U.S.C. 1766(f)(3)) is amended—
(1) in subparagraph (A)(iii)(I)—
(A) in division (aa), by striking ‘‘95 cents
for lunches and suppers, 27 cents for break-
fasts, and 13 cents for supplements’’ and in-
serting ‘‘$1.03 for lunches and suppers, 38
cents for breakfasts, and 18 cents for supple-
ments’’; and
(B) in division (bb), by striking ‘‘1997’’
and inserting ‘‘1998’’; and
(2) in the second sentence of subparagraph (B),
by inserting after ‘‘Such levels’’ the following: ‘‘shall
be those levels in effect on June 30, 1998, increased
by $2.00 per home and’’.
Subtitle B—Mortgage Insurance for
Child Care and Development
Facilities
SEC. 951. SHORT TITLE.
This subtitle may be cited as the ‘‘Children’s Devel-
opment Commission Act’’.
SEC. 952. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) The need for quality nursery schools, both
full-time and part-time child care centers and after-
school programs, after school programs, neighbor-
hood-run mothers-day-out programs, and family
child care providers has grown among working par-
ents, and parents who stay at home, who want their
children to have access to early childhood education.
(2) All parents should have access to safe, stim-
ulating, and educational early childhood education
programs for their children, whether such programs
are carried out in a child care center, a part-time
nursery school (including a nursery school operated
by a religious organization), or a certified child care
provider’s home.
(3) The number of available enrollment oppor-
tunities for children to receive quality child care
services is not meeting the demand for such services.
(4) In 1995 there were about 21,000,000 chil-
dren less than 6 years of age, of whom 31 percent
were participating in center-based child care services
and 14 percent were receiving child care in homes.
Between 1992 and 2005 the participation of women
24 to 54 years of age in the labor force is projected
to increase from 75 percent to 83 percent.
(5) In States that have set up a mechanism to
provide capital improvements for child care facilities,
the demand for services of such facilities still has
not been met.
(6) The United States is behind other western,
industrialized countries when it comes to providing
child care services. In France, almost 100 percent of
all children 3 to 5 years of age attend nursery
school. In Germany this number is 65 to 70 percent.
In Japan 90 percent of such children attend some
form of preschool care. In all of these countries early
childhood care has proven to increase children’s de-
velopment and performance.
SEC. 953. INSURANCE FOR MORTGAGES ON NEW AND RE-
HABILITATED CHILD CARE AND DEVELOP-
MENT FACILITIES.
Title II of the National Housing Act (12 U.S.C. 1707
et seq.) is amended by adding at the end the following
new section:
‘‘MORTGAGE INSURANCE FOR CHILD CARE AND
DEVELOPMENT FACILITIES
‘‘SEC. 257. (a) PURPOSE.—The purpose of this sec-
tion is to facilitate and assist in the provision and develop-
ment of licensed child care and development facilities.
‘‘(b) GENERAL INSURANCE AUTHORITY.—The Sec-
retary may insure mortgages (including advances on such
mortgages during construction) in accordance with the
provisions of this section and upon such terms and condi-
tions as the Secretary may prescribe and may make com-
mitments for insurance of such mortgages before the date
of their execution or disbursement thereon.
‘‘(c) ELIGIBLE MORTGAGES.—To carry out the pur-
pose of this section, the Secretary may insure any mort-
gage that covers a new child care and development facility,
including a new addition to an existing child care and de-
velopment facility (regardless of whether the existing facil-
ity is being rehabilitated), or a substantially rehabilitated
child care and development facility, including equipment
to be used in the operation of the facility, subject to the
following conditions:
‘‘(1) APPROVED
MORTGAGOR.—The mortgage
shall be executed by a mortgagor approved by the
Secretary. The Secretary may, in the discretion of
the Secretary, require any such mortgagor to be reg-
ulated or restricted as to charges and methods of fi-
nancing and, if the mortgagor is a corporate entity,
as to capital structure and rate of return. As an aid
to the regulation or restriction of any mortgagor
with respect to any of the foregoing matters, the
Secretary may make such contracts with and acquire
for not more than $100 such stock or interest in
such mortgagor as the Secretary may consider nec-
essary. Any stock or interest so purchased shall be
paid for out of the General Insurance Fund, and
shall be redeemed by the mortgagor at par upon the
termination of all obligations of the Secretary under
the insurance.
