WELFARE REFORM LAW - H.R. 3734 TITLE VI - CHILD CARE TITLE VI--CHILD CARE SEC. 601. SHORT TITLE AND REFERENCES. (a) SHORT TITLE- This title may be cited as the `Child Care and Development Block Grant Amendments of 1996'. (b) REFERENCES- Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.). SEC. 602. GOALS. Section 658A (42 U.S.C. 9801 note) is amended-- (1) in the section heading by inserting `AND GOALS' after `TITLE'; (2) by inserting `(a) SHORT TITLE- ' before `This'; and (3) by adding at the end the following: `(b) GOALS- The goals of this subchapter are-- `(1) to allow each State maximum flexibility in developing child care programs and policies that best suit the needs of children and parents within such State; `(2) to promote parental choice to empower working parents to make their own decisions on the child care that best suits their family's needs; `(3) to encourage States to provide consumer education information to help parents make informed choices about child care; `(4) to assist States to provide child care to parents t rying to achieve independence from public assistance; and `(5) to assist States in implementing the health, safety, licensing, and registration standards established in State regulations.'. SEC. 603. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT AUTHORITY. (a) IN GENERAL- Section 658B (42 U.S.C. 9858) is amended to read as follows: `SEC. 658B. AUTHORIZATION OF APPROPRIATIONS. `There is authorized to be appropriated to carry out this subchapter $1,000,000,000 for each of the fiscal years 1996 through 2002.'. (b) SOCIAL SECURITY ACT- Part A of title IV of the Social Security Act (42 U.S.C. 601-617) is amended by adding at the end the following new section: `SEC. 418. FUNDING FOR CHILD CARE. `(a) GENERAL CHILD CARE ENTITLEMENT- `(1) GENERAL ENTITLEMENT- Subject to the amount appropriated under paragraph (3), each State shall, for the purpose of providing child care assistance, be entitled to payments under a grant under this subsection for a fiscal year in an amount equal to-- `(A) the sum of the total amount required to be paid to the State under section 403 for fiscal year 1994 or 1995 (whichever is greater) with respect to amounts expended for child care under section-- `(i) 402(g) of this Act (as such section was in effect before October 1, 1995); and `(ii) 402(i) of this Act (as so in effect); or `(B) the average of the total amounts required to be paid to the State for fiscal years 1992 through 1994 under the sections referred to in subparagraph (A); whichever is greater. `(2) REMAINDER- `(A) GRANTS- The Secretary shall use any amounts appropriated for a fiscal year under paragraph (3), and remaining after the reservation described in paragraph (4) and after grants are awarded under paragraph (1), to make grants to States under this paragraph. `(B) AMOUNT- Subject to subparagraph (C), the amount of a grant awarded to a State for a fiscal year under this paragraph shall be based on the formula used for determining the amount of Federal payments to the State under section 403(n) (as such section was in effect before October 1, 1995). `(C) MATCHING REQUIREMENT- The Secretary shall pay to each eligible State in a fiscal year an amount, under a grant under subparagraph (A), equal to the Federal medical assistance percentage for such State for fiscal year 1995 (as defined in section 1905(b)) of so much of the expenditures by the State for child care in such year as exceed the State set-aside for such State under paragraph (1)(A) for such year and the amount of State expenditures in fiscal year 1994 or 1995 (whichever is greater) that equal the non-Federal share for the programs described in subparagraph (A) of paragraph (1). `(D) REDISTRIBUTION- `(i) IN GENERAL- With respect to any fiscal year, if the Secretary determines (in accordance with clause (ii)) that amounts under any grant awarded to a State under this paragraph for such fiscal year will not be used by such State during such fiscal year for carrying out the purpose for which the grant is made, the Secretary shall make such amounts available in the subsequent fiscal year for carrying out such purpose to one or more States which apply for such funds to the extent the Secretary determines that such States will be able to use such additional amounts for carrying out such purpose. Such available amounts shall be redistributed to a State pursuant to section 403(n) (as such section