‘‘(I) as a payment to a relative 
caregiver including the child’s grand-
parent, great grandparent, adult sib-
ling, aunt, or uncle; or 
‘‘(II) as a disbursement to mar-
ried parents in which at least one par-
ent is acting as a relative caregiver to 
the parent’s own eligible child, so long 
as such families are in compliance 
with the income and work require-
ments 
described 
in 
section 
658P(4)(C)(iii). 
‘‘(X) REVIEW OF REQUIREMENTS ON REL-
ATIVE
CAREGIVERS.—The plan shall include 
certification that the State will (at least once 
every 5 years) review State and local regula-
tions, requirements, and licensing standards ap-
plicable to relative caregivers to identify bur-
densome or redundant requirements that are 
unnecessary to protect the health and safety of 
children and that— 
‘‘(i) limit or lower the number of rel-
ative caregivers who care for eligible chil-
dren under this subchapter; or 
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‘‘(ii) prevent parents from choosing to 
have a relative caregiver provide childcare 
for their eligible child.’’; 
(2) in paragraph (3)(E)(ii), by striking ‘‘70 
percent to fund direct services (provided by the 
State) in accordance with paragraph (2)(A)’’ and in-
serting ‘‘90 percent to fund direct services (provided 
by the State) via child care certificates’’; and 
(3) in paragraph (4)— 
(A) by redesignating subparagraph (C) as 
subparagraph (D); and 
(B) by inserting after subparagraph (B), 
the following: 
‘‘(C) PAYMENT
RATE.—The State plan 
shall certify that the payment rate to relative 
caregivers is not less than 75 percent of the 
rate for family child care providers for children 
of the same age and in the same geographic lo-
cation.’’. 
(c) LIMITATIONS.—Section 658F(b)(2) of the Child 
Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858d(b)(2)) is amended— 
(1) in the paragraph heading, by striking ‘‘SEC-
TARIAN’’ and inserting ‘‘RELIGIOUS’’; and 
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(2) by striking ‘‘sectarian’’ and inserting ‘‘reli-
gious’’. 
(d) IMPROVING THE QUALITY OF CHILD CARE.—Sec-
tion 658G of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9858e) is amended— 
(1) in subsection (a), by striking paragraphs 
(2) and (3) and inserting the following: 
‘‘(2) AMOUNT OF RESERVATIONS.—Such State 
shall reserve and use— 
‘‘(A) not more than 9 percent of the funds 
described in paragraph (1) each year to carry 
out the activities described in paragraph (1); 
and 
‘‘(B) in addition to the funds reserved 
under subparagraph (A), 3 percent of the funds 
described in paragraph (1) to carry out the ac-
tivities described in paragraph (1) and sub-
section (b)(4), as such activities relate to the 
quality of care for infants and toddlers.’’; and 
(2) in subsection (b)(1)— 
(A) in subparagraph (F), by adding ‘‘and’’ 
at the end; 
(B) in subparagraph (G), by striking ‘‘; 
and’’ and inserting a period; and 
(C) by striking subparagraph (H). 
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(e) REPORTS.—Section 658K(a) of the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 
9858i(a)) is amended— 
(1) in paragraph (1)(B)(vii), by striking ‘‘home 
care’’ and inserting ‘‘in-home care’’; and 
(2) in paragraph (2)(C), by striking ‘‘con-
tracts,’’. 
(f) HOTLINE AND WEBSITE.—Section 658L(b)(2)(B) 
of the Child Care and Development Block Grant Act of 
1990 (42 U.S.C. 9858j(b)(2)(B)) is amended— 
(1) in clause (iv), by striking ‘‘and’’ at the end; 
(2) in clause (v), by striking the period and in-
serting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(vi) notice that the parents of eligible 
children may use child care certificates— 
‘‘(I) as a payment to a relative 
caregiver including the child’s grand-
parent, great grandparent, adult sib-
ling, aunt, or uncle; or 
‘‘(II) as a disbursement to mar-
ried parents in which at least one par-
ent is acting as a relative caregiver to 
the parent’s own eligible child, so long 
as such families are in compliance 
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with the income and work require-
ments 
described 
in 
section 
658P(4)(C)(iii).’’. 
(g) SECTARIAN ACTIVITIES.—Section 658M of the 
Child Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858k) is amended— 
(1) by striking subsection (a); and 
(2) by striking ‘‘(b) TUITION.—With’’ and in-
serting ‘‘With’’. 