‘‘(2) PRINCIPAL
OBLIGATION.—The mortgage
shall involve a principal obligation in an amount not
to exceed 90 percent of the estimated value of the
property or project, or 95 percent of the estimated
value of the property or project in the case of a
mortgagor that is a private nonprofit corporation or
association (as such term is defined pursuant to sec-
tion 221(d)(3)), including—
‘‘(A) equipment to be used in the operation
of the facility when the proposed improvements
are completed and the equipment is installed; or
‘‘(B) a solar energy system (as defined in
subparagraph (3) of the last paragraph of sec-
tion 2(a)) or residential energy conservation
measures (as defined in subparagraphs (A)
through (G) and (I) of section 210(11) of the
National Energy Conservation Policy Act), in
cases in which the Secretary determines that
such measures are in addition to those required
under the minimum property standards and will
be cost-effective over the life of the measure.
‘‘(3) 
AMORTIZATION
AND
INTEREST.—The
mortgage shall—
‘‘(A) provide for complete amortization by
periodic payments under such terms as the Sec-
retary shall prescribe;
‘‘(B) have a maturity satisfactory to the
Secretary, but in no event longer than 25 years;
and
‘‘(C) bear interest at such rate as may be
agreed upon by the mortgagor and the mortga-
gee, and the Secretary shall not issue any regu-
lations or establish any terms or conditions that
interfere with the ability of the mortgagor and
mortgagee to determine the interest rate.
‘‘(d) CERTIFICATION BY CHILDREN’S DEVELOPMENT
COMMISSION.—The Secretary may not insure a mortgage
under this section unless the Children’s Development
Commission established under section 258 certifies that
the facility is in compliance, or will be in compliance not
later than 12 months after such certification, with—
‘‘(1) any laws, standards, and requirements ap-
plicable to such facilities under the laws of the
State, municipality, or other unit of general local
government in which the facility is or is to be lo-
cated; and
‘‘(2) after the effective date of the standards
and 
requirements 
established 
under 
section
258(c)(2), such standards and requirements.
‘‘(e) RELEASE.—The Secretary may consent to the
release of a part or parts of the mortgaged property or
project from the lien of any mortgage insured under this
section upon such terms and conditions as the Secretary
may prescribe.
‘‘(f) MORTGAGE INSURANCE TERMS.—The provisions
of subsections (d), (e), (g), (h), (i), (j), (k), (l), and (n)
of section 207 shall apply to mortgages insured under this
section, except that all references in such subsections to
section 207 shall be considered, for purposes of mortgage
insurance under this section, to refer to this section.
‘‘(g) MORTGAGE INSURANCE
FOR FIRE SAFETY
EQUIPMENT LOANS.—
‘‘(1) AUTHORITY.—The Secretary may, upon
such terms and condition as the Secretary may pre-
scribe, make commitments to insure and insure
loans made by financial institutions or other ap-
proved mortgagees to child care and development fa-
cilities to provide for the purchase and installation
of fire safety equipment necessary for compliance
with the 1967 edition of the Life Safety Code of the
National Fire Protection Association (or any subse-
quent edition specified by the Secretary of Health
and Human Services).
‘‘(2) LOAN REQUIREMENTS.—To be eligible for
insurance under this subsection a loan shall—
‘‘(A) not exceed the Secretary’s estimate of
the reasonable cost of the equipment fully in-
stalled;
‘‘(B) bear interest at such rate as may be
agreed upon by the mortgagor and the mortga-
gee;
‘‘(C) have a maturity satisfactory to the
Secretary;
‘‘(D) be made by a financial institution or
other mortgagee approved by the Secretary as
eligible for insurance under section 2 or a mort-
gagee approved under section 203(b)(1);
‘‘(E) comply with other such terms, condi-
tions, and restrictions as the Secretary may
prescribe; and
‘‘(F) be made with respect to a child care
and development facility that complies with the
requirement under subsection (d).
‘‘(3) INSURANCE REQUIREMENTS.—The provi-
sions of paragraphs (5), (6), (7), (9), and (10) of
section 220(h) shall apply to loans insured under
this subsection, except that all references in such
paragraphs to home improvement loans shall be con-
sidered, for purposes of this subsection, to refer to
loans under this subsection. The provisions of sub-
sections (c), (d), and (h) of section 2 shall apply to
loans insured under this subsection, except that all
references in such subsections to ‘this section’ or
‘this title’ shall be considered, for purposes of this
subsection, to refer to this subsection.