was in effect before October 1, 1995) by substituting `the number of children residing in all States applying for such funds' for `the number of children residing in the United States in the second preceding fiscal year'. `(ii) TIME OF DETERMINATION AND DISTRIBUTION- The determination of the Secretary under clause (i) for a fiscal year shall be made not later than the end of the first quarter of the subsequent fiscal year. The redistribution of amounts under clause (i) shall be made as close as practicable to the date on which such determination is made. Any amount made available to a State from an appropriation for a fiscal year in accordance with this subparagraph shall, for purposes of this part, be regarded as part of such State's payment (as determined under this subsection) for the fiscal year in which the redistribution is made. `(3) APPROPRIATION- For grants under this section, there are appropriated-- `(A) $1,967,000,000 for fiscal year 1997; `(B) $2,067,000,000 for fiscal year 1998; `(C) $2,167,000,000 for fiscal year 1999; `(D) $2,367,000,000 for fiscal year 2000; `(E) $2,567,000,000 for fiscal year 2001; and `(F) $2,717,000,000 for fiscal year 2002. `(4) INDIAN TRIBES- The Secretary shall reserve not less than 1 percent, and not more than 2 percent, of the aggregate amount appropriated to carry out this section in each fiscal year for payments to Indian tribes and tribal organizations. `(b) USE OF FUNDS- `(1) IN GENERAL- Amounts received by a State under this section shall only be used to provide child care assistance. Amounts received by a State under a grant under subsection (a)(1) shall be available for use by the State without fiscal year limitation. `(2) USE FOR CERTAIN POPULATIONS- A State shall ensure that not less than 70 percent of the total amount of funds received by the State in a fiscal year under this section are used to provide child care assistance to families who are receiving assistance under a State program under this part, families who are attempting through work activities to transition off of such assistance program, and families who are at risk of becoming dependent on such assistance program. `(c) APPLICATION OF CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT of 1990- Notwithstanding any other provision of law, amounts provided to a State under this section shall be transferred to the lead agency under the Child Care and Development Block Grant Act of 1990, integrated by the State into the programs established by the State under such Act, and be subject to requirements and limitations of such Act. `(d) DEFINITION- As used in this section, the term `State' means each of the 50 States or the District of Columbia.'. SEC. 604. LEAD AGENCY. Section 658D(b) (42 U.S.C. 9858b(b)) is amended-- (1) in paragraph (1)-- (A) in subparagraph (A), by striking `State' the first place that such appears and inserting `governmental or nongovernmental'; and (B) in subparagraph (C), by inserting `with sufficient time and Statewide distribution of the notice of such hearing,' after `hearing in the State'; and (2) in paragraph (2), by striking the second sentence. SEC. 605. APPLICATION AND PLAN. Section 658E (42 U.S.C. 9858c) is amended-- (1) in subsection (b)-- (A) by striking `implemented--' and all that follows through `(2)' and inserting `implemented'; and (B) by striking `for subsequent State plans'; (2) in subsection (c)-- (A) in paragraph (2)-- (i) in subparagraph (A)-- (I) in clause (i) by striking `, other than through assistance provided under paragraph (3)(C),'; and (II) by striking `except' and all that follows through `1992', and inserting `and provide a detailed description of the procedures the State will implement to carry out the requirements of this subparagraph'; (ii) in subparagraph (B)-- (I) by striking `Provide assurances' and inserting `Certify'; and (II) by inserting before the period at the end `and provide a detailed description of such procedures'; (iii) in subparagraph (C)-- (I) by striking `Provide assurances' and inserting `Certify'; and (II) by inserting before the period at the end `and provide a detailed description of how such record is maintained and is made available'; (iv) by amending subparagraph (D) to read as follows: `(D) CONSUMER EDUCATION INFORMATION- Certify that the State will collect and disseminate to parents of eligible children and the general public, consumer education information that will promote