(h) NONDISCRIMINATION.—Section 658N of the 
Child Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858l) is amended — 
(1) in subsection (a)— 
(A) in paragraph (1)(B), by striking ‘‘sec-
tarian’’ and inserting ‘‘religious’’; 
(B) in paragraph (3)— 
(i) by striking subparagraph (A); and 
(ii) by redesignating subparagraphs 
(B) and (C) as subparagraphs (A) and 
(B), respectively; and 
(C) by striking paragraph (4) and insert-
ing the following: 
‘‘(4) PROTECTIONS FOR RELIGIOUS CHILD CARE 
PROVIDERS.— 
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‘‘(A) IN
GENERAL.—A State receiving 
funds under this subchapter shall ensure that— 
‘‘(i) in licensing child care providers, 
the State shall not impose any requirement 
on a religious organization that results in 
the imposition of a greater burden on the 
religious organization when compared to 
the related burden imposed on any private 
nonreligious organization; 
‘‘(ii) in licensing child care providers, 
the State shall not impose a requirement 
on a religious organization to provide or 
comply with any document, agreement, 
covenant, memorandum of understanding, 
policy, or regulation, or to provide an as-
surance or notice, unless the State also im-
poses that requirement on nonreligious or-
ganizations; and 
‘‘(iii) a religious organization receiving 
funds under this subchapter that provides 
child care services shall retain its inde-
pendence from State and local govern-
ments, including retaining the autonomy, 
right of expression, religious character or 
affiliation, authority over internal govern-
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ance, or other aspects of the independence 
of such organization. 
‘‘(B) REQUIREMENTS.—A religious organi-
zation receiving funds under this subchapter 
that provides child care services may— 
‘‘(i) retain religious terms in the orga-
nization’s name; 
‘‘(ii) continue to carry out the organi-
zation’s mission, including the definition, 
development, practice, and expression of its 
religious beliefs; 
‘‘(iii) use the organization’s facilities 
to provide a program without concealing, 
removing, or altering religious art, icons, 
scriptures, or other symbols from the fa-
cilities; 
‘‘(iv) select, promote, or dismiss the 
members of the organization’s governing 
body, and the organization’s employees, on 
the basis of their acceptance of or adher-
ence to the religious tenets of the organiza-
tion; and 
‘‘(v) include religious references in the 
organization’s mission statement and other 
chartering or governing documents. 
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‘‘(C) RELIGIOUS
EXEMPTIONS.—A reli-
gious organization’s exemptions, as provided in 
title VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e et seq.) (including exemptions 
from prohibitions of employment discrimination 
in section 702(a) of that Act (42 U.S.C. 2000e– 
1(a))), title VIII of the Civil Rights Act of 1968 
(42 U.S.C. 3601 et seq.), title IX of the Edu-
cation Amendments of 1972 (20 U.S.C. 1681 et 
seq.), the Americans with Disabilities Act of 
1990 (42 U.S.C. 12101 et seq.), the Religious 
Freedom Restoration Act of 1993 (42 U.S.C. 
2000bb et seq.), the Religious Land Use and 
Institutionalized Persons Act of 2000 (42 
U.S.C. 2000cc et seq.), or any other provision 
in law providing an exemption for a religious 
organization, shall not be waived because of the 
religious organization’s receipt of funds under 
this subchapter. 
‘‘(D) PRIVATE RIGHT OF ACTION.—Any re-
ligious organization that alleges a violation of 
its rights under this paragraph and seeks to en-
force such rights— 
‘‘(i) may bring an action in a court of 
competent jurisdiction and assert that vio-
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lation as a claim, or assert that violation 
as a defense in a civil action; and 
‘‘(ii) may obtain appropriate relief, in-
cluding attorney’s fees, against an entity 
or agency that committed such violation.’’; 
and 
(2) in subsection (b), by striking ‘‘sectarian’’ 
each place it appears and inserting ‘‘religious’’. 
(i) DEFINITIONS.—Section 658P of the Child Care 
and Development Block Grant Act of 1990 (42 U.S.C. 
9858n) is amended— 
(1) by striking paragraph (2) and inserting the 
following: 
‘‘(2) CHILD CARE CERTIFICATE.— 
‘‘(A) IN GENERAL.—The term ‘child care 
certificate’ means a certificate (that may be a 
check or other disbursement) that is issued by 
a State or local government under this sub-
chapter directly to a parent who may use such 
certificate— 
‘‘(i) as payment for child care serv-
ices; 
‘‘(ii) as a deposit for child care serv-
ices if such a deposit is required of other 
children being cared for by the provider; or 
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‘‘(iii) as a disbursement to married 
parents described in paragraph (4)(C)(iii) 
in which at least one parent is acting as a 
relative caregiver to the parent’s own child, 
so long as such disbursement is not less 
than the payment rate set for other rel-
ative caregivers for children of the same 
age and in the same geographic location. 