‘‘(h) SCHEDULES AND DEADLINES.—The Secretary
shall establish schedules and deadlines for the processing
and approval (or provision of notice of disapproval) of ap-
plications for mortgage insurance under this section.
‘‘(i) DEFINITIONS.—For the purposes of this section,
the following definitions shall apply:
‘‘(1) CHILD CARE AND DEVELOPMENT FACIL-
ITY.—The term ‘child care and development facility’
means a public facility, proprietary facility, or facil-
ity of a private nonprofit corporation or association
that—
‘‘(A) has as its purpose the care and devel-
opment of children less than 12 years of age;
and
‘‘(B) is licensed or regulated by the State
in which it is located (or, if there is no State
law providing for such licensing and regulation
by the State, by the municipality or other politi-
cal subdivision in which the facility is located).
The term does not include facilities for school-age
children primarily for use during normal school
hours. The term includes facilities for training indi-
viduals to provide child care and development serv-
ices.
‘‘(2) EQUIPMENT.—The term ‘equipment’ in-
cludes machinery, utilities, and built-in equipment
and any necessary enclosures or structures to house
them, and any other items necessary for the func-
tioning of a particular facility as a child care and
development facility, including necessary furniture.
Such term includes books, curricular, and program
materials.
‘‘(3) MORTGAGE; FIRST
MORTGAGE; MORTGA-
GEE.—The term ‘mortgage’ means a first mortgage
on real estate in fee simple, or on the interest of ei-
ther the lessor or lessee thereof under a lease having
a period of not less than 7 years to run beyond the
maturity date of the mortgage. The term ‘first mort-
gage’ means such classes of first liens as are com-
monly given to secure advances (including advances
during construction) on, or the unpaid purchase
price of, real estate under the laws of the State in
which the real estate is located, together with the
credit instrument or instruments (if any) secured
thereby, and any mortgage may be in the form of
one or more trust mortgages or mortgage indentures
or deeds of trust, securing notes, bonds, or other
credit instruments, and, by the same instrument or
by a separate instrument, may create a security in-
terest in initial equipment, whether or not attached
to the realty. The term ‘mortgagor’ has the meaning
given the term in section 207(a).
‘‘(j) LIMITATION ON INSURANCE AUTHORITY.—
‘‘(1) TERMINATION.—No mortgage may be in-
sured under this section or section 223(h) after Sep-
tember 30, 2005, except pursuant to a commitment
to insure issued on or before such date.
‘‘(2) AGGREGATE PRINCIPAL AMOUNT LIMITA-
TION.—The aggregate principal amount of mort-
gages for which the Secretary enters into commit-
ments to insure under this section or section 223(h)
on or before the date under paragraph (1) may not
exceed $2,000,000,000. If, upon the date under
paragraph (1), the aggregate insurance authority
provided under this paragraph has not been fully
used, the Secretary of the Treasury shall submit a
report to the Congress evaluating the need for con-
tinued mortgage insurance under this section.’’.
‘‘(k) REGULATIONS.—The Secretary shall issue any
regulations necessary to carry out this section. In issuing
such regulations, the Secretary shall consult with the Sec-
retary of Health and Human Services with respect to any
aspects of the regulations regarding child care and devel-
opment facilities.’’.
SEC. 954. INSURANCE FOR MORTGAGES FOR ACQUISITION
OR REFINANCING DEBT OF EXISTING CHILD
CARE AND DEVELOPMENT FACILITIES.
Section 223 of the National Housing Act (12 U.S.C.
1715n) is amended by adding at the end the following new
subsection:
‘‘(h) MORTGAGE INSURANCE FOR PURCHASE OR RE-
FINANCING OF EXISTING CHILD CARE AND DEVELOP-
MENT FACILITIES.—
‘‘(1) AUTHORITY.—Notwithstanding any other
provision of this Act, the Secretary may insure
under any section of this title a mortgage executed
in connection with the purchase or refinancing of an
existing child care and development facility, the pur-
chase of a structure to serve as a child care and
development facility, or the refinancing of existing
debt of an existing child care and development facil-
ity.