informed child care choices.'; (v) in subparagraph (E), to read as follows: `(E) COMPLIANCE WITH STATE LICENSING REQUIREMENTS- `(i) IN GENERAL- Certify that the State has in effect licensing requirements applicable to child care services provided within the State, and provide a detailed description of such requirements and of how such requirements are effectively enforced. Nothing in the preceding sentence shall be construed to require that licensing requirements be applied to specific types of providers of child care services. `(ii) INDIAN TRIBES AND TRIBAL ORGANIZATIONS- In lieu of any licensing and regulatory requirements applicable under State and local law, the Secretary, in consultation with Indian tribes and tribal organizations, shall develop minimum child care standards (that appropriately reflect tribal needs and available resources) that shall be applicable to Indian tribes and tribal organization receiving assistance under this subchapter.'; (vi) in subparagraph (F) by striking `Provide assurances' and inserting `Certify'; (vii) in subparagraph (G) by striking `Provide assurances' and inserting `Certify'; and (viii) by striking subparagraphs (H), (I), and (J) and inserting the following: `(H) MEETING THE NEEDS OF CERTAIN POPULATIONS- Demonstrate the manner in which the State will meet the specific child care needs of families who are receiving assistance under a State program under part A of title IV of the Social Security Act, families who are attempting through work activities to transition off of such assistance program, and families that are at risk of becoming dependent on such assistance program.'; (B) in paragraph (3)-- (i) in subparagraph (A), by striking `(B) and (C)' and inserting `(B) through (D)'; (ii) in subparagraph (B)-- (I) by striking `- Subject to the reservation contained in subparagraph (C), the' and inserting `AND RELATED ACTIVITIES- The'; (II) in clause (i) by striking `; and' at the end and inserting a period; (III) by striking `for--' and all that follows through `section 658E(c)(2)(A)' and inserting `for child care services on a sliding fee scale basis, activities that improve the quality or availability of such services, and any other activity that the State deems appropriate to realize any of the goals specified in paragraphs (2) through (5) of section 658A(b)'; and (IV) by striking clause (ii); (iii) by amending subparagraph (C) to read as follows: `(C) LIMITATION ON ADMINISTRATIVE COSTS- Not more than 5 percent of the aggregate amount of funds available to the State to carry out this subchapter by a State in each fiscal year may be expended for administrative costs incurred by such State to carry out all of its functions and duties under this subchapter. As used in the preceding sentence, the term `administrative costs' shall not include the costs of providing direct services.'; and (iv) by adding at the end thereof the following: `(D) ASSISTANCE FOR CERTAIN FAMILIES- A State shall ensure that a substantial portion of the amounts available (after the State has complied with the requirement of section 418(b)(2) of the Social Security Act with respect to each of the fiscal years 1997 through 2002) to the State to carry out activities under this subchapter in each fiscal year is used to provide assistance to low-income working families other than families described in paragraph (2)(H).'; and (C) in paragraph (4)(A)-- (i) by striking `provide assurances' and inserting `certify'; (ii) in the first sentence by inserting `and shall provide a summary of the facts relied on by the State to determine that such rates are sufficient to ensure such access' before the period; and (iii) by striking the last sentence. SEC. 606. LIMITATION ON STATE ALLOTMENTS. Section 658F(b)(1) (42 U.S.C. 9858d(b)(1)) is amended by striking `No' and inserting `Except as provided for in section 658O(c)(6), no'. SEC. 607. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE. Section 658G (42 U.S.C. 9858e) is amended to read as follows: `SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE. `A State that receives funds to carry out this subchapter for a fiscal year, shall use not less than 4 percent of the amount of such funds for activities that are designed to provide comprehensive consumer education to parents and the public, activities that increase parental choice, and activities designed to improve the quality and availability of child care (such as resource and referral services).'