‘‘(B) RULE OF CONSTRUCTION.—Nothing 
in this subchapter shall be construed to allow 
State or Federal agencies to preclude the use of 
such certificates for child care services provided 
by a religious child care provider if such serv-
ices are freely chosen by the parent. Such cer-
tificates may be expended by providers for any 
religious purpose or activity that is a part of 
the child care services, including religious wor-
ship and instruction. 
‘‘(C) NOT GRANTS OR CONTRACTS.—For 
purposes of this subchapter, child care certifi-
cates shall not be considered to be grants or 
contracts.’’; 
(2) in paragraph (4), by striking subparagraphs 
(B) and (C) and inserting the following: 
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‘‘(B) whose family assets do not exceed 
$1,000,000 (as certified by a member of such 
family); and 
‘‘(C) who— 
‘‘(i) resides in a family that is headed 
by an unmarried person who is the child’s 
parent, who is working or attending a job 
training or educational program, and that 
has a family income that does not exceed 
85 percent of the State median income for 
a family with the same number of children 
headed by an unmarried person, based on 
the most recent data that is published by 
the Bureau of the Census; 
‘‘(ii) resides in a family that is headed 
by two married persons who are the child’s 
parents, who are both working or attend-
ing a job training or educational program, 
and that has a family income that does not 
exceed 70 percent of the State median in-
come for a family with the same number of 
children headed by two married persons, 
based on the most recent data that is pub-
lished by the Bureau of the Census; 
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‘‘(iii) resides in a family that is head-
ed by two married persons who are the 
child’s parents, and who work a combined 
total of at least 40 hours per week and 
that has one or both parents acting as a 
relative caregiver for the child, with a fam-
ily income that does not exceed 70 percent 
of the State median income for a family 
with the same number of children headed 
by two married persons, based on the most 
recent data that is published by the Bu-
reau of the Census; or 
‘‘(iv) is receiving, or needs to receive, 
protective services and resides with a par-
ent or parents not described in clause (i), 
(ii), or (iii).’’; 
(3) in paragraph (6)— 
(A) in subparagraph (A), by striking ‘‘a 
group home child care provider’’; and 
(B) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) a relative caregiver or in-home child 
care provider, if such caregiver or other pro-
vider complies with any applicable requirements 
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that govern child care provided by the type of 
provider involved.’’; 
(4) in paragraph (7)— 
(A) by striking ‘‘one individual who pro-
vides’’ and inserting ‘‘one or more individuals 
who provide’’; and 
(B) by striking ‘‘as the sole caregiver, 
and’’; 
(5) by redesignating paragraphs (8), (9), (10), 
(11), (12), (13), (14), and (15) as paragraphs (9), 
(10), (11), (13), (14), (15), (16), and (17), respec-
tively; 
(6) by inserting after paragraph (7), the fol-
lowing: 
‘‘(8) IN-HOME
CHILD
CARE
PROVIDER.—The 
term ‘in-home child care provider’ means an indi-
vidual who provides child care services (excluding 
services provided by a family child care provider) in 
the child’s own home.’’; and 
(7) by inserting after paragraph (11) (as so re-
designated), the following: 
‘‘(12) RELATIVE CAREGIVER.—The term ‘rel-
ative caregiver’ means 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 
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or consanguinity, or by court decree, the child (if the 
parent or parents acting as a relative caregiver are 
married and work a combined total of at least 40 
hours per week), grandchild, great grandchild, sib-
ling, niece, or nephew of such provider.’’. 
(j) PARENTAL RIGHTS.—Section 658Q of the Child 
Care and Development Block Grant Act of 1990 (42 
U.S.C. 9858o) is amended— 
(1) by striking ‘‘(a) IN GENERAL.—’’; and 
(2) by striking subsection (b). 
(k) FRAUD PREVENTION AND INCREASED RELATIVE 
CAREGIVING.—The Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9857 et seq.) is amended 
by adding at the end the following: 
‘‘SEC. 658T. PILOT GRANT PROGRAM TO PREVENT FRAUD. 