‘‘(2) PURCHASE OF EXISTING FACILITIES AND
STRUCTURES.—In the case of the purchase under
this subsection of an existing child care and develop-
ment facility or purchase of an existing structure to
serve as such a facility, the Secretary shall prescribe
any terms and conditions that the Secretary consid-
ers necessary to ensure that—
‘‘(A) the facility or structure purchased
continues to be used as a child care and devel-
opment facility; and
‘‘(B) the facility complies with the same
requirements applicable under subsections (d)
and (e) of section 257 to facilities having mort-
gages insured under such section.
‘‘(3) REFINANCING OF EXISTING FACILITIES.—
In the case of refinancing of an existing child care
and development facility, the Secretary shall pre-
scribe any terms and conditions that the Secretary
considers necessary to ensure that—
‘‘(A) the refinancing is used to lower the
monthly debt service costs (taking into account
any fees or charges connected with such refi-
nancing) of the existing facility;
‘‘(B) the proceeds of any refinancing will
be employed only to retire the existing indebted-
ness and pay the necessary cost of refinancing
on the existing facility;
‘‘(C) the existing facility is economically
viable; and
‘‘(D) the facility complies with the same
requirements applicable under section 257(d) to
facilities having mortgages insured under such
section.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the terms defined in section 257(i) shall
have the same meanings as provided under such sec-
tion.
‘‘(5) LIMITATION ON INSURANCE AUTHORITY.—
The authority of the Secretary to enter into commit-
ments to insure mortgages under this subsection is
subject to the limitations under section 257(j).’’.
SEC. 955. CHILDREN’S DEVELOPMENT COMMISSION.
Title II of the National Housing Act (12 U.S.C. 1707
et seq.) is amended by adding at the end (after section
257, as added by section 953 of this Act) the following
new section:
‘‘CHILDREN’S DEVELOPMENT COMMISSION
‘‘SEC. 258. (a) ESTABLISHMENT.—There is hereby
established a commission to be known as the Children’s
Development Commission.
‘‘(b) MEMBERSHIP.—
‘‘(1) APPOINTMENT.—The Commission shall be
composed of 7 members appointed by the President,
not later than the expiration of the 3-month period
beginning upon the enactment of this section, by and
with the advice and consent of the Senate, as fol-
lows:
‘‘(A) 1 member shall be appointed from
among 3 individuals recommended by the Sec-
retary of Housing and Urban Development or
the Secretary’s designee.
‘‘(B) 1 member shall be appointed from
among 3 individuals recommended by the Sec-
retary of Health and Human Services or the
Secretary’s designee.
‘‘(C) 1 member shall be appointed from
among 3 individuals recommended by the Sec-
retary of the Treasury or the Secretary’s des-
ignee.
‘‘(D) 4 members shall be appointed from
among 12 individuals recommended jointly by
the Speaker of the House of Representatives,
the Majority Leader of the Senate, Minority
Leader of the House of Representatives, the
Minority Leader of the Senate.
‘‘(2) QUALIFICATIONS
OF
CONGRESSIONALLY
RECOMMENDED
MEMBERS.—Of the members ap-
pointed under paragraph (1)(D)—
‘‘(A) each shall be an individual who ac-
tively participates or is employed in the field of
child care and has academic, licensing, or other
credentials relating to such participation or em-
ployment; and
‘‘(B) not more than 2 may be of the same
political party.
‘‘(3) TERMS.—Each appointed member of the
Commission shall serve for a term of 3 years.
‘‘(4) VACANCIES.—Any member appointed to
fill a vacancy occurring before the expiration of the
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of
that term. A member may serve after the expiration
of that member’s term until a successor has taken
office. A vacancy in the Commission shall be filled
in the manner in which the original appointment was
made.
‘‘(5) CHAIRPERSON.—The chairperson of the
Commission shall be designated by the President at
the time of appointment.
‘‘(6) QUORUM.—A majority of the members of
the Commission shall constitute a quorum for the
transaction of business.
‘‘(7) VOTING.—Each member of the Commis-
sion shall be entitled to 1 vote, which shall be equal
to the vote of every other member of the Commis-
sion.
‘‘(8) PROHIBITION
ON
ADDITIONAL
PAY.—
Members of the Commission shall serve without
compensation, but shall be reimbursed for travel,
subsistence, and other necessary expenses incurred
in the performance of their duties as members of the
Commission.