. SEC. 608. REPEAL OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOOL CARE REQUIREMENT. Section 658H (42 U.S.C. 9858f) is repealed. SEC. 609. ADMINISTRATION AND ENFORCEMENT. Section 658I(b) (42 U.S.C. 9858g(b)) is amended-- (1) in paragraph (1), by striking `, and shall have' and all that follows through `(2)'; and (2) in the matter following clause (ii) of paragraph (2)(A), by striking `finding and that' and all that follows through the period and inserting `finding and shall require that the State reimburse the Secretary for any funds that were improperly expended for purposes prohibited or not authorized by this subchapter, that the Secretary deduct from the administrative portion of the State allotment for the following fiscal year an amount that is less than or equal to any improperly expended funds, or a combination of such options.'. SEC. 610. PAYMENTS. Section 658J(c) (42 U.S.C. 9858h(c)) is amended-- (1) by striking `expended' and inserting `obligated'; and (2) by striking `3 fiscal years' and inserting `fiscal year'. SEC. 611. ANNUAL REPORT AND AUDITS. Section 658K (42 U.S.C. 9858i) is amended-- (1) in the section heading by striking `ANNUAL REPORT' and inserting `REPORTS'; (2) in subsection (a), to read as follows: `(a) REPORTS- `(1) COLLECTION OF INFORMATION BY STATES- `(A) IN GENERAL- A State that receives funds to carry out this subchapter shall collect the information described in subparagraph (B) on a monthly basis. `(B) REQUIRED INFORMATION- The information required under this subparagraph shall include, with respect to a family unit receiving assistance under this subchapter information concerning-- `(i) family income; `(ii) county of residence; `(iii) the gender, race, and age of children receiving such assistance; `(iv) whether the family includes only one parent; `(v) the sources of family income, including the amount obtained from (and separately identified)-- `(I) employment, including self-employment; `(II) cash or other assistance under part A of title IV of the Social Security Act; `(III) housing assistance; `(IV) assistance under the Food Stamp Act of 1977; and `(V) other assistance programs; `(vi) the number of months the family has received benefits; `(vii) the type of child care in which the child was enrolled (such as family child care, home care, or center-based child care); `(viii) whether the child care provider involved was a relative; `(ix) the cost of child care for such families; and `(x) the average hours per week of such care; during the period for which such information is required to be submitted. `(C) SUBMISSION TO SECRETARY- A State described in subparagraph (A) shall, on a quarterly basis, submit the information required to be collected under subparagraph (B) to the Secretary. `(D) SAMPLING- The Secretary may disapprove the information collected by a State under this paragraph if the State uses sampling methods to collect such information. `(2) BIANNUAL REPORTS- Not later than December 31, 1997, and every 6 months thereafter, a State described in paragraph (1)(A) shall prepare and submit to the Secretary a report that includes aggregate data concerning-- `(A) the number of child care providers that received funding under this subchapter as separately identified based on the types of providers listed in section 658P(5); `(B) the monthly cost of child care services, and the portion of such cost that is paid for with assistance provided under this subchapter, listed by the type of child care services provided; `(C) the number of payments made by the State through vouchers, contracts, cash, and disregards under public benefit programs, listed by the type of child care services provided; `(D) the manner in which consumer education information was provided to parents and the number of parents to whom such information was provided; and `(E) the total number (without duplication) of children and families served under this subchapter; during the period for which such report is required to be sub-mitted.'; and (2) in subsection (b)-- (A) in paragraph (1) by striking `a application' and inserting `an application'; (B) in paragraph (2) by striking `any agency administering activities that receive' and inserting `the State that receives'; and (C) in paragraph (4) by striking `entitles' and inserting `entitled'. SEC. 612. REPORT BY THE SECRETARY. Section 658L (42 U.S.C. 9858j) is amended-- (1) by striking `1993' and inserting `1997'; (2) by striking `annually' and inserting `biennially'; and (3) by striking `Education and Labor' and inserting `Economic and Educational Opportunities'. SEC. 613. ALLOTMENTS. Section 658O (42 U.S.C. 9858m) is amended-- (1) in subsection (a)-- (A) in paragraph (1)-- (i) by striking `POSSESSIONS' and inserting `POSSESSIONS'; (ii) by inserting `and' after `States,'; and (iii) by striking `, and the Trust Territory of the Pacific Islands'; and (B) in paragraph (2), by striking `more than 3 percent' and inserting `less than 1 percent, and not more than 2 percent,'; (2) in subsection (c)-- (A) in paragraph (5) by striking `our' and inserting `out'; and (B) by adding at the end thereof the following new paragraph: `(6) CONSTRUCTION OR RENOVATION OF FACILITIES- `(A) REQUEST FOR USE OF FUNDS- An Indian tribe or tribal organization may submit to the Secretary a request to use amounts provided under this subsection for construction or renovation purposes. `(B) DETERMINATION- With respect to a request submitted under subparagraph (A), and except as provided in subparagraph (C), upon a determination by the Secretary that adequate facilities are not otherwise available to an Indian tribe or tribal organization to enable such tribe or organization to carry out child care programs in accordance with this subchapter, and that the lack of such facilities will inhibit the operation of such programs in the future, the Secretary may permit the tribe or organization to use assistance provided under this subsection to make payments for the construction or renovation of facilities that will be used to carry out such programs. `(C) LIMITATION- The Secretary may not permit an Indian tribe or tribal organization to use amounts provided under this subsection for construction or renovation if such use will result in a decrease in the level of child care services provided by the tribe or organization as compared to the level of such services provided by the tribe or organization in the fiscal year preceding the year for which the determination under subparagraph (A) is being made. `(D) UNIFORM PROCEDURES- The Secretary shall develop and implement uniform procedures for the solicitation and consideration of requests under this paragraph.'; and (3) in subsection (e), by adding at the end thereof the following new paragraph: `(4) INDIAN TRIBES OR TRIBAL ORGANIZATIONS- Any portion of a grant or contract made to an Indian tribe or tribal organization under subsection (c) that the Secretary determines is not being used in a manner consistent with the provision of this subchapter in the period for which the grant or contract is made available, shall be allotted by the Secretary to other tribes or organizations that have submitted applications under subsection (c) in accordance with their respective needs.'. SEC. 614. DEFINITIONS. Section 658P (42 U.S.C. 9858n) is amended-- (1) in paragraph (2), in the first sentence by inserting `or as a deposit for child care services if such a deposit is required of other children being cared for by the provider' after `child care services'; and (2) by striking paragraph (3); (3) in paragraph (4)(B), by striking `75 percent' and inserting `85 percent'; (4) in paragraph (5)(B)-- (A) by inserting `great grandchild, sibling (if such provider lives in a separate residence),' after `grandchild,'; (B) by striking `is registered and'; and (C) by striking `State' and inserting `applicable'. (5) by striking paragraph (10); (6) in paragraph (13)-- (A) by inserting `or' after `Samoa,'; and (B) by striking `, and the Trust Territory of the Pacific Islands'; (7) in paragraph (14)-- (A) by striking `The term' and inserting the following: `(A) IN GENERAL- The term'; and (B) by adding at the end thereof the following new subparagraph: `(B) OTHER ORGANIZATIONS- Such term includes a Native Hawaiian Organization, as defined in section 4009(4) of the Augustus F. Hawkins-Robert T. Stafford Elementary and Secondary School Improvement Amendments of 1988 (20 U.S.C. 4909(4)) and a private nonprofit organization established for the purpose of serving youth who are Indians or Native Hawaiians.'. SEC. 615. EFFECTIVE DATE. (a) IN GENERAL- Except as provided in subsection (b), this title and the amendments made by this title shall take effect on October 1, 1996. (b) EXCEPTION- The amendment made by section 603(a) shall take effect on the date of enactment of this Act.