‘‘(a) IN GENERAL.—Not later than 1 year after the 
date of the enactment of this section, the Secretary shall 
establish and implement a 2-year pilot program to award 
grants to States to increase the State’s ability to— 
‘‘(1) verify that children receiving assistance 
under this subchapter meet eligibility criteria at the 
time of eligibility determination and redetermination; 
‘‘(2) prevent payments to ineligible children; 
‘‘(3) verify the relationship of relative caregivers 
to eligible children; 
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‘‘(4) identify cases of fraud and intentional pro-
gram violation by child care providers; and 
‘‘(5) recover payments that are the result of 
fraud. 
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated $50,000,000 to carry out 
this section. 
‘‘SEC. 658U. INCREASING RELATIVE CAREGIVING. 
‘‘(a) IN GENERAL.—Not later than 1 year after the 
date of the enactment of this section, the Secretary shall 
submit to Congress and make publicly available a report 
on regulations that prevent family members from acting 
as relative caregivers to eligible children under this sub-
chapter. 
‘‘(b) CONTENTS.—The report required under this 
section shall include the following: 
‘‘(1) A list of the provisions under this sub-
chapter and other Federal laws that decrease the 
number of relative caregivers. 
‘‘(2) A description of State or local government 
policies, regulations, or licensing standards that de-
crease the number of relative caregivers or that 
place burdensome requirements upon such caregivers 
beyond basic health and safety requirements. 
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‘‘(3) Recommendations and legislative proposals 
for Congress, State legislatures, and State lead 
agencies to lessen or remove unnecessary, burden-
some regulations that prevent family members (in-
cluding parents, grandparents, adult siblings, aunts, 
and uncles) from providing child care for eligible 
children under this subchapter. 
‘‘(c) PILOT PROGRAMS.—Not later than 1 year after 
the date of the enactment of this section, the Secretary 
shall establish and implement a 2-year pilot program to 
award grants to States to carry out innovative State pro-
grams to promote child care provided by relative care-
givers and to increase the number of relative caregivers 
providing child care to eligible children under this sub-
chapter. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated $50,000,000 to carry out 
this section.’’. 
SEC. 3. REPEAL OF CREDIT FOR EXPENSES FOR HOUSE-
HOLD AND DEPENDENT CARE SERVICES. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by striking section 21. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 23(f)(1) of the Internal Revenue 
Code of 1986 is amended to read as follows: 
‘‘(1) RULES FOR MARRIED COUPLES.— 
‘‘(A) MARRIED COUPLES MUST FILE JOINT 
RETURN.—If the taxpayer is married at the 
close of the taxable year, the credit shall be al-
lowed under subsection (a) only if the taxpayer 
and his spouse file a joint return for the taxable 
year. 
‘‘(B) MARITAL STATUS.—An individual le-
gally separated from his spouse under a decree 
of divorce or of separate maintenance shall not 
be considered as married. 
‘‘(C) CERTAIN MARRIED INDIVIDUALS LIV-
ING APART.—If— 
‘‘(i) an individual who is married and 
who files a separate return— 
‘‘(I) maintains as his home a 
household which constitutes for more 
than one-half of the taxable year the 
principal place of abode of a quali-
fying individual, and 
‘‘(II) furnishes over half of the 
cost of maintaining such household 
during the taxable year, and 
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‘‘(ii) during the last 6 months of such 
taxable year such individual’s spouse is not 
a member of such household, 
such individual shall not be considered as mar-
ried.’’. 
(2) Section 35(g)(6) of such Code is amended 
to read as follows: 
‘‘(6) MARITAL STATUS; CERTAIN MARRIED IN-
DIVIDUALS
LIVING
APART.—Rules similar to the 
rules of subparagraphs (B) and (C) of section 
23(f)(1) shall apply for purposes of this section.’’. 
(3) Section 129(a)(2)(C) of such Code is 
amended to read as follows: 
‘‘(C) MARITAL STATUS.—For purposes of 
this paragraph, marital status shall be deter-
mined under the rules of subparagraphs (B) 
and (C) of section 23(f)(1).’’. 
(4) Section 129(b)(2) of such Code is amended 
to read as follows: 
‘‘(2) SPECIAL RULES FOR SPOUSE WHO IS A 
STUDENT OR INCAPABLE OF CARING FOR SELF.—In 
the case of a spouse who is a student or an indi-
vidual described in subsection (e)(1)(B)(ii)(III) (de-
termined without regard to the amount of time spent 
in the taxpayer’s household), for purposes of para-
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