‘‘(c) FUNCTIONS.—The Commission shall carry out
the following functions:
‘‘(1) CERTIFICATION
OF
COMPLIANCE.—The
Commission shall collect such information and make
such determinations as may be necessary to deter-
mine, for purposes of section 257(d), whether child
care and development facilities comply, or will be in
compliance within 12 months, with—
‘‘(A) any laws, standards, and require-
ments applicable to such facilities under the
laws of the State, municipality, or other unit of
general local government in which the facility is
or is to be located, and
‘‘(B) after the effective date of the stand-
ards and requirements established under para-
graph (2), such standards and requirements,
and shall issue certifications of such compliance.
‘‘(2) ESTABLISHMENT OF STANDARDS.—
‘‘(A) STUDY.—Not later than 12 months
after the date on which appointment of initial
membership of the Commission is completed,
the Commission, in consultation with the Sec-
retary of Housing and Urban Development and
the Secretary of Health and Human Services,
shall conduct a study to determine the laws,
standards, and requirements referred to in
paragraph (1)(A) that are applicable in each
State. Taking into consideration the findings of
the study, the Secretary shall establish stand-
ards and requirements regarding child care and
development facilities that are designed to en-
sure that mortgage insurance is provided under
section 257 and section 223(h) only for safe,
clean, and healthy facilities that provide appro-
priate care and development services for chil-
dren.
‘‘(B) 
PUBLICATION.—The 
Commission
shall issue regulations providing for the stand-
ards and requirements established under sub-
paragraph (A) to take effect, for purposes of
sections 257(d)(2) and 223(h)(2)(B) and para-
graph (1)(B) of this section, not later than 18
months after the date of the enactment of this
section.
‘‘(3) SMALL
PURPOSE
LOANS.—The Commis-
sion shall, to the extent amounts are made available
for such purpose pursuant to subsection (i) and
qualified requests are received, make loans, directly
or indirectly to providers of child care and develop-
ment facilities for reconstruction or renovation of
such facilities, subject to the following requirements:
‘‘(A) Loans under this paragraph shall be
made only for such facilities that are financially
and operationally viable, as determined under
standards and guidelines to be established by
the Commission.
‘‘(B) The aggregate amount of loans made
under this paragraph to a single borrower may
not exceed $50,000.
‘‘(C) A loan made under this paragraph
may not have a term to maturity exceeding 7
years.
‘‘(D) Loans under this paragraph shall
bear interest at rates and be made under such
other conditions and terms as the Commission
shall provide.
‘‘(4) NOTIFICATION.—The Commission shall
take such actions as may be necessary to publicize
the availability of the programs for mortgage insur-
ance under sections 257 and 223(h) and loans under
paragraph (3) of this subsection in a manner that
ensures that information concerning such programs
will be available to child care providers throughout
the United States.
‘‘(5) LIABILITY INSURANCE.—Not later than 12
months after the date on which appointment of ini-
tial membership of the Commission is completed, the
Commission shall establish standards and guidelines,
applicable to mortgage insurance under sections 257
and 223(h) and loans under paragraph (3) of this
subsection, requiring child care providers operating
child care and development facilities assisted under
such provisions to obtain and maintain liability in-
surance in such amounts and subject to such re-
quirements as the Commission considers appro-
priate.
‘‘(6) RESEARCH FOUNDATION.—Not later than
12 months after the date of the enactment of this
section, the Commission shall submit a report to the
Congress recommending a plan for establishing and
funding a foundation that is an entity independent
of the Commission (but which maintains association
with the Commission), the purpose of which shall
be—
‘‘(A) to support research relating to child
care and development facilities;
‘‘(B) to fund pilot programs to test innova-
tive methods for improving child care; and
‘‘(C) to engage in activities and publish
materials to assist persons interested in mort-
gage insurance under sections 257 and 223(h)
and other assistance provided by the Commis-
sion.
‘‘(d) NONDISCRIMINATION REQUIREMENT.—
‘‘(1) IN GENERAL.—The Commission may not
certify under subsection (c)(1) or carry out any ac-
tivities of the Commission with respect to any child
care and development facility if the provider of the
facility discriminates on account of race, color, reli-
gion (subject to paragraph (2)), national origin, sex
(to the extent provided in title IX of the Education
Amendments of 1972 (20 U.S.C. 1681 et seq.)), or
handicapping condition.
‘‘(2) FACILITIES
OF
RELIGIOUS
ORGANIZA-
TIONS.—The prohibition with respect to religion
shall not apply to a child care and development facil-
ity which is controlled by or which is closely identi-
fied with the tenets of a particular religious organi-
zation if the application of this subsection would not
be consistent with the religious tenets of such orga-
nization.
‘‘(3) CERTIFICATION.—As a condition of certifi-
cation under subsection (c)(1) and eligibility for a
loan under subsection (c)(3), the provider of a child
care and development facility shall certify to the
Commission that the provider does not discriminate,
as required by the provisions of paragraph (1) of
this subsection.
‘‘(e) POWERS.—
‘‘(1) ASSISTANCE FROM FEDERAL AGENCIES.—
The Commission may secure directly from any de-
partment or agency of the Federal Government such
information as the Commission may require for car-
rying out its functions. Upon request of the Com-
mission, any such department or agency shall fur-
nish such information.
‘‘(2) ASSISTANCE
FROM
GENERAL
SERVICES
ADMINISTRATION.—The Administrator of General
Services shall provide to the Commission, on a reim-
bursable basis, such administrative support services
as the Commission may request.
‘‘(3) ASSISTANCE
FROM
DEPARTMENT
OF
HOUSING AND URBAN DEVELOPMENT.—Upon the re-
quest of the Commission, the Secretary of Housing
and Urban Development shall, to the extent possible
and subject to the discretion of the Secretary, detail
any of the personnel of the Department of Housing
and Urban Development, on a nonreimbursable
basis, to assist the Commission in carrying out its
functions under this section.
‘‘(4) MAILS.—The Commission may use the
United States mails in the same manner and under
the same conditions as other Federal agencies.
‘‘(f) STAFF.—
‘‘(1) EXECUTIVE DIRECTOR.—The Commission
shall appoint an executive director of the Board, who
shall be compensated at a rate fixed by the Commis-
sion, but which shall not exceed the rate established
for level I of the Executive Schedule under title 5,
United States Code.
‘‘(2) OTHER PERSONNEL.—In addition to the
executive director, the Commission may appoint and
fix the compensation of such personnel as the Com-
mission considers necessary, in accordance with the
provisions of title 5, United States Code, governing
appointments to the competitive service, and the
provisions of chapter 51 and subchapter III of chap-
ter 53 of such title, relating to classification and
General Schedule pay rates.
‘‘(g) REPORTS.—Not later than March 31 of each
year, the Commission shall submit a report to the Presi-
dent and the Congress regarding the operations and activi-
ties of the Commission during the preceding calendar year.
Each annual report shall include a copy of the Commis-
sion’s financial statements and such information and other
evidence as is necessary to demonstrate that the activities
of the Commission during the year for which the report
is made. The Commission may also submit reports to the
Congress and President at such other times as the Com-
mission deems desirable.
‘‘(h) DEFINITIONS.—For purposes of this section, the
terms defined in section 257(i) shall have the same mean-
ings as provided under such section.
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to the Commission to
carry out this section $10,000,000 for fiscal year 1999,
to remain available until expended, of which not more than
$2,500,000 shall be available for administrative costs of
the Commission and the remainder of which shall be avail-
able only for loans under subsection (c)(3).’’.
SEC. 956. STUDY OF AVAILABILITY OF SECONDARY MAR-
KETS FOR MORTGAGES ON CHILD CARE FA-
CILITIES.
The Secretary of the Treasury shall conduct a study
of the secondary mortgage markets to determine—
(1) whether such a market exists for purchase
of mortgages eligible for insurance under sections
223(h) and 257 of the National Housing Act (as
added by this Act);
(2) whether such a market would affect the
availability of credit available for development of
child care and development facilities or would lower
development costs of such facilities; and
(3) the extent to which such a market or other
activities to provide credit enhancement for child
care and development facilities loans is needed to
meet the demand for such facilities.
The Secretary of the Treasury shall submit to the Con-
gress a report regarding the results of the study conducted
under this section not later than the expiration of the 2-
year period beginning on the date of the enactment of this
Act.
Subtitle C—Sense of the Congress
SEC. 971. SENSE OF THE CONGRESS.
It is the sense of the Congress that funds should be
appropriated pursuant to this Act, to the maximum extent
authorized and consistently with achieving a balanced
Federal budget.
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